Information and Knowledge Management using ArcGIS ModelBuilder
Information and Knowledge Management using ArcGIS ModelBuilder
Information and Knowledge Management using ArcGIS ModelBuilder
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Proceedings<br />
of the<br />
5th European Conference<br />
on <strong>Information</strong><br />
<strong>Management</strong> <strong>and</strong><br />
Evaluation<br />
Università dell'Insubria<br />
Como<br />
Italy<br />
8-9 September 2011<br />
Walter Castelnovo <strong>and</strong> Elena Ferrari,<br />
Centre for <strong>Knowledge</strong> <strong>and</strong> Services <strong>Management</strong><br />
University of Insubria, Varese/Como, Italy
Copyright The Authors, 2010. All Rights Reserved.<br />
No reproduction, copy or transmission may be made without written permission from the individual authors.<br />
Papers have been double-blind peer reviewed before final submission to the conference. Initially, paper<br />
abstracts were read <strong>and</strong> selected by the conference panel for submission as possible papers for the<br />
conference.<br />
Many thanks to the reviewers who helped ensure the quality of the full papers.<br />
These Conference Proceeding have been submitted to the Thomson ISI for indexing.<br />
Further copies of this book can be purchased from http://academic-conferences.org/2-proceedings.htm<br />
ISBN: 978-1-908272-12-6 Book<br />
Published by Academic Publishing Limited<br />
Reading<br />
UK<br />
44-118-972-4148<br />
www.academic-publishing.org
Contents<br />
Paper Title Author(s) Page<br />
No.<br />
Preface v<br />
Biographies of Conference Chairs, Programme Chair,<br />
Keynote Speaker <strong>and</strong> Mini-track Chairs<br />
Biographies of contributing authors viii<br />
<strong>Information</strong> <strong>and</strong> <strong>Knowledge</strong> <strong>Management</strong> Using<br />
<strong>ArcGIS</strong> <strong>ModelBuilder</strong><br />
System Integration Model Based on Open Source<br />
Software (Oss)<br />
Building Virtual Communities on top of Online Social<br />
Networks<br />
Benchmarking <strong>Information</strong> <strong>Management</strong> Practice <strong>and</strong><br />
Competence in Swedish Organizations<br />
Developing a Model for Assessing IT Competency of<br />
Managers<br />
Investigating the Relationship of Managers’ IT<br />
Competency <strong>and</strong> IT Projects’ Risks<br />
Evaluation of ICT Investment in Healthcare: Insights<br />
<strong>and</strong> Agenda for Future Research<br />
The Uses of Business Outcomes for IT Benefit<br />
Identification at the Ex-Ante Justification Stage<br />
Data Governance in Practice: The SME Qu<strong>and</strong>ary<br />
Reflections on the Reality of Data Governance in the<br />
Small to Medium Enterprise (SME) Sector<br />
Towards a Framework for the Evaluation of Mobile<br />
Payments Integration<br />
Social Computing Tools for Inter-Organizational Risk<br />
<strong>Management</strong><br />
Embedding Human Values Into <strong>Information</strong> System<br />
Engineering Methodologies<br />
Evaluating the Role <strong>and</strong> Potential of Internet Banking:<br />
The Creditis Experience<br />
João Agrela, Leonor Esteves, Jorge<br />
Ferreira <strong>and</strong> Óscar Antunes<br />
Kamsuriah Ahmad 1 , Azwan<br />
Mohamed 1 <strong>and</strong> Reduan Samad<br />
Cuneyt Gurcan Akcora, Barbara<br />
Carminati <strong>and</strong> Elena Ferrari<br />
Karen Anderson, Göran<br />
Samuelsson<strong>and</strong> Marie Morner<br />
Jansson<br />
Mohammad Abooyee Ardakan,<br />
Hamed Majidi Zolbanin <strong>and</strong> Ali<br />
Khaleghi<br />
Mohammad Abooyee Ardakan, Babak<br />
Sohrabi <strong>and</strong> Vahid Saadat<br />
Arviansyah, Egon Berghout <strong>and</strong><br />
Chee-Wee Tan<br />
vi<br />
1<br />
13<br />
19<br />
28<br />
37<br />
43<br />
53<br />
Dawit Asmelash 65<br />
Carolyn Begg <strong>and</strong> Tom Caira 75<br />
Fergal Carton et al 84<br />
Walter Castelnovo 92<br />
Sunil Choenni, Peter van Waart<strong>and</strong><br />
Geert de Haan<br />
101<br />
Renata Paola Dameri 109<br />
ICT <strong>and</strong> PA: A Marriage Made in Heaven? Maria Concetta De Vivo, Alberto<br />
Polzonetti <strong>and</strong> Pietro Tapanelli<br />
SMEs <strong>and</strong> IT: A Market for Lemons? Jan Devos, Hendrik Van L<strong>and</strong>eghem<br />
<strong>and</strong> Dirk Deschoolmeester<br />
Authenticity of Digital Records: An Archival<br />
Diplomatics Framework for Digital Forensics<br />
A Reflective Framework for Successful IS<br />
Implementation in Healthcare: Applying Theories<br />
From IS Innovation <strong>and</strong> Implementation Research<br />
The Effectiveness of EBSE in Modifying Professional<br />
Practice – an Experimental Protocol <strong>and</strong> Study<br />
i<br />
119<br />
126<br />
Luciana Duranti <strong>and</strong> Adam Jansen 134<br />
Kate Dymoke-Bradshaw <strong>and</strong> Ann<br />
Brown<br />
140<br />
Graham Fletcher <strong>and</strong> Marie Cahillane 148
Paper Title Author(s) Page<br />
No.<br />
How Open Source Software Products: Can Support<br />
Teaching in Italian Schools<br />
Chiara Friso, Valentina Lenarduzzi,<br />
Davide Taibi <strong>and</strong> Davide Tosi<br />
Cyber University - a Future for Online Education Yuwanuch Gulatee <strong>and</strong> Barbara<br />
Combes<br />
Managing Costs <strong>and</strong> Performance of <strong>Information</strong><br />
Technology in a Group Context – Current Challenges<br />
for Multinational Enterprises<br />
157<br />
166<br />
Florian Hamel et al 174<br />
Distributed Working Pictures Martin Hill, John Salt <strong>and</strong> Graham<br />
Fletcher<br />
Transforming <strong>Information</strong> to <strong>Knowledge</strong> is the Current<br />
Platform for a Successful Political Campaign<br />
Theoretical Discussion: Green IT <strong>and</strong> its Development<br />
in South Africa<br />
182<br />
Vered Holzmann <strong>and</strong> Ben Holzmann 189<br />
Grant Howard <strong>and</strong> Sam Lubbe 196<br />
Evaluating ICT Based Services for Older Users Minna Isomursu <strong>and</strong> Marja Harjumaa 205<br />
The Geography of Criminality - <strong>Information</strong> <strong>and</strong> GIS<br />
Models for Decision Support<br />
Mobile Virtual Network Operator <strong>Information</strong> Systems<br />
for Increased Sustainability in Utilities<br />
<strong>Management</strong> of <strong>Information</strong> Systems Outsourcing:<br />
Evaluation of Lessons Learned From a Boundary<br />
Spanning Perspective<br />
A Fair Partnership Model by Sharing the Benefit of<br />
<strong>Knowledge</strong> Creation<br />
Measuring the Effectiveness of National <strong>Knowledge</strong><br />
Based Economy<br />
Empirical Study on IT Productivity in eGovernment in<br />
Korea<br />
Impact of Inter Organizational Networks on Adoption<br />
Process of <strong>Information</strong> Technology<br />
Portfolio <strong>Management</strong> in Non-Profit Organizations:<br />
The Case of Groningen’s Municipality<br />
Paulo João, Jorge Ferreira <strong>and</strong> José<br />
Martins<br />
Hallur Leivsgarð Joensen <strong>and</strong> Torben<br />
Tambo<br />
213<br />
225<br />
Björn Johansson <strong>and</strong> Linda Bergkvist 234<br />
Ghassan Kbar 243<br />
Ghassan Kbar <strong>and</strong> Abdul Aziz<br />
AlDusari<br />
250<br />
Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim 258<br />
Erdem Kirkbesoglu <strong>and</strong> Gizem<br />
Ogutcu<br />
264<br />
Bert Kleersnijder <strong>and</strong> Egon Berghout 271<br />
Why is an IS Project Late? – A Case Study Juha Kontio 279<br />
Research on Performance Review Model for National<br />
Database Project<br />
Multi-Scope Evaluation of Public Administration<br />
Initiatives in Process Automation<br />
eBusiness Model Design <strong>and</strong> Evaluation: The Pieces<br />
Make the Puzzle<br />
Using Goal Modelling to Evaluate Goals for eService<br />
Development in Government<br />
Alignment in Enterprise Architecture: Investigating the<br />
Aspects of Alignment in Architectural Approaches<br />
eCitizen Satisfaction: The Case of eGovernment<br />
Websites<br />
Underst<strong>and</strong>ing the Impact of <strong>Knowledge</strong> Sharing in<br />
Organisations: A Case Study<br />
ii<br />
Misoo Kwon 288<br />
Luigi Lavazza 294<br />
Monika Magnusson 303<br />
Monika Magnusson <strong>and</strong> Marie-<br />
Therese Christiansson<br />
Thanos Magoulas, Aida Hadzic, Ted<br />
Saarikko <strong>and</strong> Kalevi Pessi<br />
312<br />
321<br />
Panagiotis Manolitzas et al 332<br />
Magdeline Mashilo <strong>and</strong> Tiko Iyamu 341
Paper Title Author(s) Page<br />
No.<br />
Contextual Inquiry into Business Requirements<br />
Elicitation of Indigenous Enterprise: A Case of the<br />
Malaysian Batik Microenterprise<br />
HOT-fit Evaluation Framework: Validation Using Case<br />
Studies <strong>and</strong> Qualitative Systematic Review in Health<br />
<strong>Information</strong> Systems Evaluation Adoption<br />
Remembering <strong>and</strong> Recalling: The ERP System as an<br />
Organizational Memory<br />
Environmental Scanning Practice of Enterprise 50:<br />
Small Medium Enterprise (E50 SMEs) in Malaysia<br />
Underst<strong>and</strong>ing Financial <strong>and</strong> non-Financial<br />
<strong>Information</strong> to Assess Listed Johannesburg Stock<br />
Exchange (JSE) Companies’ Performances<br />
Designing a Model for Evaluating the <strong>Information</strong><br />
Technology Level in Organizations by Fuzzy TOPSIS<br />
Nor Laila Md Noor <strong>and</strong> Ariza Nordin 350<br />
Maryati Mohd Yusof 359<br />
Gunilla Myreteg 366<br />
Roslina Othman <strong>and</strong> Siti Rohimi<br />
Hamedon<br />
Elmarie Papageorgiou <strong>and</strong> Herman<br />
de Bruyn<br />
Shabnam Pas<strong>and</strong>ide, Abbas Toloie<br />
Eshlaghi, <strong>and</strong> Reza Radfar<br />
Can eGovernment Systems Bridge the Digital Divide? Elias Pimenidis, Lazaros Iliadis, <strong>and</strong><br />
Christos Georgiadis<br />
Contributions to the Measurement <strong>and</strong> <strong>Management</strong><br />
of Intellectual Capital – an Accounting Perspective<br />
Executive <strong>Information</strong> Systems (EIS) Implementation<br />
for Education <strong>Management</strong> – a Conceptual<br />
Framework<br />
Rui Alex<strong>and</strong>re Pires <strong>and</strong> Maria do Céu<br />
Gaspar Alves<br />
Rozilawati Razali <strong>and</strong> Mahamsiatus<br />
Kamaruddin<br />
The ISD Process as a Live Routine David Sammon, Tadhg Nagle <strong>and</strong><br />
John McAvoy<br />
Using Geographic <strong>Information</strong> to Assess Urban<br />
Environmental Indicators in the City of Lisbon<br />
Reflections on the Role of the Lecturer as Teacher,<br />
Researcher <strong>and</strong> Mentor in a Project-Based Approach<br />
for IS/IT Majors at Three Different Academic<br />
Institutions<br />
Teresa Santos, Ségio Freire <strong>and</strong> José<br />
António Tenedório<br />
Elsje Scott, Peter Weimann <strong>and</strong> Nata<br />
van der Merwe<br />
Enterprise <strong>Information</strong> Systems of new Generation Elena Serova 452<br />
Post-ERP Feral System Taxonomy: A Manifestation<br />
From Multiple Case Studies<br />
Open Source Disease Control Software Development:<br />
The Role of Patients<br />
Value of <strong>Knowledge</strong> <strong>Management</strong> Systems: A Review<br />
Paper<br />
Sharina Tajul Urus, Alemayehu Molla<br />
<strong>and</strong> Say Yen Teoh<br />
Accountability <strong>and</strong> the Reconstruction of the Past Geert-Jan van Bussel<br />
HvA Amsterdam<br />
The Question of Selecting Appropriate Methodics of<br />
an ERP System Implementation in Life&Science<br />
Enterprises as an Important Factor of a Project’s<br />
Success Based on the Example of Polish Experiences<br />
373<br />
383<br />
394<br />
403<br />
411<br />
420<br />
428<br />
436<br />
443<br />
458<br />
Jose Teixeira <strong>and</strong> Reima Suomi 467<br />
Nelly Todorova 475<br />
483<br />
Bartosz Wachnik 491<br />
PhD Research Papers 501<br />
<strong>Information</strong> Systems for Production Planning <strong>and</strong><br />
Scheduling <strong>and</strong> Their Impact on Business<br />
Performance<br />
iii<br />
Denisa Ferenčíková 503
Paper Title Author(s) Page<br />
No.<br />
An Evaluation of web Services Proxies Solutions Antonio Hidalgo L<strong>and</strong>a, Ian Owens<br />
<strong>and</strong> Graham Fletcher<br />
Enhancing the Success of Electronic Schools in the<br />
Kenyan Context<br />
The Specification of Competency Questions: An<br />
Ontological Support to Match Business Processes, IT<br />
<strong>and</strong> Competences of Professionals<br />
The Balanced Scorecard <strong>and</strong> its Practical Applications<br />
in Oracle Balanced Scorecard<br />
Challenges in Business Case Development <strong>and</strong><br />
Requirements for Business Case Frameworks<br />
The Relation Between Dynamic Business Models <strong>and</strong><br />
Business Cases<br />
Evaluation of Error <strong>Management</strong> in Health <strong>Information</strong><br />
Systems: A Review<br />
Hesbon Nyagowa, Dennis Ocholla<br />
<strong>and</strong> Stephen Mutula<br />
510<br />
520<br />
Yadary Ortega-González et al 531<br />
Michal Pivnička 540<br />
Bart-Jan van Putten, Franziska<br />
Brecht, <strong>and</strong> Oliver Günther<br />
Bart-Jan van Putten<strong>and</strong> Markus<br />
Schief<br />
Mohamad Norzamani Sahroni <strong>and</strong><br />
Maryati Mohd Yusof<br />
Non Academics papers 577<br />
<strong>Management</strong> of Waiting List for Surgery <strong>Information</strong><br />
System<br />
553<br />
562<br />
570<br />
Rita Cristóvão <strong>and</strong> Pedro Gomes 579<br />
Work in Progress papers with Posters 593<br />
<strong>Information</strong> <strong>Management</strong> Enabling Collaborative oak<br />
Tree Population Care: How to Define <strong>and</strong> Initiate a<br />
Change <strong>Management</strong> Process in a Local Community<br />
in Sweden<br />
Motivations in Virtual Communities: A Literature<br />
Review<br />
An Enterprise Ontology Approach for Defining<br />
Enterprise <strong>Information</strong> Architecture<br />
Review of Lean Method Application for Improvement<br />
in Health <strong>Information</strong> Systems<br />
National Ict Strategy <strong>and</strong> its Implementation In<br />
Building <strong>Information</strong> Society in Albania<br />
A Bottom-Up Approach for the Representation <strong>and</strong><br />
Continuous Update of Technology Architectures<br />
iv<br />
Maria Bergenstjerna 595<br />
Giovanni Camponovo 598<br />
Bernardo Gomes, André Vasconcelos<br />
<strong>and</strong> Pedro Sousa<br />
Soudabeh Khodambashi <strong>and</strong> Maryati<br />
Mohd Yusof<br />
Ermelinda Kordha <strong>and</strong> As. Kozeta<br />
Sevrani<br />
João Soares, José Tribolet <strong>and</strong> André<br />
Vasconcelos<br />
609<br />
616<br />
619<br />
622
Preface<br />
The 5th European Conference on <strong>Information</strong> <strong>Management</strong> <strong>and</strong> Evaluation (ECIME) is hosted this year by<br />
Dipartimento di Informatica e Comunicazione, Università dell'Insubria, Como, Italy. The Conference Chair is<br />
Professor Walter Castelnovo from the University of Insubria <strong>and</strong> the Programme Chair is Professor Elena<br />
Ferrari also from the University of Insubria.<br />
ECIME aims to bring together individuals researching <strong>and</strong> working in the broad field of information<br />
management, including information technology evaluation. We hope that this year’s conference will provide<br />
you with plenty of opportunities to share your expertise with colleagues from around the world.<br />
This year’s opening keynote address will be delivered by Dr. Linamara Rizzo Battistella, from São Paulo<br />
State Secretary for the Rights of the Person with Disability, Brazil on the topic of “ICT for Social Inclusion <strong>and</strong><br />
Equal Opportunities”, <strong>and</strong> on the second day we have Alberto Sanna, from e-Services for Life & Health<br />
Director, Scientific Institute San Raffaele, Milano, Italy, talking about “Smart ICT’s for Wellbeing:<br />
Personalised e-Services for Life <strong>and</strong> Health”.<br />
ECIME 2011 received an initial submission of 164 abstracts. After the double-blind peer review process 74<br />
papers have been accepted for these Conference Proceedings. These papers represent research from<br />
around the world, including Australia, Albania, Belgium, Canada, Cuba, Czech Republic, Denmark, Finl<strong>and</strong>,<br />
Germany, Greece, Iran, Irel<strong>and</strong>, Israel, Italy, Kenya, Malaysia, New Zeal<strong>and</strong>, Pol<strong>and</strong>, Portugal, Republic of<br />
Korea, Russia, Saudi Arabia, South Africa, South Korea,Sweden, Switzerl<strong>and</strong>, Thail<strong>and</strong>, The Netherl<strong>and</strong>s,<br />
Turkey,<strong>and</strong> the United Kingdom.<br />
We wish you a most interesting conference.<br />
Professor Elena Ferrari,<br />
University of Insubria, Como, Italy<br />
Programme Chair<br />
September 2011<br />
v
Biographies of Conference Chairs, Programme Chairs <strong>and</strong><br />
Keynote Speakers<br />
Conference Chairs<br />
Programme Chairs<br />
Professor Walter Castelnovo is Assistant Professor of <strong>Information</strong> Systems <strong>and</strong><br />
Organisation at the University of Insubria (Italy). His research interests concern<br />
technological <strong>and</strong> organizational innovation in Public Administration <strong>and</strong><br />
Interorganisational <strong>Information</strong> Systems. He is a member of the Department of<br />
Institutional Reforms, E-Government <strong>and</strong> Institutional Federalism of the Association of<br />
the Municipalities of Lombardia (Italy).<br />
Professor Elena Ferrari is professor of Computer Science at the University of<br />
Insubria. Her research activities are related to various aspects of data<br />
management systems, including web security, access control <strong>and</strong> privacy,<br />
multimedia databases, <strong>and</strong> temporal databases. On these topics she has<br />
published more than a hundred scientific publications in international journals <strong>and</strong><br />
conference proceedings. She has served as Programme Chair <strong>and</strong> Programme<br />
Committee member of several international conferences She is in the Editorial<br />
Board of the VLDB Journal <strong>and</strong> the International Journal of <strong>Information</strong><br />
Technology (IJIT), is a member of the ACM <strong>and</strong> a senior member of IEEE.<br />
Keynote Speakers<br />
Dr. Linamara Rizzo Battistella is currently State Secretary for the Rights of the<br />
Person with Disability in the São Paulo State Government, Brazil. She is also (until<br />
2012) the Honorary President of the International Society of the Physical <strong>and</strong><br />
Rehabilitation Medicine (ISPRM) <strong>and</strong> Professor at the Medicine School of the<br />
University of São Paulo. From 2008-2010 she was a member of the Board of<br />
Governors of Brazilian Association of Physical Medicine <strong>and</strong> Rehabilitation (ABMFR).<br />
Linamara has 149 articles published in periodicals, 8 published or organised books<br />
<strong>and</strong> 42 published book chapters to her credit..<br />
Alberto Sanna graduated in Nuclear Engineering at Politecnico di Milano. He has<br />
been involved in healthcare process re-engineering projects in the Scientific Institute<br />
San Raffaele since 1989, being in charge of several automation projects, designing<br />
<strong>and</strong> realizing robotic work cells for Patient- <strong>and</strong> Operator-safety critical processes.<br />
Since 2002 he is director of the e-Services for Life <strong>and</strong> Health Unit .He has presented<br />
his research activities in more than 90 international congresses, <strong>and</strong> conducts<br />
interdisciplinary teaching activities in <strong>Information</strong> Technology <strong>and</strong> Italian Design<br />
Courses <strong>and</strong> Masters. He is an author of edutainment videogames <strong>and</strong> inventor of<br />
patents & trademarks in the field of innovative technologies for health.<br />
Mini Track Chairs<br />
Dr Erik Borglund has a PhD in computer <strong>and</strong> system science <strong>and</strong> is one of four<br />
senior researchers at the archival <strong>and</strong> information managagement school of Mid<br />
Sweden University. Erik is a senior lecturer in archival science <strong>and</strong> information science<br />
at Mid Sweden University, <strong>and</strong> his main research interests are digital recordkeeping,<br />
archival systems, document management, information systems in crisis management,<br />
information systems design <strong>and</strong> Computer Supported Cooperative Work.<br />
vi
Dr Jorge Ricardo da Costa Ferreira is an assistant professor at the Geography <strong>and</strong><br />
Regional Planning Department, Faculty of Social Sciences <strong>and</strong> Humanities (FCSH).<br />
His PhD in Geography <strong>and</strong> Regional Planning - New Technologies in Geography -<br />
deals with "The Geography of <strong>Information</strong> Society in Portugal" <strong>and</strong> presents a new<br />
approach to the diffusion of information <strong>and</strong> creation of knowledge for territorial<br />
management. He develops its research activities in e-Geo, Centro de Estudos de<br />
Geografia e Planeamento Regional, a R&D unit with Government annual funding within<br />
the University. His main research interests focus on "Geography of <strong>Knowledge</strong><br />
Society" <strong>and</strong> “Geographical <strong>Information</strong> Technologies". He is the author of several publications including<br />
chapters in books <strong>and</strong> articles <strong>and</strong> he has published in several national <strong>and</strong> international conference<br />
proceedings. Jorge Ferreira also regularly advises graduate students (Masters <strong>and</strong> PhD) at FCSH.<br />
Dr Luigi Lavazza is associate professor at the Università degli Studi dell'Insubria in<br />
Varese, Italy. His research interests include: empirical software engineering, model<br />
based development of real-time software, <strong>and</strong> requirements engineering. He is<br />
coauthor of over 100 scientific papers. With Dr S<strong>and</strong>ro Morasca, he is leading the<br />
activity concerning trustworthiness of Open Source Software in the EU QualiPSo<br />
project.<br />
Dr S<strong>and</strong>ro Morasca is Professor of Computer Science at the Università degli Studi<br />
dell'Insubria. His research interests include Empirical Software Engineering,<br />
Specification of Concurrent <strong>and</strong> Real-time Software Systems, Software Verification,<br />
<strong>and</strong> Open Source Software. He has published about 90 scientific papers on these<br />
topics. With Dr Luigi Lavazza, he is leading the activity concerning the trustworthiness<br />
of Open Source Software in the EU QualiPSo project.<br />
Danilo Piaggesi is Managing Director of the Fondazione Rosselli Americas (FRA) <strong>and</strong> a<br />
member of Fondazione Rosselli’s Board. FRA focuses on <strong>Knowledge</strong> Society, ICT <strong>and</strong><br />
innovation for development. One of the major programs of FRA is the IKEP<br />
(International <strong>Knowledge</strong> Economy Program) working with multi <strong>and</strong> bi-lateral<br />
cooperation to support development projects where ICT, innovation <strong>and</strong> the principles of<br />
the <strong>Knowledge</strong> Economy can be instrumental for achieving socio-economic growth. Mr.<br />
Piaggesi holds a Master‘s degree in Physics with a diploma in geophysics, cum laude,<br />
from the University of Rome <strong>and</strong> an Executive International Business Certificate from<br />
Georgetown University/John Cabot University, in Washington D.C <strong>and</strong><br />
in Rome<br />
Dr Elena Serova is a senior lecturer <strong>and</strong> Deputy Head of <strong>Information</strong> Technologies at<br />
the Graduate School of <strong>Management</strong> of St Petersburg State University, Russia. Her<br />
research interests include <strong>Information</strong> – the technological resources of Russian<br />
Economy; Managing <strong>and</strong> Using <strong>Information</strong> System. A Strategic Approach; Enterprise<br />
<strong>Information</strong> Systems. Marketing <strong>Information</strong> Systems; CRM; Business Process<br />
<strong>Management</strong>; <strong>Information</strong> <strong>Management</strong> <strong>and</strong> Computer modeling for Business<br />
Solutions. She has co-authored a book <strong>and</strong> contributed chapters to several books <strong>and</strong><br />
collections of essays.<br />
vii
Biographies of contributing authors (in alphabetical order)<br />
Mohammad Abooyee Ardakan is an assistant professor at Faculty of <strong>Management</strong>, University of Tehran.<br />
His major interests are strategic management <strong>and</strong> IT planning. He has instructed different courses on<br />
strategic planning, strategic management, business research methods, IS design <strong>and</strong> evaluation. He is also<br />
a consultant to several high rank Iranian companies in the field of strategic management.<br />
Joao Agrela is enrolled in the Master’s Degree in L<strong>and</strong> <strong>Management</strong> at the Department of Geography <strong>and</strong><br />
Regional Planning, Universidade Nova de Lisboa. He is also a Collaborator at the e-GEO Research Centre<br />
for Geography <strong>and</strong> Regional Planning, researching in the area of Territory, Environment <strong>and</strong> Development,<br />
<strong>and</strong> is a GIS professional at Municipia, Cartography <strong>and</strong> <strong>Information</strong> Systems<br />
Kamsuriah Ahmad is a Senior Lecturer at the Faculty of <strong>Information</strong> Science <strong>and</strong> Technology at the<br />
Universiti Kebangsaan Malaysia (UKM). Her current research interests are database management systems<br />
<strong>and</strong> intelligent systems. Dr. Kamsuriah received her doctorate in Database <strong>Management</strong> System from the<br />
Universiti Putra Malaysia in 2009. Currently, she is the Head Of Strategic <strong>Information</strong> System Research<br />
Group.<br />
Cuneyt Gurcan Akcora is a PhD student at the University of Insubria, Italy. His research is focused on<br />
privacy <strong>and</strong> security issues in social networks with a focus on graph mining <strong>and</strong> machine learning<br />
techniques. In the past he worked on sentiment analysis in micro blog posts.<br />
Abdulaziz Aldusari is the Chief Executive Officer of Riyadhi Techno Valoley, Sudi Arabia. He has a BS in<br />
Architecture from King Saud University, Riyadh, an MS in Urban <strong>and</strong> Regional Planning <strong>and</strong> a PhD in Urban<br />
<strong>and</strong> Regional Planning from the University of Florida. His research interests include affordable <strong>and</strong> social<br />
ho<strong>using</strong>, technology transfer, <strong>and</strong> achieving a knowledge-based economy.<br />
Maria do Céu Alves is an Assistant Professor of Accounting in the Business <strong>and</strong> Economics Department,<br />
University of Beira Interior, Portugal. She holds a PhD in <strong>Management</strong> from University of Beira Interior. Her<br />
research interests include accounting information systems; ERP systems <strong>and</strong> new costing systems;<br />
entrepreneurship <strong>and</strong> performance measurement; management accounting roles <strong>and</strong> decision making.<br />
Karen Anderson is Professor of Archives <strong>and</strong> <strong>Information</strong> Science at Mid Sweden University, Professor II at<br />
Oslo University College <strong>and</strong> Adjunct Professor at Edith Cowan University in Western Australia. Research<br />
interests include digital recordkeeping systems <strong>and</strong> the education <strong>and</strong> professional development needs of<br />
the recordkeeping community. She is an Editor-in-Chief for Archival Science.<br />
Óscar Emanuel Duarte Antunes is a research collaborator of e-Geo, Research Center for Geography <strong>and</strong><br />
regional Planning, Faculty of Social Sciences <strong>and</strong> Humanities (FCSH), Universidade Nova de Lisboa. He<br />
graduated in Geography <strong>and</strong> Regional Planning – Remote Sensing <strong>and</strong> Geographic <strong>Information</strong> Systems<br />
(GIS) <strong>and</strong> is currently studying for a Master’s degree in the same research area.<br />
A Arviansyah is a PhD student at the University of Groningen. He gained his masters degree in Business<br />
<strong>and</strong> ICT from the same university. Before embarking on his PhD, he was a junior researcher <strong>and</strong> lecturer at<br />
the University of Indonesia. He is currenly undertaking research in the area of risk evaluation of ICT<br />
investment.<br />
Dawit Asmelash is doing his PhD in Informatics at University of Pretoria, South Africa <strong>and</strong> he lectures in<br />
information systems at the same university. His research studies have involved IT governance, IS/IT<br />
investments, IS/IT benefits evaluation <strong>and</strong> ICT for development.<br />
Carolyn Begg has taught in the School of Computing at the University of the West of Scotl<strong>and</strong> in the UK for<br />
more than 20 years. She is the co-author of a popular database systems textbook that sells worldwide. Her<br />
research interests are in the areas of data management <strong>and</strong> business intelligence.<br />
Maria Bergenstjerna is a PhD c<strong>and</strong>idate <strong>and</strong> part of the IT management research group, Department of<br />
Applied IT, Gothenburg University, Sweden. Her research interest is in the field of informatics: the<br />
management of coordinated development of business, information systems <strong>and</strong> knowledge. As a lecturer,<br />
she has engaged in the IT management courses for several years.<br />
Ann Brown is a Senior Lecturer in <strong>Information</strong> <strong>Management</strong> in the Faculty of <strong>Management</strong> at Cass Business<br />
School <strong>and</strong> Associate Dean for the Undergraduate programme. She took an MSc (Operational Research) at<br />
viii
LSE while working at the British Steel Corporation as an Operational Researcher. She obtained her<br />
doctorate from City University in 2005, based on her work into the problems <strong>and</strong> potential of <strong>Information</strong><br />
Systems applications to create Business Value for organisations.<br />
Geert-Jan van Bussel is a certified archivist <strong>and</strong> has a PhD in information <strong>and</strong> archival studies. He is a<br />
senior lecturer <strong>and</strong> researcher at the HvA / Amsterdam University of Applied Sciences <strong>and</strong> Assistant<br />
Professor at the University of Amsterdam. He is the director of an international consultancy on strategic<br />
information <strong>and</strong> records management <strong>and</strong> records auditing.<br />
Giovanni Camponovo is lecturer at the Department of Business <strong>and</strong> Social Sciences of the University of<br />
Applied Sciences of Southern Switzerl<strong>and</strong> (SUPSI). He received a PhD in Business <strong>Information</strong> Systems<br />
from the Faculty of Business <strong>and</strong> Economics of the University of Lausanne. His current research focuses on<br />
innovative business models, information systems, adoption <strong>and</strong> usage.<br />
Giacomo Carli is a PhD c<strong>and</strong>idate in <strong>Management</strong> at the University of Bologna where he received a<br />
Master’s degree in engineering management. He had worked for two consulting companies as organizational<br />
consultant. During his PhD, he serves as lecturer in the Organizational Change course. His research<br />
interests include dynamic capabilities, organizational design <strong>and</strong> IT management.<br />
Fergal Carton is a senior researcher in the Financial Services Innovation Centre (FSIC) at University<br />
College Cork in Irel<strong>and</strong>. Fergal’s research domain is the integration of IS into business processes for<br />
resource visibility, performance control <strong>and</strong> decision support. Fergal leads FSIC research in the Payments<br />
Industry, with a particular focus on mobile payments.<br />
Sunil Choenni heads the department of Statistical <strong>Information</strong> <strong>Management</strong> <strong>and</strong> Policy Analysis of the<br />
Research <strong>and</strong> Documentation Centre (WODC) of the Dutch Ministry of Justice <strong>and</strong> is professor of human<br />
centered ICT at the School for Communication, Media <strong>and</strong> <strong>Information</strong> Technology, Rotterdam University of<br />
Applied Sciences. His research interests include data warehouses <strong>and</strong> data mining, databases, egovernment,<br />
<strong>and</strong> human centered design.<br />
Marie-Therese Christiansson, is a senior lecturer in <strong>Information</strong> Systems at Karlstad University in Sweden.<br />
Her research interest covers process oriented driven business <strong>and</strong> system development. The focus of her<br />
research is co-production in an established network of practitioners, in private as well as public<br />
organisations, with interest in e-Service development <strong>and</strong> lightweight business process methodologies.<br />
Maria Concetta De Vivo is assistant professor of Private Law, professor of information law, the Digital<br />
Economy Law <strong>and</strong> Administration, Law <strong>and</strong> New Technologies at the University of Camerino. He is also the<br />
author of essays on law <strong>and</strong> new technologies.<br />
Rita Cristóvão graduated in 2001 from Nova School of Business <strong>and</strong> Economics <strong>and</strong> post-graduated in<br />
2004 from INDEG Business School. In 2001 worked as management consultant at Deloitte in the healthcare<br />
sector. In 2004 started to work in SIGIC <strong>and</strong> is now the assistant coordinator of SIGIC in the Central<br />
Administration of the NHS.<br />
Renata Paola Dameri is professor in Accounting <strong>and</strong> <strong>Information</strong> Systems at Faculty of Economics,<br />
University of Genova, Italy. She is visiting professor in IT governance at the University of Paris-Dauphine.<br />
She is also member of the research Unit “<strong>Information</strong> Systems” at Bocconi School of <strong>Management</strong>.<br />
Jan Devos is a lecturer in IT/IS at Ghent University department Howest. He holds a master’s degree in<br />
Computer Science <strong>and</strong> an MBA. He has his own company <strong>and</strong> conducted more than 50 expert opinions on<br />
IS failures. His current research interests are IT in SME’s <strong>and</strong> IS failures.<br />
Kim Dong-Hyun is a senior researcher of National <strong>Information</strong> Society Agency in Korea. He is an member<br />
of the IT society <strong>and</strong> IT evaluation, <strong>and</strong> is a consultant to ministerial officers in the Korean government with<br />
interests in the information society <strong>and</strong> future plans<br />
Leonora Esteves is a post-graduate in Territorial <strong>Management</strong> (Environment <strong>and</strong> Natural Resources), at the<br />
Universidade Nova de Lisboa, <strong>and</strong> Collaborator at the e-Geo Research Center for Geography <strong>and</strong> Regional<br />
Planning, in the Environmental <strong>and</strong> Socio-economic Dynamics: Managing for Sustainability investigation<br />
group.<br />
ix
Bruno Miguel Gomes Félix in 2006 he started his degree in Computer Engineering on Instituto Superior<br />
Técnico(Lisbon) <strong>and</strong> finished in 2009. In 2009 he started his master’s degree <strong>and</strong> he hopes to finish this<br />
year. In 2010 heI started hisMaster’s thesis with title SimplexIS.<br />
Denisa Ferenčíková is a PhD c<strong>and</strong>idate at Tomas Bata University in Zlin – Faculty of <strong>Management</strong> <strong>and</strong><br />
Economics. In 2009 she received a Master´s degree in Industrial Engineering. Her current research involves<br />
advanced methods for production planning <strong>and</strong> scheduling, <strong>and</strong> their support in enterprise information<br />
systems. She also tutors Business information systems <strong>and</strong> Logistics.<br />
Jorge Ricardo Ferreira is an assistant professor at Universidade Nova de Lisboa. His PhD was on “The<br />
Geography of <strong>Information</strong> Society”. His primary research domains are in the fields of <strong>Knowledge</strong><br />
Dissemination <strong>and</strong> Geographical <strong>Information</strong> Technologies. He is also a member of e-Geo, Research Centre<br />
on Geography <strong>and</strong> Regional Planning.<br />
Dr Graham Fletcher spent 15 years in industry after completing his PhD, running several industrial R&D<br />
departments. In 2008 he joined Cranfield university’s academic staff where his interests include how I.S.<br />
research is affecting professional practice. He also works closely with the Cranfield School of <strong>Management</strong>,<br />
where he runs several projects evaluating the complex feedbacks in social <strong>and</strong> technical systems.<br />
Bernardo Silva Gomes is currently a finalist student of the Master’s degree (MsC) in <strong>Information</strong> Systems<br />
<strong>and</strong> Computer Engineering at the Instituto Superior Técnico (Oeiras, Portugal). He finished his Bachelor’s<br />
Degree (BsC) in <strong>Information</strong> Systems <strong>and</strong> Computer Engineering in 2006, also at the Instituto Superior<br />
Técnico.<br />
Yawanuch Gulatee chose his doctorate subject based on his knowledge <strong>and</strong> interests. In particular, he<br />
really wanted to find a better solution to improve <strong>Information</strong> Technology teaching, whilst taking an interest in<br />
Australian culture.<br />
Aida Hadzic is a PhD student at the Department of Applied IT, IT University in Gothenburg. She has a<br />
systems science background <strong>and</strong> a second level education in the field of IT management. Aida is studying<br />
issues related to management <strong>and</strong> architectural design of both existing <strong>and</strong> future IT investments.<br />
Florian Hamel is a PhD c<strong>and</strong>idate at the Institute of <strong>Information</strong> <strong>Management</strong> of the University St Gallen. He<br />
did his MSc. <strong>and</strong> BSc. in <strong>Information</strong> Systems at the Technische Universität München <strong>and</strong> National<br />
University of Singapore <strong>and</strong> gained work experience in software engineering <strong>and</strong> management consulting<br />
during his studies. His research interests are performance management of IT costs <strong>and</strong> benefits in business<br />
groups.<br />
Antonio Hidalgo L<strong>and</strong>a received the MSc degree in Computational <strong>and</strong> Software techniques for<br />
engineering form Cranfield University, UK <strong>and</strong> the MEng degree in computer science from the University of<br />
Murcia. He is currently working towards a PhD at Cranfield University, UK. His main research fields include<br />
SOA communication over "Disadvantaged Grids".<br />
Martin Hill has twenty years’ experience of building commercial information systems, from Kenyan camel<br />
farmers to satellite operators. Five years developing these for disaster <strong>and</strong> frontline military operations have<br />
evolved into academic research leading to, amongst other things, a PhD. Field experience includes<br />
operations in Iraq, numerous exercises, <strong>and</strong> an Afghanistan deployment is intended.<br />
Ben Holzmann is currently a Ph.D. student at Tel-Aviv University. He graduated from the Technion Institute<br />
in Haifa (Eng.), <strong>and</strong> has been a professional engineer for the last twenty five years. Ben participated in<br />
numerous projects of a large variety of disciplines.<br />
Vered Holzmann, MBA, is an experienced practicing project manager with a distinguished track record in<br />
managing computer software development teams, the implementation of quality assurance programs <strong>and</strong> the<br />
management of fast track construction projects. She is a faculty member in H.I.T. <strong>and</strong> lectures at Tel-Aviv<br />
University.<br />
Grant Howard is studying for a PhD in <strong>Information</strong> Systems at North-West University, South Africa. He holds<br />
an MSc in <strong>Information</strong> Systems from University of South Africa (UNISA) <strong>and</strong> is currently a lecturer at the<br />
School of Computing, UNISA in Florida, South Africa. Previously he was a business analyst for a financial<br />
software development company.<br />
x
Minna Isomursu, PhD, is a research professor of networked services <strong>and</strong> media at VTT Technical research<br />
centre of Finl<strong>and</strong>. Her research explores how social media can be used to enhance <strong>and</strong> enable ICT-based<br />
services. Her current research projects study use of social media <strong>and</strong> new ICT based service concepts for<br />
older adults.<br />
Tiko Iyamu is a Professor of <strong>Information</strong> Systems at the Tshwane University of Technology, Pretoria. His<br />
research interests include mobile computing, enterprise architecture <strong>and</strong> information technology strategy. He<br />
focuses on actor network theory <strong>and</strong> structuration theory,<strong>and</strong> is the author of numerous peer-reviewed<br />
journal <strong>and</strong> conference proceedings articles.<br />
Paulo João is a PhD. student in Statistics <strong>and</strong> Operations Research at the University of Lisbon, with a Msc<br />
<strong>and</strong> Bsc in Statistics <strong>and</strong> <strong>Information</strong> <strong>Management</strong> (ISEGI-UNL), a post-graduate degree in Systems <strong>and</strong> IT<br />
(UNI) <strong>and</strong> Evaluation <strong>and</strong> Organizational Development (ISCTE). He worked for 20 years in the police <strong>and</strong><br />
currently works as a computer specialist responsible for IT security in the central administration of the<br />
Portuguese health system.<br />
Adam Jansen is a Ph.D. student in Archival Studies at the University of British Columbia <strong>and</strong> a research<br />
assistant on InterPARES. He earned an MSc from Eastern Washington University in Business Administration<br />
<strong>and</strong> Computer Science, <strong>and</strong> worked most recently as the Deputy Washington State Archivist. His current<br />
research focuses on preservation <strong>and</strong> the forensic analysis of trustworthy digital records.<br />
Hallur Leivsgarð Joensen is a Business Development Engineer from AU Herning 2009. Hallur is currently<br />
employed as an associate on a research project on the conversion of recreational ships to renewable energy<br />
propulsion. At the same time, Hallur is on an MSc study program in Technology Based Business<br />
Development, with particular emphasis on cleantech.<br />
Björn Johansson holds a PhD in <strong>Information</strong> Systems Development from the Department of <strong>Management</strong> &<br />
Engineering at Linköping University. He currently works as Associate Senior Lecturer in the Department of<br />
Informatics, Lund University. Previously, he worked as a Post Doc. at the Center for Applied ICT at<br />
Copenhagen Business School. He is a member of the IFIP Working Groups IFIP 8.6 <strong>and</strong> IFIP 8.9.<br />
Ghassan Kbar is the Director of the Research <strong>and</strong> Business Development department at Riyadh Techno<br />
Valley RTV, Saudi Arabia. He holds a PhD in Computer Networking from UNSW Australia-1997, <strong>and</strong> a<br />
Master‘s in Engineering Studies from the University of Sydney. He has roughly 22 years of experience in<br />
R&D <strong>and</strong> Academia <strong>and</strong> has published 50 articles in international conferences <strong>and</strong> journals.<br />
Soudabeh Khodambashi holds a Bachelor’s degree in information technology from the Polytechnic<br />
University of Tehran, Iran. He is now studying for a Master‘s in <strong>Management</strong> <strong>Information</strong> System at the<br />
University of Kebangsaan, Malaysia. His research area is the evaluation of Health <strong>Information</strong> Systems <strong>and</strong><br />
clinical process re-engineering.<br />
Erdem Kirkbesoglu graduated from Baskent University in 2004. He is a Ph.D student in the Department of<br />
<strong>Management</strong> <strong>and</strong> Organizations <strong>and</strong> his research interests include Organisation Theory <strong>and</strong> Organisational<br />
Behaviour. He is currently a full-time lecturer at Baskent University.<br />
Bert Kleersnijder holds a Master’s in Business Administration, specialising in Business <strong>and</strong> ICT, <strong>and</strong><br />
studied under the guidance of Professor E. Berghout. His thesis subject was ‘The Assessment of project<br />
portfolio management’, at the municipality of Groningen in the Netherl<strong>and</strong>s. He is currently<br />
‘<strong>Information</strong>manager’ <strong>and</strong> his research interests are in information management, portfolio management, IT<br />
evaluation, <strong>and</strong> business cases.<br />
Juha Kontio is a Director of Education in the Faculty of Telecommunication <strong>and</strong> e-Business at the Turku<br />
University of Applied Sciences. His current research interest connects to higher education related topics. He<br />
has presented <strong>and</strong> published in numerous international conferences, on topics such as quality assurance,<br />
staff development <strong>and</strong> organisational issues in information systems.<br />
Ermelinda Kordha Ph.D. is currently teaching <strong>Management</strong> <strong>Information</strong> systems at Faculty of Economy,<br />
University of Vlora, Albania. Dr. Kordha has been participant in a number of national <strong>and</strong> international<br />
conferences, has published her work in several national <strong>and</strong> international journals <strong>and</strong> has been organizer of<br />
scientific activities in the university.<br />
Sevrani Kozeta Ph.D. is teaching <strong>Management</strong> <strong>Information</strong> Systems <strong>and</strong> is Head of the Department of<br />
Mathematics, Statistics <strong>and</strong> Applied Informatics, at the Faculty of Economy, University of Tirana. She is part<br />
xi
of Editorial Board of several international journals <strong>and</strong> is consulting private companies <strong>and</strong> government<br />
agencies in Albania<br />
Misoo Kwon, Ph D, is Director of the National DB Project Dept., National <strong>Information</strong> Society Agency (NIA),<br />
<strong>and</strong> a Professor at the Graduate school of policy studies, Korea Univ., Seoul, Korea. He is also PM for the<br />
Green IT National Strategy Development Project of Presidential Committee <strong>and</strong> Green Growth Expert<br />
Advisor of Korea‘s Presidential Government Deregulation Committee.<br />
Luigi Lavazza is associate professor at the University of Insubria at Varese, in the Department of Computer<br />
Science <strong>and</strong> Communication. His research interests include empirical software engineering <strong>and</strong><br />
measurement, process evaluation <strong>and</strong> improvement, <strong>and</strong> the requirements engineering. He is the co-author<br />
of over 100 scientific papers, a member of the IEEE computer society, <strong>and</strong> an IARIA fellow.<br />
Valentina Lenarduzzi is a PhD student in Computer Science at Insubria University (Como). She received<br />
her Master‘s in Environmental Engineering at the Milan Politecnico in 2008 <strong>and</strong> then focused her interests on<br />
Marketing, working first for MITA Biorulli as Sales engineer, <strong>and</strong> then to Ecoconsulting as Sales Manager.<br />
Her research interests focus on Software Marketing, Open Source Marketing <strong>and</strong> Open Source Adoption.<br />
Monika Magnusson is a senior lecturer in <strong>Information</strong> Systems at Karlstad University in Sweden. Her<br />
research is mainly in the e-commerce <strong>and</strong> e-services area, foc<strong>using</strong> on adoption <strong>and</strong> evaluation. Other<br />
research interests include e-business/e-service model design <strong>and</strong> the use of social media, such as<br />
Facebook, for customer interaction in businesses <strong>and</strong> public agencies.<br />
Thanos Magoulas is a senior lecturer at the IT-university of Gothenburg. For several years he has been<br />
responsible for the Master‘s programme in IT management. His current research interest relates to<br />
Enterprise Architecture.<br />
Panagiotis Manolitzas holds a Bachelor in Public Administration (specialization in <strong>Management</strong> Science)<br />
from the University of Athens <strong>and</strong> an MSc in Public <strong>Management</strong> (specialization in <strong>Management</strong> Science)<br />
from the University of Athens. Panagiotis. He has written the book ‘Principles of Business Administration’. He<br />
is a Member of Hellenic Operational Research Society.<br />
Nata van der Merwe has 24 years of experience - 10 years as an IS/IT professional <strong>and</strong> 14 years as an<br />
IS/IT lecturer - lecturing at the University of Cape Town, as well as the Cape Peninsula University of<br />
Technology. Her main research interest is the use of project-based teaching as a teaching <strong>and</strong> learning<br />
strategy.<br />
Alemayehu Molla is an Associate Professor at the School of Business IT <strong>and</strong> Logistics, RMIT University.<br />
His research areas are Green IT <strong>and</strong> digital business. He has published more than 90 articles, in the<br />
European Journal of <strong>Information</strong> Systems, <strong>Information</strong> & <strong>Management</strong>, International Journal of E-commerce,<br />
Journal of E-commerce Research, <strong>and</strong> Journal of E-commerce in Organizations, amongst others.<br />
Gunilla Myreteg is an Assistant Professor at Uppsala University, Sweden. Her research interests include<br />
how information technologies, especially ERP systems, are designed <strong>and</strong> used in organizations for a variety<br />
of information purposes.<br />
Hesbon O. Nyagowa is a PhD student at the University of Zulul<strong>and</strong>, South Africa, specialising in <strong>Information</strong><br />
Studies. He a obtained Master‘s of Business <strong>and</strong> Administration, specialising in <strong>Management</strong> <strong>Information</strong><br />
Systems at University of Nairobi, Kenya. He is currently the Academic Registrar of Kenya Polytechnic<br />
University College, a constituent college of the University of Nairobi.<br />
Gizem Ogutcu graduated from Baskent University‘s Department of <strong>Management</strong> <strong>Information</strong> Systems in<br />
2008, <strong>and</strong> completed her post graduate education in <strong>Information</strong> Technologies & System <strong>Management</strong> in<br />
2010. She is a Ph.D student at METU Medical Informatics Department <strong>and</strong> a full-time research assistant at<br />
Baskent University Department of <strong>Management</strong> <strong>Information</strong> Systems. Research interests include IT<br />
Governance, <strong>Information</strong> Security, Hospital <strong>Information</strong> Systems <strong>and</strong> E-transformation.<br />
Roslina Othman obtained a PhD (<strong>Information</strong> Retrieval) from Aberystwyth University, Wales, MLIS from<br />
IIUM, <strong>and</strong> BBA (Finance) from Eastern Washington University. Othman is an Associate Professor at the<br />
Faculty of ICT, IIUM, <strong>and</strong> a consultant to NAM Institute of Empowerment for Women (bridging gender digital<br />
divide) <strong>and</strong> MCMC for customer satisfaction survey on mobile applications.<br />
xii
Elmarie Papageorgiou is a Senior Lecturer in the School of Accountancy at the University of the<br />
Witwatersr<strong>and</strong> in Johannesburg, South Africa. She is the Division Head <strong>and</strong> Course Co-ordinator of<br />
Business <strong>and</strong> Accounting <strong>Information</strong> Systems that form part of the Chartered Accountant curriculum. Her<br />
research interests include Executive, Business <strong>and</strong> Accounting <strong>Information</strong> Systems.<br />
Shabnam Pas<strong>and</strong>ideh graduated with a Master‘s in <strong>Information</strong> Technology <strong>Management</strong> from the Science<br />
<strong>and</strong> Research Branch, IAU, Tehran, Iran. She finished her BS in Applied Mathematics from AmirKabir<br />
University in 2003. Currently she is working as a research expert in Azad University (SRBIAU). Her<br />
research interests include decision-making issues, especially relating to commerce <strong>and</strong> industry.<br />
Kalevi Pessi leads the IT management research group at the IT University of Gothenburg. He has served as<br />
Managing Director <strong>and</strong> <strong>Knowledge</strong> <strong>Management</strong> Director for many years in trade <strong>and</strong> industry. As a<br />
consultant he has been working with large international corporations. His current research interest relates to<br />
IT business value <strong>and</strong> architectural design.<br />
Elias Pimenidis is a senior lecturer at the University of East London in the United Kingdom. The core of his<br />
research work focuses on e-business <strong>and</strong> e-government development projects, their management <strong>and</strong><br />
evaluation. Other research includes web service security issues <strong>and</strong> the use of computer games for<br />
educational purposes.<br />
Michal Pivnička is a PhD c<strong>and</strong>idate <strong>and</strong> works in the Department of Industrial Engineering <strong>and</strong> <strong>Information</strong><br />
Systems at the Faculty of <strong>Management</strong> <strong>and</strong> Economics, University of Tomas Bata in Zlin as an Assistant<br />
Professor. He is interested in information systems (ERP, BI) <strong>and</strong> Balanced Scorecard. And he teaches<br />
Business <strong>Information</strong> Systems.<br />
Alberto Polzonetti received his Master‘s degree in electronic engineering at University of Pisa <strong>and</strong> he is a<br />
member of Italian engineer’s registry. He is a researcher in Computer Networking <strong>and</strong> e-Government <strong>and</strong> a<br />
member of the "UEG - UNICAM E-Gov Research Group".<br />
Bart-Jan van Putten works as a research associate for SAP Research in Dresden, Germany. He is currently<br />
writing his dissertation on IS investment evaluation. Prior to joining SAP he studied Industrial Design (BSc)<br />
<strong>and</strong> <strong>Information</strong> Science (MSc). Bart-Jan did internships at Philips Research, Océ Research in The<br />
Netherl<strong>and</strong>s <strong>and</strong> at the NASA Ames Research Center in California.<br />
Rozilawati Razali received her BSc in Software Engineering from Sheffield HallamUniversity, United<br />
Kingdom. Prior to joining Universiti Kebangsaan Malaysia, she worked in industry for about six years as a<br />
Software Engineer. She obtained her MSc from Universiti Teknologi Mara <strong>and</strong> PhD in Computer Science<br />
from University of Southampton, United Kingdom. Her research interests include requirements engineering<br />
<strong>and</strong> empirical software engineering.<br />
Siti Rohimi Hamedon graduated with a Ph.D (Library & <strong>Information</strong> Science) from IIUM, MSc (<strong>Information</strong><br />
<strong>Management</strong>) from UiTM <strong>and</strong> BSc (Mathematics) from Trent University. Hamedon is a Mathematics Lecturer<br />
at the Centre for Foundation Studies, IIUM. Her personal experiences as a mature student have been<br />
contributory in the development of the academic research methodology.<br />
Vahid Saadat received his Bachelor‘s degree in Computer Engineering in 2001 at Ferdowsi University in<br />
Iran. He started <strong>Management</strong> study at Tehran University (2009) <strong>and</strong> now works on his Thesis. Since 2001 he<br />
has been working at some banks in Iran <strong>and</strong> presents some IT solutions in eBanking. His main research<br />
interests are eCity, eBanking <strong>and</strong> IT <strong>Management</strong>.<br />
Ted Saarikko is a PhD-student at the Department of Applied IT, IT University in Gothenburg. He has a<br />
background in computer science, as well as language studies, prior to earning his Masters degree in<br />
informatics. Ted is currently studying issues relating to Enterprise architecture <strong>and</strong> sustainable development.<br />
Teresa Santos is a doctoral researcher at e-GEO, Centre of Geographical <strong>and</strong> Regional Planning Studies,<br />
New University of Lisbon, Portugal. She has a Master’s in GIS from the Technical University of Lisbon<br />
(Portugal), <strong>and</strong> is presently studying for a PhD in geography, with a scholarship from the Portuguese<br />
Foundation for Science <strong>and</strong> Technology.<br />
Mohamad Norzamani Sahroni is a PhD student at the Universiti Kebangsaan Malaysia under a scholarship<br />
from the Ministry of Higher Education, Malaysia <strong>and</strong> the Universiti Teknologi MARA (UiTM), Malaysia. He<br />
has been working with UiTM as a lecturer since 2003. His PhD research is in the area of medical informatics,<br />
with a specific focus on evaluation <strong>and</strong> error.<br />
xiii
Elena Serova has a PhD in Economics. She is currently a Senior Lecturer for the <strong>Information</strong> Technologies<br />
in <strong>Management</strong> Department, GSOM Saint-Petersburg State University. Her research Interests are<br />
<strong>Information</strong>: the technological resources of Russian Economy, Managing <strong>and</strong> Using <strong>Information</strong> Systems, a<br />
Strategic Approach, Enterprise <strong>Information</strong> Systems, <strong>and</strong> marketing <strong>Information</strong> Systems.<br />
João Soares graduated in 2006 <strong>and</strong> is now pursuing a Master‘s Degree in Computer Science specialising in<br />
Enterprise <strong>Information</strong> Systems. Within Enterprise Architecture, his interests are Models <strong>and</strong> Frameworks,<br />
Business-IT Allignment <strong>and</strong> Methods, <strong>and</strong> Processes <strong>and</strong> Patterns for EA Development.<br />
Sharina Tajul Urus is currently is a full time PhD student at School of Business IT <strong>and</strong> Logistics, RMIT<br />
University, Melbourne. She completed her Master‘s in Accounting from Curtin University of Technology <strong>and</strong><br />
her BA (Hons) Accounting & Finance from De Montfort University, Leicester, UK. Her research interests<br />
include Enterprise Resource Planning <strong>and</strong> Feral system.<br />
Torben Tambo is Associate Professor at AU Herning <strong>and</strong> Director of Studies in Technology Based Business<br />
Development. Torben holds an MSc from the Danish Technical University <strong>and</strong> has published in the Journal<br />
of Enterprise Architecture, the Journal of Economic Dynamics <strong>and</strong> Control, International Association for<br />
<strong>Management</strong> of Technology.<br />
Pietro Tapanelli is a Ph.D. student in e-Government services at the University of Camerino. After graduating<br />
in law, he took a Master‘s in Law, Economy <strong>and</strong> <strong>Information</strong> Technology, <strong>and</strong> graduated from the School of<br />
Specialization in Civil Law at the same university.<br />
Jose Teixeira is currently taking his doctoral studies in Turku University. He has studied at Oporto<br />
University, IAE Aix-en-Provence, Turku School of Economics <strong>and</strong> Tilburg University, covering topics on<br />
computer science, information systems, management <strong>and</strong> economics. He also worked in the Industry for<br />
reputable companies such as Wipro, Tesco <strong>and</strong> Nokia. His research addresses the open-source software<br />
phenomenon.<br />
Nelly Todorova is a senior lecturer at the Department of Accounting <strong>and</strong> <strong>Information</strong> Systems at the<br />
University of Canterbury, New Zeal<strong>and</strong>, where she teaches at undergraduate <strong>and</strong> postgraduate level. Her<br />
current research interests focus on the general areas of knowledge management <strong>and</strong> IS evaluation <strong>and</strong>,<br />
more specifically, value creation in knowledge management.<br />
Bartosz Wachnik specializes in MIS implementation. He is a member of senior management of Alna<br />
Business Solutions in Pol<strong>and</strong>, a branch of the Lithuanian company, which is one of the largest IT companies<br />
in the Baltic area. He has published more than 20 articles in professional <strong>and</strong> academic journals, <strong>and</strong> has cooperated<br />
with University of Technology in Warsaw where he holds a PhD.<br />
Mohd Yusof is a head researcher at the Software Technology <strong>and</strong> <strong>Management</strong> Centre at the Faculty of<br />
<strong>Information</strong> Science <strong>and</strong> Technology, Universiti Kebangsaan, Malaysia. She holds a PhD in <strong>Information</strong><br />
Systems from Brunel University, West London. Her research focus includes HIS evaluation, <strong>Management</strong><br />
<strong>Information</strong> Systems, <strong>Information</strong> Systems development, <strong>and</strong> the Viable System Model.<br />
Hamed Majidi Zolbanin is a Master's student in urban affairs management at university of Tehran. Since<br />
completing his Bachelor's studies in computer engineering (at Sharif University of technology), he has<br />
worked on IT competency development among municipal managers. He is currently working in the IT<br />
department of the Tehran Stock Exchange.<br />
xiv
<strong>Information</strong> <strong>and</strong> <strong>Knowledge</strong> <strong>Management</strong> Using <strong>ArcGIS</strong><br />
<strong>ModelBuilder</strong><br />
João Agrela, Leonor Esteves, Jorge Ferreira <strong>and</strong> Óscar Antunes<br />
Universidade Nova de Lisboa, Portugal<br />
Joao.agrela@gmail.com<br />
l.raquel@clix.pt<br />
jr.ferreira@fcsh.unl.pt<br />
oscarduarteantunes@gmail.com<br />
Abstract: The advent of Geographical <strong>Information</strong> Systems (GIS) brought into play an array of tools to interpret<br />
the ever growing multitude of geographical variables. The fact that these tools exist does not, nonetheless, mean<br />
that it’s easy or clear to make valid interpretations of the available information, which ultimately means that the<br />
validity of the methods of interpretation may not be enough to make clear planning decisions. The present<br />
contribution aims to demonstrate that the geographical nature of available data is in itself an object of<br />
interpretation that must precede the use of the GIS tools, <strong>and</strong> that they must be presented to the user as a flow of<br />
reasoning, a logic-based representation of problem-solving steps. In what concerns this presentation, the authors<br />
will present what is, from their point of view, one of the most useful methods of visualizing these steps <strong>and</strong> also<br />
one of the most practical tools for local planning. The human interpretation of geographical information is vital,<br />
because it is the user that decides the nature of the relations between the data, based on its individual attributes.<br />
Also, the manner in which the information is viewed is also important because the choice of used tools is based<br />
on an ontological view of the geographical science. Some users prefer to act <strong>using</strong> only vector data set claiming<br />
that it’s the best way to represent reality, <strong>and</strong> other users state that raster data set is the best base to solve a<br />
problem providing it has a good enough resolution. The authors argue that the best way to proceed is to identify<br />
the nature of the geographical variable <strong>and</strong> to use vector or raster data considering which is most suitable for<br />
each variable. Ultimately the decision between raster or vector data lays upon the decision making agents <strong>and</strong><br />
what they want as a final output. The article points out that the use of the ArcGis tool Model Builder is the best<br />
way to view the flow of operations <strong>and</strong> that the models built in this way are extremely valuable for local<br />
governments (assuming that the same problem may afflict different regions). As such, it is stated that the first<br />
step for GIS based problem solving is the clear distinction between context, structure, support <strong>and</strong> created<br />
information <strong>and</strong> that the models have to reflect these relations. The models also have to solve the vector/raster<br />
data problem effectively <strong>and</strong> they have to be as simple as possible. To demonstrate the stated the authors<br />
present one model to point out the preferable methodology <strong>and</strong> ontological approach of problem solving (the<br />
model being about the problem of finding the location of a Wastewater Treatment Plant in the municipality of<br />
Amadora, Portugal) <strong>and</strong> afterwards several examples of Models created with the Model Builder tool that aim to<br />
solve specific problems (Risk cartography for Urban Fires in Lisbon, Portugal; Preferable areas for the<br />
implementation of a network for urban cycling in Lisbon, Portugal; Preferable areas for the implementation of a<br />
network of urban agriculture plots).<br />
Keywords: geographical information system, spatial modeling, information dissemination, model builder,<br />
geography<br />
1. The need for modeling<br />
Globalization <strong>and</strong> the intensification of relations between territories, institutions, enterprises <strong>and</strong><br />
population have undeniably increased competitiveness among cities <strong>and</strong> regions, which, in turn,<br />
forced the territory to a constant mutation aiming for an adaptation to the surrounding environment<br />
(LÚCIO, et al, 2010;LOPES, 2001).<br />
Thus, a profound knowledge about geography, enterprise <strong>and</strong> population locations, territorial policies<br />
<strong>and</strong> strategies, is imperative for defining a multivariate evaluation model that contributes to decision<br />
making, allowing also the definition of new planning tools <strong>and</strong> territorial policies, <strong>and</strong> the improvement<br />
of the already existing ones as well (MATOS, 2008).<br />
Trying to achieve an integrated planning of the territory that articulates its local, regional <strong>and</strong> national<br />
scopes, which in turn are inseparable from the institutions who manage them, is crucial to articulate<br />
the goals of the planning process with the indicators of that territory’s dynamics in its various<br />
dimensions (socioeconomic, demographic, environmental, technological, R&D, l<strong>and</strong> use <strong>and</strong><br />
occupation, knowledge society). These reflect the causes of its growing, regression or stagnation,<br />
comparatively to other regions.<br />
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João Agrela et al.<br />
Faced with the massive amount of information currently at our disposition, a planner finds that it is<br />
crucial to analyze <strong>and</strong> filter it, in a way after which only the significant information remains, i.e., the<br />
one that suits the most to the project goal <strong>and</strong> available technology, applying the adequate treatment<br />
<strong>and</strong> analysis methods, regarding its advantages <strong>and</strong> disadvantages <strong>and</strong> the degree of influence on<br />
the project.<br />
In this process, where the georeferencing distinguishes the spatial data from the statistical data, GIS<br />
tools acquire a crucial part through its capability of managing, producing <strong>and</strong> analyzing spatial data,<br />
providing different solutions according to the different scenarios, existing or foreseen to the future.<br />
After the announcement of this data manipulation capabilities in the 1970’s (MATOS, 2008) with the<br />
surge of quantitative geography (since the 1990’s), GIS (Geographic <strong>Information</strong> Systems) enabled<br />
the evolution of that data manipulation to the current level of geographic modeling.<br />
After collecting, editing <strong>and</strong> validating data, spatial analysis allows the assessment of relations, <strong>and</strong><br />
patterns between them, <strong>and</strong> of those with the surrounding space, giving the information an<br />
operational value in geographic modeling to support decision making. Being in reality a generalization<br />
tool, a model always starts from a hypothesis, which is not unresponsive to the project purpose, or to<br />
the influence of the human factor which defines the inputs <strong>and</strong> the operations that generate the<br />
outputs of each model. Therefore, considering an evaluation one wants multivariate, modeling allies<br />
spatial <strong>and</strong> temporal analysis of the territory, in an effort to assist the creation <strong>and</strong>/or adequacy of<br />
planning policies, supporting the decision making process.<br />
In the Emmanuel Kant perspective (English empirical perspective from the late 18 th century, in<br />
MATOS, 2008, p.14), everything that happens in a certain time <strong>and</strong> space is a phenomenon passable<br />
of experimentation <strong>and</strong> interpretation. Henceforth, the first problem that arises almost immediately is<br />
the multitude of phenomena that a geographer or planner may be confronted to when solving a<br />
certain problem. Also with the ever-growing information society the amount of relations established<br />
between phenomena has also grown accordingly.<br />
Technology has provided Humankind with tools to analyze <strong>and</strong> interpret such relations, namely GIS.<br />
These tools have firstly appeared in part because of the growth in information amount <strong>and</strong> availability<br />
(allied with the advances in hardware of the past century).Soon the responsible agents with the<br />
difficult task of planning the territory saw the possibility of providing for the need of a greater analysis<br />
capability of the phenomena that occurred in the territory.<br />
Modeling these phenomena became possible, allowing the establishment of relations until then<br />
invisible to the planners. This fact provided better interpretations of the territory <strong>and</strong> better solutions<br />
for problems that go from finding simple optimal rotes to nuclear power plants location.<br />
However, the fact that modeling is possible does not mean that models in themselves are not fallible.<br />
Models are just as fallible as their designers assuming that these are unable to identify the variables<br />
in play in the phenomena that occur in the territory, the nature of the information available <strong>and</strong> do not<br />
have a good array of ethical values <strong>and</strong> laws that should be visible throughout the models.<br />
The technology available to solve problems based in geographical information is nowadays so<br />
advanced that the user’s ability to interpret the problems has been put under the microscope. The<br />
method per se for <strong>using</strong> the ArcGis Model Builder (the chosen tool for this paper) is easy <strong>and</strong><br />
repetitive; mostly it is a sequence of operations done on preexisting geographical information that<br />
creates new information <strong>and</strong> so on in sequence. But the choices of operations <strong>and</strong> the sequence of<br />
the operations done by the users reflect human concerns <strong>and</strong> they are usually done in light of a legal<br />
frame. Also the inputs of information that allow the models to run have to be treated accordingly to the<br />
nature of the phenomena being observed, <strong>and</strong> this treatment is exclusively done accordingly with the<br />
sensibility of the user to the complexity of the phenomena. Space may flow, crumble or simply be<br />
static, but it must be treated accordingly <strong>and</strong> if not the model will return incorrect solutions.<br />
Another matter that must be pointed out is the limitations of visualization of the geographical<br />
information, namely vector <strong>and</strong> raster (based upon the nature of the data recollection method). This<br />
limitation implies that the user has to choose which type of data <strong>and</strong> visualization is better for each<br />
variable of the phenomenon.<br />
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João Agrela et al.<br />
So modeling becomes directly dependent not so much on the existing technology, but much more on<br />
the user responsible for the model. According to Couclelis (cited by MATOS, 2008) the physical<br />
phenomena may be either atomic or plenum, homogenous or heterogeneous, continuous or<br />
discontinuous, adjacent or disperse, solid or fluid, 2D or 3D, past or actual, static or variable, fixed or<br />
mobile <strong>and</strong> conventional or self defined. In this human interpretation of the physical characteristics of<br />
phenomena are enough possibilities for error <strong>and</strong> this classification does not approach ethical or legal<br />
matters. The users have to add <strong>and</strong> associate to the models the data about variables as dubious as<br />
good <strong>and</strong> bad <strong>and</strong> legal <strong>and</strong> illegal.<br />
Having the above notions in mind it was found by the authors that the discussion about ethics <strong>and</strong><br />
methods used in planning per se is, in Portugal, insufficient (LÚCIO et al, 2010). Multiple approaches<br />
for the same problem in different locations allows frequently for different solutions or views (LÚCIO et<br />
al, 2010 in opposition with FONTES et al, 2005). In themselves, both approaches seem sound, but<br />
this ultimately implies that every municipality may have at least one approach for solving the same<br />
problem. There is no measure in Portugal of the funding that is spent financing these solutions, but<br />
one can infer that if there is no degree of centralization in problem solving the waste probably exists<br />
<strong>and</strong> it probably is not small.<br />
2. The method for modeling <strong>using</strong> ArcGis Model Builder<br />
The Model Builder application is, in its essence, a set of tools for different purposes. There are many<br />
tools available in the basic ArcGis software, including analysis tools, network tools, data management<br />
tools, etc. These tools operate on raster or vector data. The difference between these two is that<br />
raster data represents reality translating it into a matrix of pixels, each with specific values, <strong>and</strong> the<br />
vector data simplifies <strong>and</strong> represents reality in its basic geographic forms (lines, polygons <strong>and</strong> points).<br />
Each type of data has its advantages <strong>and</strong> disadvantages, for example raster data allows a full data<br />
coverage of space <strong>and</strong> because of that it requires a lot of hard disk space, whilst vector data is lighter<br />
but it does not cover space completely. They are used with a simple drag <strong>and</strong> drop logic <strong>and</strong> the<br />
chain in which they are arranged is established by the user. If used incorrectly or without some<br />
special notions (for instance, the pixel size must be the same for grid algebra) the outputs will be<br />
wrong. The model design is the vehicle for the human concerns, the order of the operations must be<br />
carefully weighed so that these concerns are encompassed within a logical chain.<br />
Figure 1 displays the basic view of the Model Builder, with all the available tools to the left.<br />
Figure 1: ArcGis Model Builder basic view<br />
The basic layers are displayed in blue, the operations in yellow <strong>and</strong> the outputs in green. Every<br />
operation must be correctly connected, otherwise the model will simple not run.<br />
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João Agrela et al.<br />
This is a fairly user friendly tool but a user needs to have a few GIS notions <strong>and</strong> data types<br />
management experience, for some operations are only used on certain types of data.<br />
3. The case study: Practice <strong>and</strong> experimentation<br />
Figure 2: Amadora location<br />
This case study is based on a problem that is relatively common in most municipalities, namely where<br />
to place a waste water treatment plant. The municipality used for the case study is Amadora,<br />
immediately to the west of Lisbon, Portugal. The authors found that this is also a good example of a<br />
problem which also brings into play ethical values <strong>and</strong> because of that it is not a matter that should or<br />
can be approached without adding human concerns into the model.<br />
It is also an objective that the model is easily understood by any subsequent user (not directly<br />
involved in its creation), because the model might eventually be used for other municipalities, if the<br />
legal parameters with geographical implications are adjusted. Geographical information usually exist<br />
in thematic layers, so in what concerns this paper every variable is a layer of geographical<br />
information, independent from the others from the start.<br />
The first step was the identification of the geographical variables that are in play in the municipality. It<br />
will not be pointed out every variable, but some may be used as examples, as follows:<br />
Physical/natural variables:<br />
Hydrographical network, Portuguese National Ecological Reserve, Portuguese National<br />
agricultural reserve, terrain.<br />
Human variables:<br />
Sewage network, railways, road network, social services (hospitals, schools, etc.).<br />
It is easy to underst<strong>and</strong> that a sewage treatment plant is a needed structure but it has the mark of the<br />
not in my back yard (NIMBY) logic. We need it but the citizens don’t want it anywhere near them. For<br />
a planner <strong>and</strong>/or political decision maker this is a highly sensitive subject.<br />
The second step was to adjust the formats of the information in a way that it could be easily related<br />
<strong>and</strong> operated on. Most of this information did not have the same coordinate system associated so the<br />
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João Agrela et al.<br />
ETRS 89 projection was used as the INSPIRE European Directive states. Several changes had to be<br />
made in the thematic layers of information.<br />
Every variable was stored within a geoDataset, <strong>and</strong> every dataset in a geoDatabase. This is needed<br />
for it allows better operational flow within the model. It was necessary to create some layers of<br />
information from other sources, <strong>using</strong>, for instance, PDF imagery from municipal services (for<br />
example, the information on Geology did not exist on shapefile format <strong>and</strong> had to be recreated<br />
through vectorization from a PDF municipal file).<br />
Another important step was to limit all the information to the institutional municipal limits, so as to limit<br />
any error that might occur during the map algebra stage of this process.<br />
All the above steps were needed just to create a viable geographical information database, with<br />
correctly georeferenced information, limiting redundant information <strong>and</strong> allowing quicker processing of<br />
all Model Builder tools. One aspect has to be pointed out by the authors: these steps are vital not only<br />
for a Model Builder based project. It is necessary to take all these steps in any GIS based project to<br />
achieve maximum efficiency. All the data normalization may be, at times, a time consuming <strong>and</strong><br />
troublesome stage but it is essential to create a steady basis for the project. It does not do well to<br />
build a castle on s<strong>and</strong>y foundations.<br />
The theoretical starting point is a simple assumption: some geographical variables have in their<br />
nature a prohibitive aspect that does not allow the installation of the above mentioned public<br />
installation. Geographical variables have between themselves relations of neutrality, repulsion <strong>and</strong><br />
attractiveness. Giving a quick example, the geographical nature of the variable “Hospital” repels the<br />
geographical nature of the variable “Sewage Treatment Plant”. The intensity of repulsion or<br />
attractiveness is directly related to the direct or partial incompatibity of natures of the geographical<br />
variables.<br />
After all the pre-project stages of data formatting <strong>and</strong> preparation it is thus necessary to identify the<br />
nature of all the variables <strong>and</strong> the variables that are absolutely opposite, or only partially opposing (for<br />
instance, there might not be any geologically suitable l<strong>and</strong> parcel in the municipality, which means we<br />
would have to choose the “lesser evil”, which is to say, a less suitable l<strong>and</strong> parcel).This method<br />
implies that there will be intermediate cartography created. This is a useful fact, because the users of<br />
the models can always go back to the intermediate cartography to check why the final choice of<br />
location was made. It is also a very valuable stage of direct validation of the model, since the users<br />
can check which branch of the model is returning more accurate outputs. In this model we may point<br />
out three Intermediate outputs.<br />
These intermediate outputs have meaning <strong>and</strong> an ethical <strong>and</strong> value related approach to it. The first of<br />
the three branches is named Favorable Placing Cartography (FPC) <strong>and</strong> every pixel has a positive<br />
numeric value.<br />
Figure 3: Favorable placing cartography branch<br />
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João Agrela et al.<br />
The next branch was named Resistance Cartography (RC) which represents the areas that do not<br />
completely prohibit the placing of this equipment, but returns some kind of resistance to it (mostly<br />
because of variables related to public opinion, in line with the NIMBY logic). The Pixel values of the<br />
RC are gradual, allowing for the addition or subtraction on the FPC Pixel values. This operation will<br />
allow that all the pixel values of X become a scale of values of 1, 2, 3 etc, which is to say it will<br />
provide a distinction of good, better <strong>and</strong> best locations (Location Cartography, LC).<br />
Figure 4: Resistance cartography branch<br />
After the map algebra between the FPC <strong>and</strong> RC no pixel values may return with a negative value.<br />
The final branch is the Prohibitive Location Cartography (PLC). This cartography has been classified<br />
so that the pixel values that represent variables of repulsive nature are all negative (having been<br />
multiplied by a constant value input of -1). These are immediately assumed as Non-Aedific<strong>and</strong>i areas.<br />
The rest of the pixels are graduated <strong>and</strong> the higher the value, the better the location for the<br />
equipmen.This cartography is then multiplied with the LC <strong>and</strong> returns the final Optimal Location<br />
Cartography (OLC). The negative values were discarded.<br />
Figure 5: Prohibitive location cartography branch<br />
Resuming, the map algebra operations <strong>and</strong> the combination of all the branches go as follows:<br />
OLC = (FPC-RC)TLC<br />
The OLC will be the representation of choices on physical variables, ponderations on ethical values,<br />
<strong>and</strong> legal aspects with geographical expression, <strong>and</strong> all the pixel values will be graduated accordingly<br />
to the sum of all these aspects.<br />
Afterwards, <strong>and</strong> assuming that the l<strong>and</strong> prices are homogenous, the areas with more than 2000<br />
square meters were chosen, because the model returns very small areas that must be weeded out.<br />
Having clearly determined the optimal location of the sewage treatment plant it was deemed<br />
necessary to perform some network analysis, namely optimal routes in case of an accident or a<br />
severe malfunction in the plant.<br />
These analyses were found necessary because, in planning, one has to see all possible outcomes of<br />
a certain public equipment placement. Some public equipments may originate extreme events<br />
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João Agrela et al.<br />
(accidents) that may be foreseen <strong>and</strong> thus considered. The network analyses done were of two<br />
distinct types, namely emergency services routes (fire fighters, police, health centers, hospitals) <strong>and</strong><br />
hydrants locations. These variables were chosen because they are the basis of any type of rescue<br />
operation. Electric stations were proposed as a useful variable but there was no georeferenced data<br />
available.<br />
Figure 6: The graphic view of the logical expression<br />
Figure 7: Network analyses branch<br />
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João Agrela et al.<br />
The network analysis for mobile forces was done by assuming an average velocity for every X<br />
distance. This does not take into account traffic conditions, even though it was discussed the use of<br />
traffic intensity values (these do not exist for the case study area). The formula used was<br />
[Shape_Length] /1000/( [MAX_SPEED]/60) which expresses the relation between the length of the<br />
road <strong>and</strong> the maximum speed achievable in it. This calculates the average time used by any<br />
emergency unit to go through the entire route. Also it was found that going in wider roads means that<br />
it is easier to go faster, so the hierarchy of the road network was also taken into account, again by the<br />
use of graduated values.<br />
It was thought that the routes should encompass every emergency station <strong>and</strong> not only the closest<br />
one because there might be an accident occurring that has already used up the resources of the<br />
closest facility. The hydrant analysis was based only on proximity of the plant location. It was not<br />
deemed necessary to find other hydrants because these public equipments are checked periodically<br />
for malfunctions <strong>and</strong> should be always in perfect working order.<br />
The final model is thus the sum of every branch as is represented in Figure 8, which leads to the final<br />
location indicated in Figure 9, as well as the Network cartography in Figure 10. The model built has<br />
more than 80 operations so it is hard to explain every consideration taken whilst building <strong>and</strong><br />
validating it.<br />
4. Discussion<br />
In this Chapter we list the immediate advantages of the Model Builder approach, while trying to point<br />
out some possible flaws.<br />
The strong points of the Model Builder approach to municipal <strong>and</strong> regional problem solving are as<br />
follows:<br />
St<strong>and</strong>ardization of methods between municipalities <strong>and</strong>/or l<strong>and</strong> management entities (National<br />
Advantage);<br />
Ethical issues contemplated;<br />
Workflow visualization (Local <strong>and</strong> National Advantage);<br />
Storing of models (Local <strong>and</strong> National Advantage);<br />
Cartography updating easily made, since it is only neaded an update of the basic information <strong>and</strong><br />
not of the model itself (Local Advantage);<br />
Easy manipulation of one specific operation at any time, without having to repeat any of the<br />
others (Local <strong>and</strong> National Advantage);<br />
Instant output creation <strong>and</strong>/or update.<br />
As flaws the authors may point out that:<br />
A possible weakness of this approach is that some municipalities have rare carachteristics not<br />
foreseen by the entities responsible with the actual model building. This would lead either to the<br />
use of unfit cartography for the region in question or to the need of changing the model in itself.<br />
Changing the model within the municipality would mean that the purpose of st<strong>and</strong>ardization would<br />
not be met, ultimatly removing the advantages for the National Scale.<br />
Another weakness is that for the model to run <strong>and</strong> be usefull the municipality has to have all the<br />
required information with the appropriate st<strong>and</strong>ardization. With big models, the amount of base<br />
information may be proportionaly big, <strong>and</strong> to get all the information may a time comsuming task<br />
for the municipalities. In the municipality of Tomar, Portugal, for instance, there is a great lack of<br />
base information wich would render the model useless (LÚCIO, et al, 2010).<br />
The Model Builder tool is exclusive of one specific software, which does not allow for the use <strong>and</strong><br />
interlinkage of open source software. This directly implies large implementation costs <strong>and</strong> a<br />
trained work force on this subject.<br />
Finally, in Portugal the dissimination of GIS tools is not widespread, <strong>and</strong> there is some cultural<br />
resistance to the adoption of new technologies.<br />
8
Figure 8: Final model<br />
João Agrela et al.<br />
9
Figure 9: Optimal location cartography<br />
5. Final results <strong>and</strong> conclusion<br />
João Agrela et al.<br />
The above model returned four types of cartography in a single problem solving approach, <strong>and</strong> quite a<br />
few more intermediate cartography of relative interest (mainly outputs of reclassifications of pixel<br />
values). It included human concerns <strong>and</strong> ethical values, as well as legal aspects embedded in the<br />
reclassifications of pixel values.<br />
As such, one fine-tuned model may be produced <strong>and</strong> shared between l<strong>and</strong> management offices to<br />
create outputs that have the same legal framework, reducing the disparities that may arise between<br />
different planning departments of different regions with similar problems.<br />
Ultimately it is possible to create a database of models <strong>and</strong> when a certain problem arises one can<br />
search the files of existing models <strong>and</strong> just run the model as instructed in the MetaData of the model<br />
(a twin file that accompanies the model itself with instructions for its use <strong>and</strong> information about its<br />
creation).<br />
The possibilities are as varied as the phenomena that occur in the territory <strong>and</strong> the nature of the<br />
information available on these phenomena <strong>and</strong> the relevance for L<strong>and</strong> <strong>Management</strong> results from the<br />
simplification of bureaucracy <strong>and</strong> direct time saving.<br />
This methodology is fed with a continuous flow of geographical information. The workflow allows for<br />
the complexification of the model by constant knowledge upgrading, improving the quality of the<br />
10
João Agrela et al.<br />
outputs <strong>and</strong> results. In the end, planning <strong>and</strong> l<strong>and</strong> management benefit from the use of this kind of<br />
models <strong>and</strong> improve the quality of life. <strong>Information</strong> gathered in the right way becomes <strong>Knowledge</strong> <strong>and</strong><br />
this element is crucial to define better territorial strategies.<br />
Figure 10: Network analyses outputs<br />
LOPES stated: “a good deal of the persisting problems are owed to (…) a relative inability in tackling<br />
the problems in its entirety” (translated from LOPES, 2001, p. 348). Also, LOPES quotes Kuklinski<br />
(LOPES, 2001, p. 348) when he identifies the difficulties for municipal <strong>and</strong> regional planning which are<br />
the basis for this Model Builder approach that tries to overcome the following difficulties:<br />
Correct inventory of the available resources;<br />
Identification of development barriers;<br />
Correct selection of strategies;<br />
Correct choice of methods <strong>and</strong> models, including the correct tools.<br />
11
References<br />
João Agrela et al.<br />
Fontes, Ana; Gonçalves, António (2005), Cartografia de Risco de Incêndio no Parque Nacional da Peneda-Gerês<br />
e Gestão Adequada dos Recursos Florestais e Sistemas Naturais, Conference Proceedings, X Colóquio<br />
Ibérico, Évora<br />
Lobo, Manuel da Costa, (1999) Planeamento Regional e Urbano, Universidade Aberta, Lisboa<br />
Lopes, A. Simões, 2001, Desenvolvimento Regional, Fundação Calouste Gulbenkian, Lisboa<br />
Lúcio, José; Esteves, Leonor; Agrela, João; Emanuel, Óscar (2010), Cartografia de Risco e Resposta – Mata<br />
Nacional dos Sete Montes e Riscos de Incêndio, Conference Proceedings, Planeamento Municipal e<br />
Ordenamento do Território, FLUL, Lisboa<br />
Matos, João (2008) Fundamentos de Informação Geográfica, Lidel, Lisboa<br />
Morgado, Paulo; Rocha, Jorge; Costa, Nuno <strong>and</strong> Costa, Eduarda (2007), “Comparação de métodos e técnicas<br />
de análise multivariada linear (ACP) e não linear (SOFM) em SIG. Ensaio de modelação geográfica de<br />
indicadores de apoio a políticas públicas territoriais”, XIV Jornadas de Classificação e Análise de Dados,<br />
ISEP, Porto.<br />
Neto, Paulo Alex<strong>and</strong>re (1999), The Relation Geographic <strong>Information</strong> System (SIGR) A Proposal of a New<br />
Methodology for Regional <strong>and</strong> Local <strong>Management</strong> <strong>and</strong> Planning,39 th ERSA European Congress, Dublin<br />
Soares, Amílcar (2006), Geoestatística para as Ciências da Terra e do Ambiente, 2ª Edição, IST Press, Lisboa<br />
12
System Integration Model Based on Open Source Software<br />
(Oss)<br />
Kamsuriah Ahmad 1 , Azwan Mohamed 1 <strong>and</strong> Reduan Samad 2<br />
1 Strategic <strong>Information</strong> System Research Group, Universiti Kebangsaan<br />
Malaysia, Malaysia<br />
2 Asia E-University, Malaysia<br />
kam@ftsm.ukm.my<br />
azwanmohd@gmail.com<br />
Abstract: Application system is an important component to support business organizations. <strong>Information</strong>,<br />
communication <strong>and</strong> information technology have made developing business becomes very competitive. It is very<br />
crucial for companies to have fast <strong>and</strong> accurate access to mission-critical business information in order to<br />
maintain its competitiveness. The ability to establish network connections between the existing systems becomes<br />
a must in order to optimize the use of critical information. To realize this, the implementation of system integration<br />
looks promising. However, system integration process is not an easy task because it involves variety of systems<br />
with different organizations backgrounds. The main objective of this paper is to propose an integration model that<br />
is generic <strong>and</strong> easily adapted by many organizations. The <strong>Information</strong> <strong>Management</strong> Division, Public Sector<br />
Department in Malaysia is chosen as a case study. The systems used in this department will be analyzed <strong>and</strong><br />
problems faced will be identified. Research methodology conducted includes the Analysis Phase, Design Phase,<br />
Development Phase <strong>and</strong> Testing Phase. In order to support the proposed model, prototype called myIntegration<br />
is implemented based on OpenSyncro. OpenSyncro is an open source software (OSS) meant for Enterprise<br />
Application Integration (EAI). The Testing Phase was carried out by taking into account the actual test scenario<br />
involving the Department A (owner of the Malaysian Personal Record) <strong>and</strong> Department B (Human Resources<br />
Manager of Malaysian Civil Servants). Tests conducted have shown that the exchange of information between<br />
the Department A <strong>and</strong> B have been successfully realized. The finding from this research, where a new integration<br />
model has been created, can be referred by any government or private organizations in developing their systems<br />
integration facilities. The model also besides reducing the requirement of hardware; also reduces the<br />
dependency to proprietary products. In addition, the prototype developed, which based on OpenSyncro is<br />
capable in providing an alternative solution to the IT community to anchor any systems integration project at a<br />
lower cost <strong>and</strong> in a user friendly environment.<br />
Keywords: system integration, middleware solution, integration model, open source software, Enterprise<br />
Application Integration (EAI)<br />
1. Introduction<br />
System integration refers to the construction of linkages among computer systems <strong>and</strong> databases<br />
(Markus 2000). System integration is necessary as organizations often have to add more functionality<br />
into the organization <strong>Information</strong> Systems (IS) portfolio, which frequently entails dealing with<br />
indispensable legacy systems. In order to support the business process during the development of<br />
information systems, most officers <strong>and</strong> IT staff put less emphasis on issues of integration <strong>and</strong> interoperability<br />
between systems. This integration issues have been addressed by Malaysian<br />
Administrative Modernization <strong>and</strong> <strong>Management</strong> Planning Unit (MAMPU) as the most important body<br />
in the development of Malaysian e-Government Applications. This issue is important to ensure the<br />
continuity of successful implementation of various systems integration in the near the future<br />
(Khairuddin, 2010). Several issues need to be addressed seriously before any attempts being made<br />
in integrating various systems. Among the issues are incompatible operating systems, different usage<br />
of data scheme, mapping methods, network stability <strong>and</strong> costing. According to Braue (2002), in<br />
average most organization allocate around 40% of their total IT budget to ease system integration.<br />
This may explain why agencies or even commercialized organizations which put less emphasis on the<br />
system integration aspect will face the risk of failure in their businesses. Our review on several studies<br />
suggests that research on system integration requirements modeling has been scarce; among those<br />
studies conducted, a significant number of them only focus on data integration (Schmitt <strong>and</strong> Saake,<br />
2005). However every organization have unique business process <strong>and</strong> infra structure. Therefore,<br />
before proposing suitable integration model <strong>and</strong> selecting appropriate implementation solutions, a<br />
holistic <strong>and</strong> clear underst<strong>and</strong>ing of the enterprise-wide integration requirements among various<br />
internal <strong>and</strong> external systems is needed. In this study, the <strong>Information</strong> <strong>Management</strong> Division (IMD),<br />
Public Sector Department in Malaysia is chosen as a case study. The systems used in this division<br />
will be analyzed <strong>and</strong> problems faced will be identified. Therefore the main objective of this paper is to<br />
propose an integration model that is generic enough <strong>and</strong> easily adapted by other public organizations<br />
13
Kamsuriah Ahmad, Azwan Mohamed <strong>and</strong> Reduan Samad<br />
in Malaysia. The paper is organized as follow: Section 2 will discuss the three system integration<br />
methods, section 3 reveals the issues related to integration system. In section 4 reports the analysis<br />
of the existing integration tool used at <strong>Information</strong> <strong>Management</strong> Division (IMD). While in section 5<br />
states the various type of integration software. In section 6 discuss the design of proposed system<br />
integration model <strong>and</strong> the testing of this model is reported in section 7. Section 8 concludes the paper<br />
<strong>and</strong> proposal for future works.<br />
2. Integration system method<br />
According to Hohpe & Woolf (2003), integration system method can be implemented in four different<br />
ways: file transfer, shared database, remote procedure invocation, <strong>and</strong> messaging.<br />
File Transfer: This method refers to the process of file or document movement from one system to<br />
another system through network <strong>and</strong> supported by File Transfer Protocol (FTP). This method allows<br />
the sharing of documents or materials among government sector. As an example, one department<br />
able to upload documents at their website <strong>and</strong> interested user can download the documents at the<br />
other side. The concept of uploading <strong>and</strong> downloading documents from government department has<br />
promotes the existence of efficient <strong>and</strong> effective electronic application. This process will increase<br />
accessibility of the documents through uploading <strong>and</strong> downloading without the users have to go to the<br />
department to get particular documents.<br />
Shared Database: This method allows the system to integrate multiple information from various<br />
applications into centralized database. However the database schema needs to be analyzed earlier<br />
since most of the applications are developed separately <strong>and</strong> have different schema. Hohpe & Woolf<br />
(2003) states that integration process will be a lot easier with this method since it is able to adapt the<br />
SQL database features. The access to centralized database by different applications will limit the<br />
semantic dissonance problem. The challenge to this method is to construct a single database that has<br />
the same schema <strong>and</strong> definition, because normally the system is developed by different vendors <strong>and</strong><br />
will have different needs, function <strong>and</strong> technology. Many organizations now have used a st<strong>and</strong>ard<br />
schema <strong>and</strong> data definition to increase the interoperability among application. For instance, Malaysian<br />
Administrative Modernization <strong>and</strong> <strong>Management</strong> Planning Unit (MAMPU) has introduced a st<strong>and</strong>ard<br />
reference called National Data Dictionary (NDD) to be used for system development that involved the<br />
used of schema <strong>and</strong> data dictionary.<br />
Remote Procedure Invocation/Call: This method used encapsulation principal in the integration<br />
process between systems. If an application requires data from other application, it will request the<br />
related data from the particular system. If the data are going to be modified later it will be done on the<br />
data that involve with that application only, whereas the original data remain the same. The data<br />
integrity will be secured. However Hohpe & Wolfe (2003) states that this method has problems with<br />
accessibility <strong>and</strong> stability.<br />
Messaging: Most organizations <strong>and</strong> government agencies have more than one application to support<br />
their business functions. However, these applications are being developed by different vendors, with<br />
different programming languages <strong>and</strong> platforms. Therefore it is very crucial for the organization to<br />
share the information between applications in a very responsive way (Hohpe & Woolf, 2003).<br />
Messaging method seems promising to provide a solution to this problem. Messaging means all<br />
integrated applications are connected through the same messaging system, so that the data can be<br />
sent <strong>and</strong> received among the applications. According to Hohpe & Woolf (2003), this method will make<br />
the integration process easier, faster, <strong>and</strong> reliable.<br />
3. Integration issues<br />
In developing an integrated system there are several issues that need to be considered, such as the<br />
technology, human resource <strong>and</strong> policies (Ellison, 2005). Technology: the existing technology being<br />
used in the organization made the integration process possible. However the challenges that need to<br />
be considered are the unpredictability of network stability, which is one of the most critical factors in<br />
ensuring the success of system integration initiative. In addition, the different used of data schemas<br />
might slow down the integration process where the data need to go through the mapping phase in<br />
order to get a common schema. Human Resource: The attitude of the end user gives a big impact to<br />
the success of any ICT projects. Zaiton et. al (2000) report this phenomena has been one of the<br />
important deciding factors in project successes in Malaysia. Among the identified problem coming<br />
from the end users is computer-phobia phenomenon among some of the senior staffs, who are lack of<br />
14
Kamsuriah Ahmad, Azwan Mohamed <strong>and</strong> Reduan Samad<br />
knowledge on the importance of system integration, change of duty <strong>and</strong> etc. Organization Policies:<br />
System integration project initiative normally requires efficient communication between two or more<br />
systems in the same or different organization. Therefore, the change of policies in any organization<br />
will affect the implementation of system integration. The changes normally tried to improve the quality<br />
of services, the delivery of service <strong>and</strong> the staff. Therefore the proposed system integration needs to<br />
consider these three issues during the development.<br />
4. Analysis on current system<br />
Before a new integration system is proposed, analysis was conducted on the current integration tool<br />
used at the <strong>Information</strong> <strong>Management</strong> Department. This department involved in the development of<br />
Human Resource <strong>Management</strong> <strong>Information</strong> System (HRMIS) Integration Interface. Analysis is done<br />
through reviewing related document such the integration document agreement between the human<br />
resource systems with other legacy systems, interviewing current employees, browsing the<br />
department website, <strong>and</strong> etc. HRMIS is an application system for managing information on human<br />
resource for public sector. To make the system more comprehensive it needs to integrate with 27<br />
legacy systems from various government sectors. Among those are the National Registration<br />
Department, Putrajaya Hospital, Selangor State Development Corporation, <strong>and</strong> others. These 27<br />
systems are connected through a server called iHub. This server is an integration tool that developed<br />
based on MS Biztalk <strong>and</strong> SQL2000. There are six functions of iHub, which are: accessing data from<br />
the source system, sending data to the target system, data mapping or data transfer process, data<br />
compressing or decompressing, data encryption or decryption, <strong>and</strong> saving the log transaction for data<br />
integration. To execute these six processes, one unit of iHub needs to be installed between two<br />
legacy systems. When the process of integration is needed, iHub at the HRMIS side will signal the<br />
other legacy system (target system) by sending a message <strong>and</strong> the request. When the target system<br />
received the message, it will response towards the request <strong>and</strong> replied back to HRMIS application.<br />
The sending <strong>and</strong> receiving process appeared as a batch or real time processing. This process is<br />
described in Figure 1.<br />
HRMIS<br />
INTEGRATION<br />
SERVER<br />
OTHER HRMIS<br />
COMPONENTS<br />
WAN<br />
S<br />
T<br />
A<br />
G<br />
I<br />
N<br />
G<br />
S<br />
T<br />
A<br />
G<br />
I<br />
N<br />
G<br />
S<br />
T<br />
A<br />
G<br />
I<br />
N<br />
G<br />
AGENCY 1<br />
AGENCY 2<br />
AGENCY n<br />
Figure 1: The integration of HRMIS with other legacy systems<br />
Although iHub has been successfully implemented in the integration of HRMIS with other legacy<br />
systems, <strong>Information</strong> System Department believes there are rooms for improvement. Among the<br />
identified issues are high development <strong>and</strong> maintenance cost, <strong>and</strong> lots of equipments <strong>and</strong> hardware<br />
required. A study is done to propose a new solution or mechanism as an alternative solution to this<br />
problem. The study found that there is a possibility to use open source software to replace the<br />
proprietary software being used in order to reduce the cost.<br />
5. Integration tools<br />
To develop a system integration tool: we can choose whether to use proprietary software or open<br />
source software (OSS). OpenAdaptor is an integration tool that based on OSS with Java/XML<br />
technology. This tool is efficient for fast development since less programming is required as it comes<br />
15
Kamsuriah Ahmad, Azwan Mohamed <strong>and</strong> Reduan Samad<br />
with lots of embedded functions. OpenAdaptor is known for its friendliness in implementing the<br />
integration processes. OpenSyncro, another open source based integration tool is developed by<br />
Smilehouse Research <strong>and</strong> Development. It is a very light software application that based on Java<br />
platform <strong>and</strong> uses Apache Tomcat as the application server with MySQL as the database. Both of<br />
these tools are free. At the Public Service Department in Malaysia, an integration tool called iHub<br />
which was development by local company is being used. This tool is able to integrate human resource<br />
application with 27 existing legacy systems. However this tool requires two unit of iHub for every two<br />
integration systems to increase the communication. Therefore to integrate 27 systems, 27 units of<br />
iHub are needed! This will increase the cost <strong>and</strong> the maintenance activity as well. The intention of this<br />
study is to reduce the dependency to proprietary software. This will lead to reducing the cost of<br />
development <strong>and</strong> maintenance. This study intends to investigate the possibility of <strong>using</strong> integration<br />
tools that based on OSS. Simple investigation is done on OpenAdaptor <strong>and</strong> OpenSyncro, <strong>and</strong> as the<br />
result, the latter has been chosen at the end. The main justifications for the selection are based on its<br />
plug <strong>and</strong> play features, <strong>and</strong> the ease of programming burden.<br />
6. The design of the proposed integration system: myIntegration<br />
OpenSyncro which is an open source software was used in the development of the propose model.<br />
This software has generic <strong>and</strong> open feature, therefore the proposed model is design according to<br />
these features. The elements that need to be considered during the design for the integration model<br />
are the transaction type, integration approach, <strong>and</strong> transaction method.<br />
Transaction Type: The design of integration system is highly depending on the type of transaction<br />
chosen. There are two types of transactions, which are request/response <strong>and</strong> notification.<br />
Request/response transaction requires back <strong>and</strong> forth communication between the integrated<br />
systems. Therefore, an accessed to the integrated system is needed (Grants.Gov, 2007).<br />
However, notification transaction only sends data from one system to another system without<br />
requires any answers.<br />
Integration Approach: The choice of integration approach also affects the integration design.<br />
There are two integration approaches. They are either integration based on files or integration<br />
based on real data. Integration based on files refers to the used of text or XML file in the process<br />
of sending <strong>and</strong> receiving data between the integrated system. Integration based on real data<br />
means the real data that exist in the database is used for the integration <strong>and</strong> the table is<br />
predetermined at the earlier stage.<br />
Transaction Processing Method: Two transaction methods which will affect the design of the<br />
integration model are batch processing <strong>and</strong> real-time processing. Batch processing normally<br />
refers to non critical transaction <strong>and</strong> requires a support from scheduler component to execute or<br />
monitor the transaction processing. This transaction is normally done outside the prime hours.<br />
Real-time processing is a critical transaction <strong>and</strong> requires fast <strong>and</strong> urgent accessed to the system.<br />
HRMIS integration with the Putrajaya Hospital requires this type of transaction method. A support<br />
from equipment that can monitor the system <strong>and</strong> the network status is really required.<br />
OpenSyncro offer the features that are able to integrate various systems by transferring data from<br />
source system to target system (<strong>and</strong> vice versa) through the concept of piping. This piping has three<br />
main components: source component (SC), destination component (DC), <strong>and</strong> converter component<br />
(CC). The components are described as below:<br />
Source Component (SC): This component saves the configuration information on the data access<br />
of the source system. There are thirteen embedded source component which are provided by<br />
Smilehouse. The developer can choose any one of these source components <strong>and</strong> make<br />
necessary adjustment according to the scope <strong>and</strong> integration development requirement. Among<br />
the components are: Directory Source (accessing data directly from the file <strong>and</strong> folder), FTP<br />
Source (accessing data source <strong>using</strong> FTP), HTTP Source (accessing data source <strong>using</strong> HTTP),<br />
<strong>and</strong> etc.<br />
Destination Component (DC): This component will identify the destination of data. Smilehouse<br />
has provides ten embedded destination components to be used by the developer. Among those<br />
are JDBC Destination (directly send the data to Java database), HTTP Destination (directly send<br />
the data to destination <strong>using</strong> HTTP, <strong>and</strong> etc.<br />
Converter component (CC): This component allows any changes on data format to be done<br />
during the process of sending <strong>and</strong> receiving. This component is important to overcome the<br />
complexity that may exist between two systems that are going to be integrated, such as the used<br />
16
Kamsuriah Ahmad, Azwan Mohamed <strong>and</strong> Reduan Samad<br />
of different data format. Smilehouse has also provides thirteen converter component templates to<br />
be used <strong>and</strong> adjusted accordingly to suit the development requirements. Among the components<br />
available are ASCII-to-XML converter (to change the ASCII format to XML format) <strong>and</strong> many<br />
others.<br />
Figure 2 shows the proposed integration model called myIntegration. This model shows an integration<br />
process between Department A <strong>and</strong> Department B. As a prototype, myIntegration is able to do these<br />
three functions: sending data to target system, receiving data from target system, <strong>and</strong> saving the<br />
transaction log during data integration process.<br />
DEPARTMENT A myINTEGRATION<br />
(OPENSYNCRO)<br />
DEPARTMENT B<br />
Staging Area Staging Area<br />
SC<br />
DC CC<br />
CC DC<br />
Figure 2: Integration system model: myIntegration<br />
MyIntegration consists of eight modules to support the integration process, which are users,<br />
components, pipe list, pipe editor, pipe setting, component editor, transfer log <strong>and</strong> pipe execution<br />
queue. This tool has eight embedded database table to ease the integration process development<br />
between the systems.<br />
7. Testing<br />
As a prototype myIntegration is tested on its capabilities to send <strong>and</strong> receive data, <strong>and</strong> to modify the<br />
data that being transferred. Therefore, the objectives for myIntegration testing are:<br />
To test whether data from source system can be read <strong>and</strong> transferred to target system <strong>and</strong> vice<br />
versa,<br />
To test whether the integrated data are able to be modified<br />
To check whether myIntegration is capable enough to be an alternative solution to the existing<br />
integration system at <strong>Information</strong> <strong>Management</strong> Department.<br />
The activities that were carried out during the testing of myIntegration are:<br />
Integration Testing – component testing, accessibility testing<br />
Pre-User Acceptance Testing – testing that involve the staff at IMD<br />
User Acceptance Testing – testing that involve with the subject matter expert, system owner <strong>and</strong><br />
the end user.<br />
The Testing Phase was carried out by taking into account the actual test scenario involving the<br />
Department A (owner of the Malaysian Personal Record) <strong>and</strong> Department B (Human Resources<br />
Manager of Malaysian Civil Servants). Various testing is done to myIntegration as reported in Table 1<br />
<strong>and</strong> the results obtained from those testing.<br />
Tests conducted have shown that the exchange of information between the Department A <strong>and</strong> B have<br />
been successfully realized. Even though myIntegration had failed in three testing as shown in Table 1,<br />
Integration System Sector at <strong>Information</strong> <strong>Management</strong> Department (IMD) identifies that these function<br />
are not critical. Therefore, the result obtained at the end of the testing phase indicates that the listed<br />
objectives above are achieved. In future, it is hoped that myIntegration can be seen as a solution to<br />
the system integration problems faced by IMD.<br />
17<br />
SC
Table 1: The testing criteria<br />
Kamsuriah Ahmad, Azwan Mohamed <strong>and</strong> Reduan Samad<br />
Testing Criteria Result Priority<br />
1 Send data electronically Pass Very high<br />
2 Receive data electronically Pass Very high<br />
3 Change the data file format from text to XML or vice versa Pass Very high<br />
4 Data compression <strong>and</strong> decompress Fail Low<br />
5 Data encryption <strong>and</strong> decryption Fail Low<br />
6 Transaction Integration Report Pass Very high<br />
7 Transaction Scheduling Fail Very high<br />
8. Conclusion<br />
The main focus of this study is to propose a new system integration model for BPMJPA. An<br />
integration tool called myIntegration is build to support the proposed model. Compared with the<br />
existing proprietary system integration model, iHub, myIntegration is based on OpenSyncro which is<br />
free software. With the generic features <strong>and</strong> free software application, the developed tool is easily<br />
adaptable by any organization who plans to integrate their system. In addition, the tool developed<br />
which based on OpenSyncro is capable in providing an alternative solution to the IT community to<br />
anchor any systems integration project at a lower cost <strong>and</strong> user friendly environment. However as a<br />
prototype, the developed integration transaction function for myIntegration only deals with temporary<br />
folders. Integration process that directly link to the database is not allowed for security reasons.<br />
Therefore as a future extension, a new model for system integration that is able to link directly to the<br />
database is really needed. The finding from this research, where a new integration model has been<br />
created, can be referred by any government or private organizations in developing their systems<br />
integration facilities.<br />
References<br />
Braue, D. (2002) The Integration Imperative. [online]. CIO Magazine. http://www.cio.com.au<br />
Ellison, R.J. (2005) “Trustworthy Integration: Challenges for the Practitioner”. Final Report. Carnegie-Mellon<br />
University of Pittsburgh.<br />
Grants. Gov. (2007) “System Integration Document Grants.gov System”, [online] http://www.grants.gov<br />
Hohpe, G. <strong>and</strong> Woolf, B. (2003) Enterprise Integration Patterns: Designing, Building, <strong>and</strong> Deploying Messaging<br />
Solutions. Addison Wesley.<br />
Markus, M. Lynne (2000) "Paradigm Shifts - E-Business <strong>and</strong> Business/Systems Integration," Communications of<br />
the Association for <strong>Information</strong> Systems: Vol. 4, Article 10.<br />
Khairuddin, S. (2010) “Single Data Centre for Optimized Service Delivery”, Proceedings of ICT Conference.<br />
Schmitt, I., & Saake, G. (2005) “A comprehensive database schema integration method based on the theory of<br />
formal concepts”, Acta Informatica, 41(7), 475-524.<br />
Zaitun,A.B., Mashkuri,Y <strong>and</strong> . Harpe, A.T. (2000) “System Integration for A Developing Country: Failure or<br />
Success? A Malaysian Case Study”, Electronic Journal of <strong>Information</strong> Systems in Developing Countries.<br />
Volume 3<br />
18
Building Virtual Communities on top of Online Social<br />
Networks<br />
Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
DICOM, Università degli Studi dell’Insubria, Varese, Italy<br />
cuneyt.akcora@uninsubria.it<br />
elena.ferrari@uninsubria.it<br />
barbara.carminati@uninsubria.it<br />
Abstract: Current day social networks have amassed large amounts of information on how people interact,<br />
consume data <strong>and</strong> disseminate ideas. Virtual organizations, on the other h<strong>and</strong>, have crafted frameworks <strong>and</strong><br />
models to use such data in distributed, heterogeneous environments. In this paper, we discuss the benefits of<br />
<strong>using</strong> social network technologies in support of virtual organizations. To emphasize which types of virtual<br />
organizations can benefit most from a social network based approach, we give a classification of social network<br />
relationships. Building on the work of sociologists, we focus on the cases when organization memberships can<br />
increase the benefits for members while also helping the organization to advance its cause. As a proof of concept<br />
application for our proposed solution, we created an application running on the popular social network Facebook.<br />
Keywords: virtual organizations, social networks, homophily<br />
1. Introduction<br />
In the past decades, urbanization <strong>and</strong> improving transportation have created an interconnected web<br />
of social relations that are best portrayed by popular social networks. The same factors have<br />
compelled organizations to create proprietary social networks (Cook 2008, McAfee 2006) to link<br />
people from their branches in different parts of the world together.<br />
For organizations that have well defined job locations <strong>and</strong> positions (e.g., NATO), such proprietary<br />
networks can be provided with user information once for all (e.g., electronics engineers in Budapest).<br />
However, these organizations require strong bonds with users (e.g., the user is a paid employee) so<br />
that the entered profile information does not change or gets quickly updated as long as the bond<br />
exists.<br />
For other types of organizations, bonds are weak; user locations <strong>and</strong> profiles are not well defined, <strong>and</strong><br />
the organization harnesses user contribution whenever it is possible to do so. Political parties <strong>and</strong><br />
humanitarian organizations are examples of such entities. With such weak bonds, user information on<br />
proprietary networks can be obsolete. As a result, timely location of users <strong>and</strong> collaboration among<br />
them can be costly <strong>and</strong> time consuming. A clear example is given when volunteers from all over the<br />
world participate in efforts of international humanitarian organizations to assist <strong>and</strong> recover local<br />
citizens from natural disasters. Design <strong>and</strong> management of proprietary networks to timely h<strong>and</strong>le<br />
collaborations <strong>and</strong> information sharing among volunteers may require too much effort (Costur 2005).<br />
To help overcome this limitation, social computing can be exploited. Social computing is based on<br />
facilitating social interactions <strong>and</strong> promoting any sort of social behavior through software<br />
technologies. Blogs, emails social network services <strong>and</strong> wikis fall in this category <strong>and</strong> are the main<br />
mediums that are used to gain user added value. With social computing, we aim at providing a bridge<br />
between popular social networks of hundreds of millions of users <strong>and</strong> virtual organizations which<br />
actively seek human participation for a social cause.<br />
Our proposal has only been possible after recent changes in the social networking paradigm. Unlike<br />
early social networking sites, such as MySpace, current day social networks allow third party software<br />
developers to reach social network users through a programming interface (API) (Nazir et al. 2008).<br />
However, to the best of our knowledge, no work has been proposed to use this functionality for<br />
creating virtual organizations on top of existing online social networks.<br />
By employing social computing for virtual organizations, we propose engaging with social network<br />
users for a social cause. This way, social computing can be exploited by organizations to facilitate<br />
communications among groups of users who share common values, <strong>and</strong> locate a set of users based<br />
on their profile information. To show the effectiveness of our proposal, we created a Facebook<br />
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Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
application that serves two functions: it helps organizations to locate their supporters, <strong>and</strong> allows<br />
media sharing among users to increase awareness in certain topics.<br />
The rest of the paper is organized as follows. Section 2 covers the sociological background of our<br />
proposal. In Section 3 we explain the motivation for creating a virtual organization on top of existing<br />
social networks. In Section 4 we give the related work, whereas Section 5 explains characteristics <strong>and</strong><br />
requirements of our proposal. Section 6 gives exemplary application domains for our proposal. In<br />
Section 7, we discuss a proof-of-concept Facebook application. Finally, Section 8 concludes the<br />
paper.<br />
2. Social relationships<br />
In sociology, creation <strong>and</strong> maintenance of relationship ties among similar individuals is explained by<br />
the homophily theory (McPherson 2001). According to homophily, personal attributes <strong>and</strong> connections<br />
affect creation of new ties in social life <strong>and</strong> result in homogeneous groups of individuals. Political party<br />
supporters <strong>and</strong> religious communities are examples of homophilous groups. However, homophily can<br />
be the direct result of how a society is structured. For instance in gender segregated schools, gender<br />
based homophily is a direct result of the school system because males <strong>and</strong> females create relation<br />
ties among themselves as they always interact with same sex individuals. To explain cases when a<br />
degree of homophily is expected by chance, researchers use baseline homophily, <strong>and</strong> when this<br />
degree is beyond mere chance, inbreeding homophily is said to exist. For example, if two Italians live<br />
in Italy, a marriage between them is explained by baseline homophily, whereas, if they live in Japan,<br />
the marriage reflects inbreeding homophily.<br />
Sources of homophily. For relationship ties, geography is the biggest source of homophily: individuals<br />
tend to create friendships with people that are around them. As the distance grows, ties weaken or<br />
get deleted, whereas in families, relation ties have been found to be resilient against distance effects<br />
(McPherson et al. 2001). When ties do not originate from families, some types of organizations, such<br />
as schools, work places, voluntary services are the biggest sources of homophily.<br />
Types of homophily. The attributes that cause homophily can be divided into two sets; sociologists<br />
use status homophily to describe homophily caused by personal attributes that are inherited or<br />
ascertained by factors from an individual’s family or background, such as race, age, ethnicity or<br />
gender. Value homophily, on the other h<strong>and</strong>, is used for homophily caused by attributes that are<br />
largely achieved by an individual, such as education, political view, beliefs <strong>and</strong> societal status.<br />
In status homophily, sex, race, ethnicity <strong>and</strong> age are the basic similarity notions between two<br />
individuals. Those similar points are inherited or gained r<strong>and</strong>omly without individual efforts, <strong>and</strong><br />
people that are similar along these attributes are easy to find in a geographic location. Expatriates are<br />
the only exception, because they might live in countries where same race or same ethnicity<br />
individuals are rare.<br />
Value homophily, on the other h<strong>and</strong>, depends on ideas <strong>and</strong> beliefs that are formed by the individual.<br />
As a result, similar people can be found across different societies <strong>and</strong> geographic locations. Creating<br />
connections with people that are similar in values hence becomes more difficult, <strong>and</strong> ties are prone to<br />
weakening as distance between two individuals grows.<br />
In what follows, we will discuss how homophily can be used as basis for virtual homophily-based<br />
organizations (VHOs) (Martinez et al. 2001) to advance prominence of some ideas while presenting<br />
similar individuals an opportunity to create relationships among them. In particular, we propose <strong>using</strong><br />
value homophily as the common ground among individuals for a virtual organization. At this point, we<br />
make another distinction among values that can be the basis for an organization; we are specifically<br />
interested in values which can most benefit from user interactions <strong>and</strong> exploit collective capabilities of<br />
individuals to accomplish tasks. For example, an organization that uses shared political views among<br />
its members as its basis can provide a venue to exchange ideas for new policies, <strong>and</strong> direct the<br />
members to demonstrations for more publicity. In this case, both the organization <strong>and</strong> its members<br />
can benefit from memberships.<br />
To capture the difference among values, we propose two goals for a successful VHO: providing i)<br />
added value for the organization <strong>and</strong> ii) added value for users. The main goal of the organization is to<br />
benefit from ideas or works of its user base <strong>and</strong> increase prominence of its values <strong>and</strong> cause.<br />
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Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
Moreover, users themselves expect to benefit from the value homophily organization. Such benefits<br />
may include meeting with similar people (which increases inbreeding homophily) or gaining access to<br />
powerful networks.<br />
Current day virtual organizations use proprietary web solutions. In these solutions, specific web sites<br />
are created for each virtual organization. In the next section, we will outline the benefits of <strong>using</strong> a<br />
social network instead of proprietary solutions.<br />
3. Why use a social network?<br />
Social networks offer some benefits that are difficult to be matched by proprietary web solutions.<br />
These benefits include regularly updated user profiles, updated user contact information, better<br />
penetration rate, security <strong>and</strong> privacy, <strong>and</strong> finally, feedback collection.<br />
Regularly updated user profiles. For targeted messages or deployment of users to certain tasks, an<br />
organization needs to keep track of user attributes such as location, education <strong>and</strong> profession.<br />
However, user data can be missing, <strong>and</strong> furthermore can be outdated when the organization needs it<br />
in future. Keeping normalized <strong>and</strong> updated profiles hence becomes an important part of maintaining<br />
organizational efficiency (Camarinha-Matos <strong>and</strong> Afsarmanesh 2006). Social network users, although<br />
not all of them <strong>and</strong> not all the time, update their profiles; hence user data are more available than<br />
they would be under a proprietary solution.<br />
Updated user contact information. User data are needed to classify users for allocating certain tasks,<br />
yet if the user is not reachable; all this effort goes to waste. In proprietary solutions where the user is<br />
asked for an email or mail address upon registration, user contact information cannot be updated<br />
without user input, hence in future the user might not use the same addresses when the organization<br />
tries to communicate. In social networks, user email addresses are updated upon a change, but more<br />
than that, a profile that is associated with a user can provide a bridge to disseminate news to the user<br />
even in the absence of an email address. For example, on Facebook a message to the user can<br />
provide email functionality.<br />
Better penetration rate. A proprietary web solution is by its nature only accessible to the people who<br />
know it. On the contrary, a social network like Facebook covers more than 750 million user profiles 1 in<br />
a connected network. Moving the proprietary solution to social networks broadens the horizons of the<br />
organization by making it accessible to a wider audience.<br />
Security <strong>and</strong> privacy. However simple, every proprietary web solution requires a certain level of<br />
security <strong>and</strong> privacy to ensure user profile integrity <strong>and</strong> confidentiality. On social networks, a subset of<br />
such procedures is taken care of by the social network providers. Current social networks, like<br />
Facebook, offer user login procedures to third parties for user interaction on these web sites.<br />
However, the organization will still need access control policies to define organizational roles.<br />
Feedback collection. In a proprietary web solution, feedback can only be gathered from members,<br />
excluding a wide range of non-member individuals from feedback collection. To make matters worse,<br />
value homophily organizations consist of members who share the same values with the organization,<br />
thus the organization risks collecting feedbacks only from a homogeneous group of individuals who<br />
already share the organization’s view. An example of this is political parties which ask supporters to<br />
rate party policies. On social networks, evaluation can be done with feedback from a more<br />
heterogeneous group of users, so the organization can learn which policies gain more sympathy, <strong>and</strong><br />
which ones are disliked by the society (not only by its supporters).<br />
Considering the above discussion, we chose Facebook as our target social network, because it is<br />
today the most popular <strong>and</strong> widely used social network. Moreover, unlike some other popular<br />
networks, like Twitter.com, Facebook offers user profiles with personal attributes. Noting these<br />
benefits that a social network can add to organizations, we now turn our attention to characteristics of<br />
a social network based VHO <strong>and</strong> describe the criteria for a successful architecture. Before that, we<br />
review the state of the art.<br />
1 1http://blog.facebook.com/blog.php?post=409753352130<br />
21
4. Existing technologies<br />
Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
In this section, we will first discuss the foundations of virtual organizations, <strong>and</strong> then proceed to review<br />
real life existing solutions.<br />
4.1 Literature review<br />
Much of the early research on virtual enterprises <strong>and</strong> organizations were influenced by Transaction<br />
Cost Economics (Williamson 1975) which proposes that manufacturing firms should use externally<br />
purchased goods to focus only on their core competencies. This idea necessitated outsourcing<br />
(obtaining goods or services from an outside supplier) parts of the manufacturing process to other<br />
business companies <strong>and</strong> required business-to business communications. For this purpose,<br />
frameworks (Inmon et al. 1997), (Schekkerman 2006), (Zwegers et al. 2003) <strong>and</strong> models (Stewart<br />
1997) have been proposed in the following years.<br />
Current research in this field works on bringing together individual entities by information technology<br />
to share resources <strong>and</strong> skill sets in order to improve market competency (Cardoso <strong>and</strong> Oliveira 2005),<br />
(Pang 2001), (Tan 2010). Similar to value homophily, this aspect of current research shares our goal<br />
of combining skills <strong>and</strong> abilities for greater market opportunities. However, such enterprises form a<br />
nebulous group of individual entities in which any entity can be changed. Moreover, cooperation<br />
between entities does not serve a higher purpose; instead each entity is present to increase its own<br />
profit <strong>and</strong> market share. In our proposal, members of the organization are connected by a central<br />
permanent node in the social network. This node provides an anchor for similar people to find <strong>and</strong><br />
interact with each other.<br />
Much of what we have discussed until now involves a form of commerce related symbiotic<br />
cooperation. With the advent of information theory, virtual enterprises have also been used in non<br />
commercial applications. Among them, humanitarian organizations use virtual enterprises to<br />
coordinate responses in an emergency (Charles, Lauras <strong>and</strong> Tomasini 2010), (de Leeuw, Kopczak<br />
<strong>and</strong> Blansjaar 2010). Similar to our proposal, humanitarian organizations have to find members <strong>and</strong><br />
control the cooperation among them. This cooperation serves the higher purpose of responding to an<br />
emergency in a timely manner. However, many of such organizations are created at the beginning of<br />
an emergency <strong>and</strong> memberships end when the emergency is over. Some researchers propose<br />
models to ensure that global capacity is built up <strong>and</strong> maintained before an emergency breaks out<br />
(Truptil et al. 2010). These capacities building humanitarian organizations are very similar to our<br />
proposal with the exception that their members are mainly not individuals but companies.<br />
Virtual organizations have also been used in collaborative networks where members can include<br />
individuals as well as companies (Baldo <strong>and</strong> Rabelo 2010), (Camarinha-Matos <strong>and</strong> Afsarmanesh<br />
2005). More than getting a single task done, collaborative networks can be used for long term<br />
projects. Collaborative networks make use of ontologies for member roles <strong>and</strong> capabilities (Plisson et<br />
al. 2007). Furthermore, data st<strong>and</strong>ards 2 are used to facilitate information exchange among members<br />
(Berners-Lee et al. 2001), <strong>and</strong> some proposals integrate social network data with collaborative<br />
network data (Fiumara et al. 2010).<br />
Our proposal is similar to collaborative networks in information exchange <strong>and</strong> member collaboration,<br />
yet it differs from them in <strong>using</strong> a publicly available, popular social network to recruit members.<br />
Furthermore, the main idea in collaborative networks is to use team effort. In this aspect, it diverges<br />
from our proposal to increase user interaction through membership in a virtual organization.<br />
Having explained the research foundations, in the next section we will discuss how these ideas have<br />
been implemented in real life solutions.<br />
4.2 Real life solutions<br />
Commercial solutions mainly involve outsourcing parts of a manufacturing process to subcontractors.<br />
Aventis (French Pharmaceuticals Company), Dell computers (US computer manufacturer) <strong>and</strong> British<br />
Telecom were the leading figures in transitioning to virtual enterprises for better profits.<br />
2 www.w3.org/TR/rdf-primer/ , www.unece.org/trade/untdid/welcome.htm<br />
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Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
In commercial solutions, the organization is built around a central entity, mainly because this entity<br />
provides the means for cooperation, <strong>and</strong> the entity benefits from the work of other individual entities.<br />
Those small entities also benefit from cooperation, but they are replaceable. In this approach the<br />
central node does not need to cultivate relationships among members. In commercial solutions that<br />
involve individuals, freelancing leads the way by web sites like Freelancer.com <strong>and</strong><br />
Freelanceswitch.com where one time services are offered for small fees. Similarly, online job<br />
agencies help individuals find employment opportunities.<br />
One of the most relevant fields that can benefit from VHO is the humanitarian organizations. For<br />
instance, in emergency related volunteerism, Crisiscommons.org provides a venue for digital<br />
participation <strong>and</strong> works to increase member interactions by organizing the ”Crisis camps”. On the<br />
other h<strong>and</strong>, web organizations, such as Jffixler.com <strong>and</strong> Rmhc.org, offer general purpose volunteering<br />
services to individuals. All of these services suffer from locality; they cannot reach all potential<br />
members. Although they have Facebook pages, users can only ”Like” them, <strong>and</strong> this Facebook page<br />
cannot read user profiles to reach users of relevant skill sets.<br />
Governments have seen the importance of collaborative networks, <strong>and</strong> funded projects for data<br />
sharing <strong>and</strong> processing. For example, in the Global <strong>Information</strong> Grid Project4, the US government is<br />
establishing an Internet based data processing, sharing <strong>and</strong> storage framework<br />
(www.nsa.gov/ia/programs/). To increase collaboration among companies, European Union has<br />
funded the <strong>Information</strong> <strong>and</strong> Communication Technologies programme in the Seventh Framework<br />
Programme (http://cordis.europa.eu/fp7/ict/). The programme includes studies such as ”Advanced<br />
legal issues in virtual enterprises” <strong>and</strong> ”European collaborative networked organizations leadership<br />
initiative”.<br />
In non-governmental organizations, Internet has seen rise of very successful collaborative networks<br />
like Wikipedia.org, where members share a common goal <strong>and</strong> have hierarchically structured roles in<br />
the collaboration process to create high quality content (Javanmardi <strong>and</strong> Lopes 2010). Indeed, some<br />
collaboration networks have produced products such as the Apache web server <strong>and</strong> the Linux<br />
operating system which paved the way to increase Internet usage by providing cheap/free end<br />
products.<br />
However, none of these existing technologies provide integration with real life social networks.<br />
Instead, they create the infrastructure to build proprietary social networks (Yang <strong>and</strong> Chen 2008). As<br />
a result, these real life solutions have not seen a meaningful increase in user participation (Matheson,<br />
Ruben <strong>and</strong> Ross 2009) despite advances in internet technologies.<br />
5. Characteristics <strong>and</strong> requirements of VHOs<br />
In this section, we will start with creation, <strong>and</strong> then proceed to explain following phases in life cycle of<br />
a VHO (Camarinha-Matos <strong>and</strong> Afsarmanesh 2008).<br />
5.1 Creation<br />
The life cycle of our target VHO starts after the social network begins its service. The organization is<br />
started by creating a central node on the social network. At least one administrator initially creates<br />
<strong>and</strong> manages the central node. On Facebook, this refers to creating an application which asks social<br />
network users to accept sharing their profile information <strong>and</strong> e-mail addresses with the application<br />
<strong>and</strong> allow the application to send them messages. Profile information includes current location,<br />
hometown location, work history, education history, gender <strong>and</strong> age. After getting Facebook<br />
permissions from the user, the application connects to user profile <strong>and</strong> reads profile data.<br />
In subsequent visits by the user, the Facebook application authenticates users through tools<br />
(www.developers.facebook.com/docs/reference/api/) provided by Facebook (API components), hence<br />
it does not need to store user names <strong>and</strong> passwords on its servers.<br />
Figure 1 (a) shows the social network state when the application page is first created. In this figure<br />
two fictional locations, A <strong>and</strong> B, are shaded to indicate users from these geographic locations, <strong>and</strong><br />
users that are similar in values are shown with letter V.<br />
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Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
(a) Social network at the time of central node<br />
creation<br />
(b) Created membership <strong>and</strong> user to user links<br />
Figure 1: Establishing organizational links on a social network<br />
The organization aims connecting to all users who share values of the organization. Furthermore, the<br />
organization increases inbreeding homophily by helping users connect to each other. Similarly, the<br />
organization works in advancing its values by gaining new users to the cause. Figure 1(b) shows the<br />
newly created membership <strong>and</strong> user to user links. In the ideal case, the organization can connect to<br />
all users who share its values <strong>and</strong> recruit new members for the cause.<br />
5.2 Operations <strong>and</strong> evolution<br />
As members are the main asset of a virtual organization, we will first discuss definitions <strong>and</strong><br />
evolutions of member roles.<br />
Member roles. A value homophily based virtual organization consists of regular members,<br />
administrative members that are chosen from members, <strong>and</strong> organization administrators. Organization<br />
administrators are paid workers or owners of an organization which wants to create a virtual<br />
organization on social networks. In creation of regular member roles, we define two major factors:<br />
location <strong>and</strong> user attributes. Depending on the count of members in locations, the organization can<br />
establish local groups for each geographic location.<br />
Differing from location, user attributes offer more semantic variety for group creation. For example,<br />
education history can be used to group users according to their education levels. Similarly, work<br />
history can be used to create groups of users who share the same profession, such as engineer,<br />
medical doctor or teacher.<br />
Each location <strong>and</strong> attribute group is governed by a selected member who acts as an administrator. In<br />
administrative member selection, a reputation score can be computed for each member <strong>and</strong> the most<br />
reputed member can be selected for administrative tasks. In this paper, we will not discuss this<br />
process. Instead, we refer the reader to a widely used reputation system in social networks (Sabater<br />
<strong>and</strong> Sierra 2002).<br />
In user to group relations, each user can be a member of multiple groups based on profile attributes,<br />
location or a combination of both. For example, members can be divided into groups based on their<br />
home countries, <strong>and</strong> each one of these groups can be further divided into attribute groups. For<br />
example, in this scenario, the organization can select German medical doctors.<br />
Interactions. Member interactions on a virtual organization (Ardichvili 2008) serves the purpose of<br />
increasing the inbreeding homophily. In simpler terms, it involves getting members together to create<br />
friendship links among them. For this purpose, the VHO provides an information pool to automatically<br />
share member generated content. On Facebook, this content includes links to articles, videos <strong>and</strong><br />
such. This content is received by the Facebook application from member profiles. Additionally, this pool<br />
can be used to publicize organization related information. For example, administrators can share a link<br />
to the latest budget proposal of the organization.<br />
Search. For timely deployment of human resources (Xu et al. 2008), filtering is used to locate groups of<br />
members <strong>and</strong> assign tasks to them under supervision of administrators. Through an organization<br />
policy, members can also be allowed to use attribute <strong>and</strong> location based filtering to locate other groups<br />
<strong>and</strong> members. However, in such a scenario user privacy should not be violated.<br />
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Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
Each member allows the organization to access profile information, yet the member should be able to<br />
restrict data access of specific members to the profile information. The organization should create a<br />
privacy settings interface to learn member decisions in data sharing. For example, a user can choose<br />
to hide hometown from other members.<br />
Metamorphosis or dissolution.The organization continues its life cycle until the social network is<br />
dissolved, <strong>and</strong> during this time period a member may lose interest in taking part to the organization.<br />
Unlike current day virtual organizations where memberships depend on active participation of a user,<br />
memberships to our organization starts with giving data access permissions <strong>and</strong> continues as long as<br />
these permissions are not revoked. As a result, our organization can include members who do not<br />
participate in any organizational activity. In sociology, decay functions have been used to determine<br />
life time of relation edges between individuals (Burt 2000). Adapting this terminology to our proposal,<br />
we explain the decay function with user inactivity as the VHO ages. When the decay value passes a<br />
critical point, the user is said to leave the organization, <strong>and</strong> the membership link is revoked.<br />
Migration services. All social networks are living organism <strong>and</strong> they will die or lose importance in<br />
future. This aging has been observed for once popular networks Usenet.com <strong>and</strong> Myspace.com, <strong>and</strong><br />
this may happens also to Facebook in the future. Therefore, the VHO should allow migration to the<br />
newest <strong>and</strong> most influential social networks while keeping user profiles. On the newly established<br />
social network, the organization should offer a seamless integration of old <strong>and</strong> new profiles. Email<br />
addresses can be used as an authentication anchor to link new profiles to the old ones.<br />
6. VHO application domains<br />
In this section, we will give example domains where an instance of a VHO can be used.<br />
Political parties. Political party supporters gather around a political view <strong>and</strong> share value homophily in<br />
this view. As the influence of a political view extends beyond geographic locations, connecting party<br />
supporters become vital to increase prominence of the political view in a society. This user interaction<br />
provides added value to organization. In another aspect, supporters are present in a political party to<br />
gain more benefits from country resources, which corresponds to added value to the user base. Thus,<br />
political organizations support both the goals of our proposal, <strong>and</strong> present an ideal domain to create<br />
virtual organizations.<br />
Voluntary organizations. In volunteering, the shared value is altruistic ideas. Although members are not<br />
present to maximize their gains like political party supporters, they nonetheless expect to meet others<br />
<strong>and</strong> feel useful in a society. Voluntary organizations, on the other h<strong>and</strong>, aim at reducing the cost of<br />
certain tasks by channelling available human capital to them. Such organizations have to keep profile<br />
data of volunteers, <strong>and</strong> deploy them whenever a need arises.<br />
Real life solutions approach this problem by creating web sites where a volunteer must subscribe to<br />
record profile information. In these solutions, when the user profile changes in future, the organization<br />
has no means to update recorded data without user participation. Our proposal alleviates all these<br />
problems by offering a real life link to members on social networks. For example, in the face of an<br />
earthquake, our proposal can filter members by their professions, <strong>and</strong> ask medical doctors to<br />
participate in relief efforts.<br />
Similarly, our proposal can be used for temporary organizational needs that have well defined time<br />
lines. For example, in an international games event, volunteers can be recruited on social networks,<br />
filtered by their profile attributes <strong>and</strong> directed to tasks that are most suitable to them.<br />
7. The commons application<br />
Having given possible application domains, we will now discuss our proof-of-concept virtual<br />
organization 3 on Facebook. Since it is a work in progress at the current stage it supports only a<br />
subset of the needed functionalities. We created our virtual organization to increase user interaction<br />
among Fulbright 4 scholars. Added value for the organization is to increase prominence of Fulbright<br />
programs. At the current stage, administrative member selection <strong>and</strong> grouping were not implemented,<br />
3 http://sight.dicom.uninsubria.it/home/flex/<br />
4 http://www.iie.org/fulbright<br />
25
Cuneyt Gurcan Akcora, Barbara Carminati <strong>and</strong> Elena Ferrari<br />
as the application has not been running long enough to acquire too many users. From the application,<br />
a view of member generated content is given in Figure 2(a).<br />
(a) Shared content<br />
(b) Filtering members<br />
Figure 2: Views from the application<br />
Filtering has been implemented in fine granularity by considering all Facebook profile items. Figure<br />
2(b) shows a search interface from the application.<br />
Privacy of user profile items can be adjusted by changing settings in the application. Figure 3 shows<br />
the privacy settings in our application. Please note that, the data presented in the figure is received<br />
from Facebook automatically, <strong>and</strong> it is not user entered. However, the user can add more data or<br />
remove some parts of it.<br />
Figure 3: Settings for profile privacy<br />
8. Conclusions<br />
In this paper we proposed a solution that can help virtual organizations to benefit from existing social<br />
networks functionalities. We gave requirements <strong>and</strong> characteristics of our solution, <strong>and</strong> presented a<br />
proof of concept Facebook application. In the future, we plan to observe how such a solution<br />
increases efficiency in management <strong>and</strong> maintenance of VHOs for different application domains.<br />
Moreover, we plan to extend the set of supported functions.<br />
26
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27
Benchmarking <strong>Information</strong> <strong>Management</strong> Practice <strong>and</strong><br />
Competence in Swedish Organizations<br />
Karen Anderson 1 , Göran Samuelsson 1 <strong>and</strong> Marie Morner Jansson 2<br />
1<br />
Mid Sweden University, Härnös<strong>and</strong>, Sweden<br />
2<br />
InfoGain, Stockholm, Sweden<br />
karen.<strong>and</strong>erson@miun.se<br />
göran.samuelsson@miun.se<br />
marie@infogain.se<br />
Abstract: As organizations transform towards e-service provision <strong>and</strong> operations sophisticated, organizationwide<br />
approaches to information management are required. However, there is reason to believe that few<br />
organizations have developed a fully holistic approach to thinking about developing <strong>and</strong> managing their<br />
information assets to ensure their current <strong>and</strong> future accessibility <strong>and</strong> usability. There is an increasing awareness<br />
of the need to design systems that ensure information is accessible <strong>and</strong> re-usable, yet vital information often<br />
becomes increasingly inaccessible over time, to the disadvantage of business intelligence, business needs,<br />
customer service <strong>and</strong> regulatory requirements. An extensive survey of the state of the art of information<br />
management within Swedish organizations was undertaken to gain an underst<strong>and</strong>ing of current approaches,<br />
what competence is currently available within organizations <strong>and</strong> what competencies are perceived to be lacking<br />
or need development to ensure sustainable management of information as a business asset. This paper presents<br />
insights into how well or poorly records managers’ <strong>and</strong> archivists’ expertise is incorporated into whole-oforganization<br />
strategic planning for information management. It was rare to find collaboration between enterprise<br />
information architects <strong>and</strong> IT professionals with the recordkeeping professionals, who have expertise in<br />
structuring information <strong>and</strong> metadata as well as system requirements that contribute to ensuring long-term<br />
preservation, which would potentially minimize the proliferation of legacy systems from which records <strong>and</strong><br />
information are very costly or impossible to migrate or extract. Many archivists considered that it is not their role<br />
to participate in wider information management strategies, preferring to focus on the capture of records into an ’earchive’<br />
without recognizing that information in the archive is a potentially re-usable business asset. This initial<br />
research contributes to an underst<strong>and</strong>ing of information cultures within organizations. It is intended to be used as<br />
a benchmark: follow-up studies are planned at regular intervals in the future to measure change in practice,<br />
attitudes <strong>and</strong> professional alliances to improve information management.<br />
Keywords: information management; recordkeeping competencies; e-service transformation; long term<br />
preservation; sustainable information management<br />
1. Introduction <strong>and</strong> background<br />
As organizations transform towards e-service provision <strong>and</strong> operations sophisticated, organizationwide<br />
approaches to information management (IM) are required. There is, however, reason to believe<br />
that few organizations have developed a fully holistic approach in their thinking about developing <strong>and</strong><br />
managing their information assets to ensure current <strong>and</strong> future accessibility <strong>and</strong> usability. In a 2010<br />
survey conducted by Lundell <strong>and</strong> Lings, 40% of all 290 Swedish municipalities could not produce<br />
council minutes from 1999, often because they were dependent on old proprietary software <strong>and</strong><br />
systems that had been phased out. They conclude that "After only ten years there are problems with<br />
accessing or reading files that are known to exist", (Lundell & Lings, 2010). Of equal concern are the<br />
findings of a survey of national government authorities conducted by the Swedish National Archives in<br />
2010 on the current status of their electronic recordkeeping which achieved a 97% response rate. All<br />
had electronic documents, but 64% revealed they had no strategies for long-term preservation. 22%<br />
were working on a strategy (Riksarkivet, 2010, pp.6,8,17). A 2009 case study of electronic document<br />
management in a large Swedish railway project revealed there were inadequate preservation<br />
strategies for many vital records necessary for future railway maintenance (Borglund & Anderson,<br />
2010a; 2010b). McDonald, McCulloch <strong>and</strong> McDonald (2010) found little evidence of existing work<br />
<strong>using</strong> IM to further the Green ICT agenda in their JISC-commissioned report from the University of<br />
Strathclyde. Their findings were based on a literature survey <strong>and</strong> four case studies in the United<br />
Kingdom. The AC+erm (Accelerating +positive Change in ERM) Project at the University of<br />
Northumbria focused on 3 aspects of electronic records management: people, working practices <strong>and</strong><br />
technology. AC+erm undertook an extensive literature survey, conducted case studies <strong>and</strong> used<br />
electronic Delphi studies <strong>and</strong> face-to-face colloquia. The Delphi studies are particularly noteworthy, in<br />
that they allowed harvesting of expert opinion unlimited by geography <strong>and</strong> inclusive of academics <strong>and</strong><br />
practitioners alike, thus extending the reach <strong>and</strong> reducing the limitations of the research. Their data<br />
provides the largest set of evidence available on ERM systems, particularly on the interrelationships<br />
28
Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
between people, process <strong>and</strong> technology (McLeod, Childs & Hardiman, 2010). The evaluation<br />
process noted that: ”The AC+erm research project has been valuable in that ... it didn't focus unduly<br />
on one dimension of the infrastructure (e.g. technology) over the other” McLeod et al, 2010, p.16).<br />
IM <strong>and</strong> the technologies that support it are in a state of extremely rapid change. Tools <strong>and</strong> practices<br />
that were useful 3-5 years ago are now obsolete or need updating to keep pace with new<br />
technologies <strong>and</strong> changing service requirements. More importantly, strategies must be in place to<br />
ensure the information in the systems remains accessible <strong>and</strong> usable. Success will involve<br />
collaboration by information professionals who manage both information content <strong>and</strong> information<br />
technologies, as shown by the AC+erm Project. However, there has been no research into the<br />
information management environment in Sweden as wide-ranging <strong>and</strong> comprehensive as the<br />
AC+erm Project, Their work inspired this IM Benchmarking Project, which was however, much more<br />
limited in what could be achieved given time <strong>and</strong> funding constraints.<br />
1.1 Research aims <strong>and</strong> definitions<br />
The research aimed to gain a snapshot of the current state of IM in Swedish organizations:<br />
governmental agencies; municipalities; regions/country councils <strong>and</strong> some companies. We also<br />
wanted insights into the future need for IM skills <strong>and</strong> techniques in organizations. This paper reports<br />
on a survey of current IM practices in Swedish organizations, undertaken as the first in a planned<br />
series to benchmark change in IM practice.<br />
An<strong>and</strong>, Manz & Glick note that ”Scholars traditionally define information management as the process<br />
by which relevant information is provided to decision makers in a timely manner”. They also point out<br />
that IM is increasingly equated with the management of information technology (IT) <strong>and</strong> put forward<br />
an argument that this needs to be complemented by organizational memory processes. Their premise<br />
was that organizational memory is ”a convenient metaphor that can be used to define the information<br />
<strong>and</strong> knowledge known by the organization <strong>and</strong> the processes by which such information is acquired,<br />
stored, <strong>and</strong> retrieved by organizational members” (1998. p.796). Middleton defines IM as<br />
”Procedures, which may be technical, analytical or strategic, for optimising the use of information”<br />
(2002, p.481). In comparing IM <strong>and</strong> knowledge management (KM), Bouthillier <strong>and</strong> Shearer (2002)<br />
state that ”The ultimate goal of IM is to ensure that information is stored <strong>and</strong> retrievable, while the<br />
ultimate purpose of KM is tied more closely to organization outcomes”. They also quote Place <strong>and</strong><br />
Hyslop (1982) who state that IM focuses on the "plans <strong>and</strong> activities that need to be performed to<br />
control an organization’s records". The <strong>Knowledge</strong> Council of the United Kingdom defines IM as: ”the<br />
processes by which we create, capture <strong>and</strong> use information” (2008, p.10). When we use the term<br />
“information management”, we define it equally comprehensively, including organization-wide<br />
strategies <strong>and</strong> processes to ensure creation, capture, management <strong>and</strong> use of information. Thus we<br />
include enterprise content management, business process management <strong>and</strong> records management,<br />
covering the management over time of information regardless of media (records, documents, data,<br />
email, web, video, photos <strong>and</strong> other information carrying media).<br />
In line with An<strong>and</strong> et al’s concern that the IM focus on IT should be complemented by what they call<br />
organizational memory processes, the survey also sought to gain an underst<strong>and</strong>ing of the status <strong>and</strong><br />
use of archivists’ expertise in capturing, managing, describing <strong>and</strong> preserving records, which are<br />
formally defined as “information created, received, <strong>and</strong> maintained as evidence <strong>and</strong> information by an<br />
organization or person, in pursuance of legal obligations or in the transaction of business” (ISO 15489-1,<br />
s.3.15). In Sweden, however, legislation <strong>and</strong> practice focuses on the concept of a public document, defined<br />
as follows:<br />
A document is public if it is held by a public authority <strong>and</strong> is considered in the light of<br />
certain special rules to have been officially received or drawn up by that authority. The<br />
document may be an ordinary document on paper, but it can equally well consist of<br />
information that can be read, listened to or taken in in some other way <strong>using</strong> technical<br />
aids (Regeringskansliet, 2010).<br />
2. Research methods<br />
Key personnel such as business managers, archivists <strong>and</strong> IT managers were surveyed between<br />
November 2010 <strong>and</strong> February 2011 in Sweden about the current use of IM in their organizations <strong>and</strong><br />
plans for development. Methods for gathering data included a web survey sent to approximately 250<br />
governmental agencies, all 290 municipalities, all 20 regional <strong>and</strong> country councils, as well as some<br />
29
Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
companies. The survey achieved a 47% response rate. The web survey tool used was Netigate,<br />
which provided a summary <strong>and</strong> graphic representation of all responses.<br />
Selected archivists <strong>and</strong> senior managers were interviewed to gain deeper underst<strong>and</strong>ings of issues<br />
<strong>and</strong> challenges identified from the survey responses. Archivists were an important target group for the<br />
interviews partly because the benchmark originated in Archives <strong>and</strong> <strong>Information</strong> Science research<br />
<strong>and</strong> partly because this profession views information conceptually over time. Other professions<br />
working with aspects of IM were: enterprise architects, information architects, a CIO <strong>and</strong> a business<br />
process developer, lawyers, product documentation managers, IT-researchers <strong>and</strong> an environmental<br />
manager. The interviewees then recommended additional participants. An interview guide was used<br />
as a starting point, but the interviews were conducted as a conversation, between 1.5–2 hours <strong>and</strong><br />
sometimes longer.<br />
3. Research findings<br />
3.1 Key findings from the survey<br />
The web-based questionnaire was targeted at the person in the organization who has the best overall<br />
view of IM. The respondents were divided as follows: archivists 38%; IT managers / IT strategists /<br />
information architects 22%; business process managers / developers 8%; registrars (operational<br />
records managers) 2% <strong>and</strong> some other role 31%. Many responding organizations had difficulty in<br />
identifying one person or position who could answer the questionnaire. There were some instances of<br />
people from different professions <strong>and</strong> competence groups collaborating to answer the questionnaire.<br />
An interesting observation is that there appeared to be some confusion around the concept of<br />
“information” <strong>and</strong> who is responsible for its management in contemporary Swedish organizations.<br />
There was no clear ‘ownership’ of IM, which is a matter for concern given the importance of<br />
information governance for effective functioning of an organization. Responding organizations were:<br />
82 municipalities, 79 government departments, 6 county councils <strong>and</strong> 3 companies.<br />
3.1.1 <strong>Information</strong> use <strong>and</strong> users<br />
The Swedish principle of citizens’ access to public documents gives anyone access to the records at<br />
governmental <strong>and</strong> local authorities as soon as records are created or received, without any need to<br />
justify their request. This is a fundamental cornerstone in the Swedish democracy. Nevertheless many<br />
business leaders, foc<strong>using</strong> on cost cutting, are challenging this principle by asking for clarification of<br />
purpose, particularly for long-term digital preservation but also considering secondary use of<br />
information that may benefit other organizations. The PSI-directive (European Commission) which is<br />
the European Union requirement that information created by public service organizations is freely<br />
available for re-use by other organizations <strong>and</strong> businesses, requires making a wider range of<br />
information available for re-use <strong>and</strong> re-purposing than that which is traditionally managed by<br />
archivists under the definition of a public document given above.<br />
We asked about users of the records <strong>and</strong> archives. 47% of use was by internal employees. The rest<br />
was divided between different groups of external users like partners 13%; other organizations 14 %;<br />
researchers 24%; <strong>and</strong> also the media 18%. Respondents reported a slight increase in external<br />
dem<strong>and</strong> recently. However, there is very little movement towards implementing strategies for<br />
increasing the use <strong>and</strong> use benefits of records. 42% answered a clear no, not at all. 12% reported<br />
action being taken to increase interest in information reuse. One respondent from this last group said:<br />
“we welcome it <strong>and</strong> are adapting to the increasing dem<strong>and</strong>”. There were many PR <strong>and</strong><br />
Communication officers with a special interest in communicating externally amongst respondents.<br />
3.1.2 Organization-wide regulatory frameworks for IM<br />
In response to questions about an organization-wide regulatory framework for managing documents<br />
<strong>and</strong> information over time, 41% of respondents stated they have an updated framework considering<br />
information regardless of media over time, 22% have a partial framework <strong>and</strong> 30% are in the process<br />
of developing such a framework. At first glance it appears that many organizations are on track, but<br />
upon closer inspection, there seems to be a lack of an overall vision <strong>and</strong> strategy founded in the new<br />
digital <strong>and</strong> social media environment. Only 22% have comprehensive regulations for the use of social<br />
media. 58% are either in the process of developing a framework for the use of social media or have<br />
partially dealt with this issue. A full 36% have no framework for this increasingly important information<br />
strategy. Barely 1/3 has a clear vision <strong>and</strong> purpose for their IT management with a strategy that<br />
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Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
equally values information along with the technology to manage it. Frameworks are consequently<br />
founded in poor visions <strong>and</strong> strategies even if they are based on legal requirements <strong>and</strong> regulations.<br />
New information behaviours among people as a consequence of new information services based on<br />
new technology is putting pressure on organizations’ IM strategies <strong>and</strong> practices. The information<br />
framework in public organizations is based on legal regulations. Governance models based on<br />
business purposes considering requirements for the entire IM area seem to be unusual.<br />
3.1.3 Implementation of international st<strong>and</strong>ards for records management<br />
The international st<strong>and</strong>ards for recordkeeping (ISO 15489, ISO 23081, ISO 26122) are not well<br />
known <strong>and</strong> not well used in Sweden. Of these three, ISO15489 is more widely known <strong>and</strong> used than<br />
the other two. In contrast, the Open Archival <strong>Information</strong> System Reference Model (ISO 14721) is<br />
used more widely. It is interesting to note that those who do use these st<strong>and</strong>ards are pleased with<br />
them. The organizations surveyed claimed to comply with National Archives’ <strong>and</strong> other governmental<br />
regulations. However, when asked whether they presented their electronic documents according to<br />
the National Archives required descriptive st<strong>and</strong>ards in the National Archives’ survey, 33% answered<br />
’no’ <strong>and</strong> 37% ’to some extent’ (Riksarkivet, 2010, p.28).<br />
3.1.4 Implementation of e-archives for long-term preservation<br />
The extent of implementation of e-archives for long-term preservation is increasing rapidly. It must be<br />
noted that an e-archive, where the purpose is to preserve records in context for use by future<br />
generations is not the same as everyday digital storage. Much higher st<strong>and</strong>ards for security,<br />
prevention of loss of data quality <strong>and</strong> ability to re-present the information to quality st<strong>and</strong>ards that<br />
meet evidential requirements are required. 19% of responding organizations have already<br />
implemented an e-archive; 15% have partial implementation <strong>and</strong> as many as 32% are in progress<br />
towards implementation. 31% have not begun. Among those who have not started any pre-study are<br />
many minor municipalities but also some quite large organizations. These figures cover a wider range<br />
of organizations than the 2010 study by the Swedish National Archives study which was confined to<br />
government authorities alone, where 64% admitted they did not have a long-term preservation<br />
strategy <strong>and</strong> 22% said they were working on one. A similar situation has been found in a study of two<br />
Swedish municipalities, one small (25,000 citizens) <strong>and</strong> one medium-sized (100,000 citizens) where<br />
neither have implemented a digital archival repository (Svärd, 2011 forthcoming).<br />
There seems to be two clear trends: one where the e-archive is intended only for long-term<br />
preservation <strong>and</strong> is separated from current business systems. The other trend is to integrate the earchive<br />
into the business systems <strong>and</strong> use it like an information hub, as in the case of Stockholm City.<br />
The reason for choosing one direction or the other depends on the degree of IT-maturity, what role is<br />
intended for the e-archive function <strong>and</strong> the size of the business. Some organizations are already in<br />
the second or third generation of their e-archive. Implementing an e-archive appears to promote IM<br />
maturity, because the long term perspective requires participation <strong>and</strong> planning by information owners<br />
<strong>and</strong> professionals across the entire organization.<br />
Few are considering <strong>using</strong> cloud services for either e-archive or document management. Only 12%<br />
actually use cloud services for document management <strong>and</strong> 7% have considered long-term storage<br />
issues when <strong>using</strong> cloud services. 56% give a clear ‘no’ to use of cloud services for document<br />
management, mainly for legal reasons, but there is also a general insecurity in an unknown <strong>and</strong><br />
uncertain environment <strong>and</strong> fear of losing the control. However many organizations already use cloud<br />
services to some extent without control or advice from the recordkeeping function. Probably 95%-98%<br />
of information <strong>and</strong> records will never pass into an e-archive, since not all information can be defined<br />
as records, <strong>and</strong> not all records are of enduring value <strong>and</strong> thus not destined to be kept forever. It is<br />
failure to manage this very large proportion of non-archival information that constitutes a big loss of<br />
knowledge <strong>and</strong> hence money due to lack of reuse of information.<br />
3.1.5 Sustainable information management<br />
It could be expected that “sustainable information management” should be perceived as natural to the<br />
field given that the broad concept of IM aims for a holistic view of information use over time <strong>and</strong> that<br />
must require sustainability. There is a growing global interest in a broad interpretation of sustainable<br />
development embracing environmental, social <strong>and</strong> economic perspectives in society (Williams &<br />
Millington, 2004). Associated with this is interest in green IT (Chen & Boudreau, 2004), with a view to<br />
decreasing the negative carbon footprint of organizations <strong>and</strong> their business activities. Green IT is not<br />
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Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
clearly defined from an environmental point of view yet but a lot of organizations are thinking <strong>and</strong><br />
acting towards greener IT <strong>and</strong> considering how to decrease their negative impact by a more<br />
sustainable business.<br />
Many organizations have someone in charge of sustainable development <strong>and</strong> environmental topics,<br />
often allied with the quality manager or a similar position. This means that they are especially familiar<br />
with both documentation st<strong>and</strong>ards (for example the ISO 9000 Quality <strong>Management</strong> Systems, ISO<br />
14000 Environmental <strong>Management</strong> <strong>and</strong> ISO 26000 Guidance on Social Responsibility series of<br />
st<strong>and</strong>ards) <strong>and</strong> management systems. Nevertheless, the survey found there was little action or<br />
awareness of sustainability issues in the field of IM. In many organizations there are only two groups<br />
of officers with a long-term view of the business from a social perspective: those who work with<br />
Corporate Social Responsibility (CSR) <strong>and</strong> archivists, but the survey found that they do not cooperate<br />
at all. We found that the concept “Sustainable <strong>Information</strong> <strong>Management</strong>” is neither currently<br />
consciously considered nor adopted.<br />
3.1.6 The challenges faced by information managers<br />
Respondents were presented with a list of 10 challenges to sound IM <strong>and</strong> governance <strong>and</strong> asked to<br />
select those they saw as the greatest challenges. They could select more than one. The list included:<br />
legacy systems; improving service levels; compliance with regulations; compliance with international<br />
st<strong>and</strong>ards; development of user-friendly tools; information security when collaborating with other<br />
organizations; personal data protection; silo-organized systems; secure long-term preservation;<br />
economy; technology; competence; <strong>and</strong> resources. 54% chose long-term preservation as the greatest<br />
challenge. 47% selected lack of resources; 44% selected information security <strong>and</strong> 41% saw personal<br />
data protection as being among the greatest challenges.<br />
3.2 Interviews<br />
32 deep interviews were conducted across Sweden in different types of organizations. Those who<br />
consented to be interviewed presented as strongly committed to their professional concern with IM.<br />
They have admirably clear views of purposes <strong>and</strong> methods <strong>and</strong> take pride in their professions. A<br />
significant proportion belong to a community of practice that shares the same values <strong>and</strong> learns from<br />
each other’s experiences of methods <strong>and</strong> models. This kind of dedication seemed to hold true<br />
amongst all information oriented professions. The interviews embraced archivists of different<br />
categories, information <strong>and</strong> IT architects, IT-strategists <strong>and</strong> also environmental <strong>and</strong> quality oriented<br />
positions.<br />
3.2.1 Professional specialization of archivists<br />
Two professional groups of archivists are emerging: those for whom the focus is the archive <strong>and</strong><br />
securing cultural heritage over the long term; <strong>and</strong> archivists who are IT-oriented, foc<strong>using</strong> on systems<br />
for current recordkeeping, sometimes uninterested in cultural heritage. However there are still many<br />
working across both these aspects of the profession. Unfortunately, some find it easier to focus on<br />
known operational tasks since often there is a backlog in physical management of paper records, at<br />
the expense of working in a more IT-oriented manner. Although this signals a lack of resources,<br />
claiming the need to comply with archival law <strong>and</strong> regulations is not sufficient motivation for<br />
management to commit resources if the organization can’t see any value for its own IM benefit.<br />
3.2.2 Collaboration between information architects <strong>and</strong> archivists<br />
There are two main areas in which archivists are involved in IT-oriented issues <strong>and</strong> cooperating with<br />
IT professionals: one is in planning <strong>and</strong> developing an e-archive <strong>and</strong> the other is where business<br />
processes are being closed down. Archivists contribute with professional expertise in appraisal, or<br />
deciding what to keep. They don’t seem to engage in issues such as reconstruction of information<br />
structures, business rules <strong>and</strong> ownership of business processes, or what information architects call<br />
“information archeology”, yet these are fundamental to capturing <strong>and</strong> maintaining the context of the<br />
information, which is the principal focus of records <strong>and</strong> archives management. There is a lack of<br />
competence in planning for migration from legacy systems <strong>and</strong> consequently huge costs for<br />
maintenance of old information systems. Archivists often have a more extensive view of information<br />
use over time than other professions <strong>and</strong> also have the professional competence to significantly<br />
contribute to planning for prevention of future unmanageable legacy systems from which migration or<br />
extraction of essential records <strong>and</strong> information is very costly or impossible. Many archivists<br />
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Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
considered that it is not their role to participate in wider IM strategies, preferring to focus on the<br />
capture of records into an ’e-archive’ without recognizing that the information in the archive is a<br />
potentially re-usable business asset.<br />
3.2.3 Competencies<br />
The interviews confirmed that the knowledge <strong>and</strong> competencies needed were in fact extension <strong>and</strong><br />
deepening of that which already existed in the organization: a need for professional development.<br />
Some archivists wanted to improve their IT competence in order to improve their ability to<br />
communicate with IT professionals. Non-archivists commented that archivists need to be more<br />
proactive in facilitating accessibility of information. In one of the focus groups, information architects<br />
from large government departments noted the following competence deficits as being among the<br />
greatest challenges:<br />
Lack of relevant competence to create information <strong>and</strong> concept models in order to secure the<br />
quality in the information structures;<br />
Lack of relevant competence for work with Enterprise Business <strong>Information</strong> modeling;<br />
Lack of alignment among different competencies <strong>and</strong> roles within the IM area leaves both gaps in<br />
needed competencies <strong>and</strong> deficits in competency levels.<br />
4. Discussion<br />
The lack of ‘ownership’ of IM as a function found in this study is a matter of concern. The ISO 15489<br />
st<strong>and</strong>ard requires that “Records management responsibilities <strong>and</strong> authorities should be defined <strong>and</strong><br />
assigned, <strong>and</strong> promulgated throughout the organization so that, where a specific need to create <strong>and</strong><br />
capture records is identified, it should be clear who is responsible for taking the necessary action. …<br />
Specific leadership responsibility <strong>and</strong> accountability for records management should be assigned to a<br />
person with appropriate authority within the organization” (ISO 15489.1-2001 s6,3). Similarly, the<br />
AC+erm Project (Accelerating +positive Change in ERM) found that few organisations in their study<br />
had articulated a vision for electronic records management. (McLeod, Childs & Hardiman, 2010, p.ii).<br />
The survey findings about patterns of users of records are comparable with the findings of Sundqvist<br />
(2009, chapter 8). Her in-depth study of archival use <strong>and</strong> users in a municipality <strong>and</strong> a government<br />
organization also found that internal users were the principal user group, while external users<br />
included individuals seeking personal information in the records, or to support private business such<br />
as information about property; business users such as estate agents <strong>and</strong> the media pursuing matters<br />
of public interest. Professional researchers, including historians, were a very small minority among<br />
users. There seems to have been little change in use patterns of public information in recent years.<br />
There are many reasons why long-term digital preservation is perceived as the greatest challenge. A<br />
significant reason is that many are still attached to the familiar paper-based world. In Svärd’s study<br />
(2011 forthcoming) a respondent in one municipality admitted “a lot of paper preservation [is] still<br />
taking place”. Others believed that the complexity of managing information over time was not fully<br />
understood <strong>and</strong> that their municipality was not fully utilizing the knowledge <strong>and</strong> skills of the archivist. It<br />
is essential to meet this challenge, however daunting, to avoid digital amnesia. There are real<br />
concerns that both evidential business records <strong>and</strong> cultural heritage are being compromised. There is<br />
already a huge loss of information through lack of maintenance or obsolescent proprietary software,<br />
or that is no longer usable because of lack of structure, or it is inaccessible: the key to access has<br />
vanished (Lundell & Lings, 2011; Anderson & Borglund (2010a; 2010b). There is both structured <strong>and</strong><br />
unstructured information stored in personal computers, corporate databases <strong>and</strong> other shared<br />
workspaces that are currently outside the control of recordkeeping systems <strong>and</strong> remain outside the<br />
archive, although databases <strong>and</strong> business systems do contain evidential business records. A new<br />
ISO st<strong>and</strong>ard for managing such systems is ISO 16175.3-2010, Principles <strong>and</strong> Functional<br />
Requirements for Records in Electronic Business Environments. Given the low uptake of international<br />
information <strong>and</strong> records management st<strong>and</strong>ards in Sweden found in this survey it may be some time<br />
before organizations turn to the st<strong>and</strong>ard for assistance.<br />
As a consequence of the Swedish archival focus on public ‘documents’, information in databases <strong>and</strong><br />
specialized business systems such as finance <strong>and</strong> personnel systems is usually considered to be<br />
outside the ambit of the archive, but a recent Preliminary Study on an e-Archive <strong>and</strong> e-Registration<br />
System by the Swedish National Archives (Riksarkivet, 2011a) signals the possibility of change. One<br />
33
Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
of the Swedish eGovernment Delegation’s aims is to motivate public agencies to reach level four on<br />
Layne <strong>and</strong> Lee’s (2001) e-government maturity model, that is, full integration of interaction between<br />
agencies <strong>and</strong> citizens, although the model does not incorporate any recordkeeping requirements in its<br />
maturity benchmarks (Anderson, Borglund & Samuelsson, 2011 forthcoming). It is clear these kinds of<br />
e-services are so complex that late intervention by archivists will not be adequate for needed<br />
recordkeeping support <strong>and</strong> long-term preservation. Guidance on archival preservation of integrated eservices<br />
is essential. The Preliminary Study proposes that the National Archives’ role in government<br />
IM be reviewed <strong>and</strong> its m<strong>and</strong>ate extended, thus widening its focus beyond preservation of documents<br />
alone. (Riksarkivet, 2011b).<br />
The AC+erm Project found that “people issues are predominant, fundamental <strong>and</strong> challenging as they<br />
concern culture, philosophical attitudes, awareness of RM <strong>and</strong> ERM issues, preferences, knowledge<br />
<strong>and</strong> skills”. They also noted that ”records professionals may be part of the problem as well as part of<br />
the solution, e.g. they take the holistic view <strong>and</strong> have the principles <strong>and</strong> tools to manage records but<br />
their dem<strong>and</strong>s may be unrealistic or too constraining” (McLeod, Childs & Hardiman, 2010, p.ii). There<br />
are similarities in our findings. One interviewee commented that archivists need to be more outgoing<br />
within the organization, yet the small focus group of archivists were of the opinion that it was not their<br />
place to work outside the archive. Others in individual interviews were keen to collaborate better with<br />
their IT colleagues. Alternately, the information architects’ focus group questioned whether it was the<br />
archivists’ place to develop a business process based description of the organization, as now required<br />
for archival description by the Swedish National Archives. St<strong>and</strong>ards, regulations, legal frameworks,<br />
business process development <strong>and</strong> systems development headed the list of needed professional<br />
development,<br />
5. Conclusions <strong>and</strong> recommendations for further research<br />
In this research project we aimed to gain:<br />
A snapshot of the current state of IM in Swedish organizations;<br />
Insights into the future need for IM skills in Swedish organizations;<br />
An underst<strong>and</strong>ing of the use of archivists’ expertise.<br />
These aims were achieved, revealing the following key findings.<br />
5.1 The current state of IM in Swedish organizations<br />
The project found that:<br />
90% of the organizations surveyed had updated or are working with their IM frameworks, so there<br />
is a lot of activity, despite a lack of assigned responsibility or clear ‘ownership’ of IM;<br />
There is a lot of interest in developing organizational e-archive repositories <strong>and</strong> growing activity in<br />
this area, although many organizations lack the IM maturity or resources to take on this urgent<br />
challenge;<br />
A very low number of organizations were <strong>using</strong> available records <strong>and</strong> IM st<strong>and</strong>ards. This failure<br />
means they lack an internationally accepted norm for evaluating their performance.<br />
The following were seen as the greatest challenges:<br />
Long-term preservation (54%)<br />
Lack of resources (47%)<br />
<strong>Information</strong> security (41%)<br />
Personal data protection (41%).<br />
The PSI directive does not so far appear to have changed user groups seeking. Nor do public<br />
organizations <strong>and</strong> municipalities appear to be actively preparing their information for re-use or repurposing,<br />
either for internal business benefit or external users. The regulation-driven focus on<br />
providing access to ‘documents’ rather than information that is gathered <strong>and</strong> presented in other<br />
formats, such as in databases, data sets <strong>and</strong> so on, must be overcome <strong>and</strong> extended if Swedish<br />
organizations are to function <strong>and</strong> progress effectively. The Swedish National Archives’ bid for an<br />
extended m<strong>and</strong>ate (Riksarkivet, 2011b) would provide leadership in IM <strong>and</strong> apply the professional<br />
competence of archivists to the challenges of long-term IM.<br />
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Karen Anderson, Göran Samuelsson <strong>and</strong> Marie Morner Jansson<br />
5.2 Future needs for IM skills in Swedish organizations<br />
Greater competence in enterprise-wide information modeling <strong>and</strong> development of strategies for<br />
ensuring quality in information structures was identified as needed. IM competencies were also<br />
missing, or existing competencies needed updating or extending. Some archivists expressed a need<br />
for more knowledge <strong>and</strong> skills in the IT arena to enable them to better underst<strong>and</strong> <strong>and</strong> participate in<br />
digital IM. The following were seen as most needed areas for professional development: st<strong>and</strong>ards,<br />
regulations, legal frameworks, business process development <strong>and</strong> systems development.<br />
5.3 Underst<strong>and</strong>ing <strong>and</strong> use of archivists’ expertise<br />
People issues are very complex, <strong>and</strong> among the most important for success of projects <strong>and</strong> change in<br />
organizations. We found that there was a lack of underst<strong>and</strong>ing of the complexity of managing<br />
information over the long-term, often because the focus was on IT solutions <strong>and</strong> under-<strong>using</strong> the<br />
professional knowledge of the archivist. We also found that the archivists themselves could be part of<br />
this problem, as they are perceived not to be sufficiently outgoing in the organization, <strong>and</strong> a small<br />
group of archivists expressed the opinion that it was not their role to do so.<br />
5.4 Possibilities for further research<br />
Most organizations claim compliance with existing national archival regulations <strong>and</strong> there is some<br />
complacency that what must be done is being done. There is, however, evidence that organizations<br />
are not infrequently unable to provide access to digital documents <strong>and</strong> information because there is a<br />
failure to plan for migration <strong>and</strong> continuity of IT systems, dependence on proprietary software <strong>and</strong><br />
systems (Lundell & Lings, 2011). The gap between legislative requirements <strong>and</strong> organizations’ ability<br />
to fulfill their obligations to provide access would repay further research to gain an underst<strong>and</strong>ing of<br />
the nature, the source <strong>and</strong> the extent of the problem. One such study foc<strong>using</strong> on local government<br />
has been carried out in the United Kingdom revealing municipalities’ ability to provide requested<br />
information under Freedom of <strong>Information</strong> legislation varies widely <strong>and</strong> in some cases is quite poor.<br />
(Shepherd, Flinn & Stevenson, 2008; 2009; 2011a forthcoming; 2011b forthcoming). A comparative<br />
study would deepen <strong>and</strong> extend the work done by this study <strong>and</strong> by Lundell <strong>and</strong> Lings (2010).<br />
This study is intended as benchmark: a series of follow-up studies are planned for regular intervals in<br />
the future to measure change in practice, attitudes <strong>and</strong> professional alliances to improve IM. It will be<br />
interesting to follow developments in the regulatory l<strong>and</strong>scape <strong>and</strong> responses to IM challenges as the<br />
government aims to meet the needs of organizations working in the e-government environment.<br />
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36
Developing a Model for Assessing IT Competency of<br />
Managers<br />
Mohammad Abooyee Ardakan 1 , Hamed Majidi Zolbanin 2 <strong>and</strong> Ali Khaleghi 3<br />
1, 2<br />
University of Tehran, Tehran, Iran<br />
3<br />
University of Grenoble, Grenoble, France<br />
Abooyee@ut.ac.ir<br />
hmajidiz@ut.ac.ir<br />
Ali.Khaleghi@upmf-grenoble.fr<br />
Abstract: In today's rapidly changing environment, increased focus on customer <strong>and</strong> quick response to problems<br />
<strong>and</strong> opportunities has made the manager a vital resource in guiding <strong>and</strong> directing employees to success. So,<br />
within an organizational context, it appears crucial to develop competent managers who can be relied on to<br />
transform their organizations accordingly. In this regard, the competency approach marks a new development<br />
<strong>and</strong> the importance given to competencies in the organizational context is continually increasing. ith the<br />
widespread use of information technology (IT) in recent decades, management scholars began to examine its<br />
implications on organizations <strong>and</strong> management. Several of the researchers in this field focused on the<br />
identification of managerial IT competencies. In this paper, we want to explore those skills that managers, in the<br />
new world of information <strong>and</strong> communication technologies, must possess in order to cope with the difficulties of<br />
their roles.<br />
Keywords: competency, IT competency, management competencies, competency assessment<br />
1. Introduction<br />
With the advent of information technology (IT) in 1980s <strong>and</strong> its widespread use in businesses,<br />
especially in 1990s, the concept of business has dramatically changed. The extent of these<br />
transformations has been so huge that no company can overlook including IT in its business strategy.<br />
However, this context is of no exception in that the rate of its developments, like other technologyintensive<br />
areas, is much faster than organizations’ adaptability to such changes. As a result, in many<br />
organizations IT has often failed to meet its full potential (Stuart et al. 2009).<br />
Part of this failure in exploiting the full range of IT capabilities is rooted in the paucity of organizations’<br />
top management support. Researchers <strong>and</strong> institutions have noted lack of executive support as one<br />
of the main difficulties in managing IT projects (Jenster <strong>and</strong> Hussy 2005). Unfamiliarity with IT <strong>and</strong> a<br />
shallow insight into its role in today’s businesses – if not the most important- is one of the important<br />
reasons of top managers’ negligence to this technology. The more knowledgeable managers become<br />
about IT, the more they will champion it within their enterprise (Bassellier et al. 2003).<br />
Moreover, leadership behaviors of senior management play an important role in determining the<br />
success or failure of an IT implementation (Neufeld et al. 2007). Hence, for any organization to benefit<br />
from the various <strong>and</strong> vast capabilities of IT, it is a necessity to enhance IT competency of its business<br />
managers (Bassellier et al. 2003).<br />
The goal of this paper is to develop a model to assess the IT competency of business managers. It<br />
will guide us through whether or not to add new dimensions to the Bassellier’s model (Figure 2) for IT<br />
competency of managers. This dimension(s) mainly addresses the less stressed skill of IT managers<br />
in having a conceptual view on their working environment.<br />
2. The concept of competency<br />
The term competency has no widely accepted single definition (Strebler et al. 1997; Jubb <strong>and</strong><br />
Rowbotham 1997). Researchers <strong>and</strong> scholars have evolved several meanings for the term which are<br />
mainly adapted to their own fields. The term was first introduced to the field of management through<br />
the work of Boyatzis (1982). He defined a competency as:<br />
Characteristics that are causally related to effective <strong>and</strong> / or superior performance in a<br />
job. This means that there is evidence that indicates that possession of the<br />
characteristics precedes <strong>and</strong> leads to effective <strong>and</strong> / or superior performance on the job<br />
(Thompson et al. 1996).<br />
37
Mohammad Abooyee Ardakan et al.<br />
Many authors have explored the concept <strong>and</strong> seemingly, three main positions have been taken<br />
toward a definition of the term. Hoffman (1999) summarizes these positions as:<br />
Observable performance (Boam <strong>and</strong> Sparrow 1992; Bowden <strong>and</strong> Masters 1993);<br />
The st<strong>and</strong>ard or quality of the outcome of the person's performance (Rutherford 1995; Hager et<br />
al. 1994); or<br />
The underlying attributes of a person (Boyatzis 1982; Sternberg <strong>and</strong> Kolligian 1990).<br />
As it can be seen in the above classifications, competency as quality of the person’s performance is<br />
an accepted category among scholars. In this study, we adopt this definition to develop a model to<br />
assess the main IT competencies managers.<br />
3. Conceptual framework<br />
Figure 1 shows the model that is to be tested in this paper. The model is taken from a previous work<br />
to identify IT competence of business managers (Bassellier et al. 2003). In that study, the researchers<br />
have divided IT competency of managers into two dimensions: <strong>Knowledge</strong> <strong>and</strong> Experience (Figure 2).<br />
Figure 1: Model to be tested<br />
In our proposed model, we have determined four areas for IT competency of managers:<br />
Technology;<br />
Engineering <strong>and</strong> management;<br />
Intellectual; <strong>and</strong><br />
Learning<br />
Comparing to Bassellier’s model, we have transformed competencies from two main areas into four.<br />
There are two points in this transformation. Firstly, we think that this categorization better identifies the<br />
different IT competency areas of managers. In fact we have tried to rearrange all seven competency<br />
items of their model into a new organization. Secondly, our new arrangement is in more accordance<br />
to Katz’s managerial skills (1955). With the aid of Katz’s model, we have included an intellectual<br />
(conceptual) area into our model which we believe Bassellier’s model has not taken into account.<br />
In an article published in Harvard Business Review in 1955, Katz argued that what a manager can<br />
accomplish is based on the skills that he or she possesses. People will not embark on a task if they<br />
believe they are not adept enough to perform the task effectively (B<strong>and</strong>ura <strong>and</strong> Schunk 1981). This<br />
means that at least some managers, who have acquired their managerial positions because of<br />
technical knowledge <strong>and</strong> competencies, will tend to avoid the managerial aspects of their job<br />
preferring instead the technical, but not the managerial, aspects of their jobs. Therefore, for a<br />
manager to perform effectively, a combination of technical <strong>and</strong> managerial skills is required.<br />
Katz (1955) proposed a three-category typology of skills: technical, human <strong>and</strong> conceptual. Although<br />
numerous abilities can be identified within each of these categories, he believes the triad to be<br />
essential set of managerial skills (Peterson <strong>and</strong> Van Fleet 2004).<br />
Amongst Bassellier’s competency items, we believe that ‘access to knowledge’ has a different nature<br />
from our previous other three dimensions. Therefore, we have incorporated it into our model with a<br />
new title: learning, or the capacity for finding required knowledge <strong>and</strong> information. This name change<br />
also has the potential to incorporate some new skills that we believe comprise a manager’s IT<br />
competency. Table 1 presents a more detailed definition of each of the competency areas in our<br />
model.<br />
38
Mohammad Abooyee Ardakan et al.<br />
Figure 2: IT competency model (Bassellier et al. 2003)<br />
Table 1: Definition of competencies<br />
Areas of Definition Corresponding items in Competency Underst<strong>and</strong>ing or proficiency in<br />
Bassellier’s model<br />
Technology<br />
Engineering<br />
&<br />
<strong>Management</strong><br />
Intellectual<br />
Current <strong>and</strong> emergent technologies,<br />
specialized tools, methods, processes, <strong>and</strong><br />
applications<br />
Systems development <strong>and</strong> management<br />
methods<br />
General management skills that are<br />
considered a must-have in IT environments;<br />
such as: cooperative working, effective<br />
communication, team-working, <strong>and</strong> conflict<br />
resolution (Human Skills)<br />
Finding his role in the organization as a whole<br />
<strong>and</strong> trying to make it more effective <strong>and</strong><br />
efficient <strong>using</strong> available resources (system<br />
thinking)<br />
Learning Looking for more information about IT <strong>and</strong><br />
keeping himself up-to-date with latest<br />
developments<br />
4. Methodology<br />
Technology<br />
Application<br />
Systems<br />
Development<br />
<strong>Management</strong> of IT<br />
(partially)<br />
Access to<br />
knowledge<br />
To test the model, we have developed some items <strong>and</strong> scales for the four competency areas. Table 2<br />
shows an abridged version of new items in our research. These items will be used to prepare a<br />
questionnaire to assess IT competency of managers.<br />
The questionnaire will be distributed among managers of different business sectors. After collecting<br />
the filled questionnaires, we will investigate the validity of our model through Fuzzy Cognitive Mapping<br />
(FCM). We will also consider comprising items of each of the competency areas.<br />
39<br />
Experience
Mohammad Abooyee Ardakan et al.<br />
The procedure for creating the FCMs for mapping the competency items (variables) for IT projects is<br />
shown in Figure 3.<br />
Figure 3: Procedure for creating a targeted FCM<br />
4.1 The FCM methodology<br />
This methodology uses four matrices to represent the results that the methodology provides in each<br />
one of its stages. These are Initial Matrix of Competencies (IMC), Fuzzified Matrix of Competencies<br />
(FZMC), Strength of Relationships Matrix of Competencies (SRMC) <strong>and</strong> Final Matrix of Competencies<br />
(FMC).<br />
Table 2: IT competency items<br />
Item Corresponding Competency Reference<br />
<strong>Information</strong> storage <strong>and</strong> retrieval<br />
T<br />
Wu et al., 2007<br />
concepts<br />
Special Libraries Association, 2003<br />
<strong>Information</strong> Security<br />
Programming Languages<br />
Job related software<br />
Systems Integration<br />
Systems Analysis & Design<br />
Interconnectedness<br />
Partnership & Leveraging<br />
IT Alignment<br />
Organization Design<br />
Creativity & Innovation<br />
Multi-Lingual<br />
T<br />
T<br />
T<br />
E & M<br />
E & M<br />
I<br />
I<br />
I<br />
I<br />
I<br />
L<br />
ISO 27001<br />
Special Libraries Association, 2003<br />
Gorgone et al., 2002<br />
Wu et al., 2007<br />
State Library of North Carolina<br />
Gorgone & Gray, 2000<br />
Gorgone & Gray, 2000<br />
Special Libraries Association, 2004<br />
Special Libraries Association, 2004<br />
Wu et al., 2004<br />
Wu et al., 2004<br />
Larsen & Wetherbe, 1999<br />
Wu et al., 2004<br />
T: Technology E & M: Engineering & <strong>Management</strong> I: Intellectual L:<br />
Learning<br />
The methodology uses data gathered from questionnaires that will be filled by managers of different<br />
business sectors. The data are then transformed into numerical vectors associated with each one of<br />
the competency Items (CI) identified. Each component in a vector represents the value that the<br />
40
Mohammad Abooyee Ardakan et al.<br />
corresponding CI has for each one of the filled questionnaires. This generates an Initial Matrix of<br />
Competencies (IMC). Thresholds are applied to the IMC in order to adapt the information contained to<br />
the real world <strong>and</strong> maintain the logical integrity of data.<br />
Next, the numerical vectors associated with each CIs are fuzzified <strong>and</strong> treated as a fuzzy set. The<br />
fuzzification of the IMC produces the Fuzzified Matrix of Competencies (FZMC) containing the grades<br />
of membership of each component of a vector to a fuzzy set. The CIs are treated as variables,<br />
sometimes also referred as concepts. The degree of similarity between any two variables is evaluated<br />
to estimate the strength of the relationship between them <strong>and</strong> the polarity of that relationship.<br />
The result of these computations is a new matrix called Strength of Relationships Matrix of<br />
Competencies (SRMC). At this point, an expert determines whether there is a relationship between<br />
each pair of variables analyzed or not. The result is a Final Matrix of Competencies (FMC) which<br />
contains only those numerical fuzzy components which represent relationships between the CIs<br />
(Rodiguez-Repiso et al. 2007). This can guide us to develop our new IT competency model for<br />
managers.<br />
5. Conclusion<br />
Potentials of information technology <strong>and</strong> its increasing applications in today's businesses have<br />
dramatically transformed the environment within which organizations have to function. In such a<br />
rapidly changing environment, increased focus on customer <strong>and</strong> quick response to problems <strong>and</strong><br />
opportunities has made the manager a vital resource in guiding <strong>and</strong> directing employees to success.<br />
In order to improve its processes, enhance its productivity, or outperform its competitors, any<br />
organization needs to hire competent managers in respect to this technology.<br />
The output of our work will provide organizations <strong>and</strong> assessment communities with the required<br />
evaluation criteria to assess IT competency of managers. As a result, this model will help different<br />
business sectors to increase their efficiency <strong>and</strong> profits. This will be achieved with the aid of IT<br />
competent managers who are able to underst<strong>and</strong> the costs <strong>and</strong> complications of IT/IS projects, can<br />
align acquisition or development of information systems with objectives of their organizations, have<br />
reliable experience in conducting IT projects <strong>and</strong> much more.<br />
References<br />
B<strong>and</strong>ura, A. <strong>and</strong> Schunk, D.H. (1981) “Cultivating Competence, Self-efficacy, <strong>and</strong> Intrinsic Interest through<br />
Proximal Self-motivation”, Journal of Personality <strong>and</strong> Social Psychology, Vol. 41 No. 3, pp. 586-98.<br />
Bassellier, G., Benbasat, I. <strong>and</strong> Reich, B.H. (2003) “The Influence of IT Managers’ IT Competence on<br />
Championing IT”, <strong>Information</strong> Systems Research, Vol. 14, No. 4, December 2003, pp. 317-336<br />
Boam, R. <strong>and</strong> Sparrow, P. (1992) “Designing <strong>and</strong> Achieving Competency”, McGraw-Hill, London.<br />
Bowden, J. <strong>and</strong> Masters, G. (1993) “Implications for Higher Education of a Competency-Based Approach to<br />
Education <strong>and</strong> Training”, AGPS, Canberra.<br />
Boyatzis, R. (1982) “The Competent Manager – A model for Effective Performance”, John Wiley & Sons, New<br />
York.<br />
Gorgone, J. T., <strong>and</strong> Gray, P. (2000) “Model Curriculum <strong>and</strong> Guidelines for Graduate Degree Programs in<br />
<strong>Information</strong>, Communications of the AIS, Vol.3, pp.1–52.<br />
Hager, P., Athanasou, J. <strong>and</strong> Gonczi, A. (1994) “Assessment - Technical Manual”, AGPS, Canberra.<br />
Heilmann, P. (2007) “High Level Competence: A Tool for Coping with Organizational Change”, Journal of<br />
European Industrial Training, Vol. 31 No. 9, pp. 727-741.<br />
Hoffmann, T. (1999) “The Meanings of Competency”, Journal of European Industrial Training, Vol. 23 No 6, pp.<br />
275-285.<br />
Jenster, P. <strong>and</strong> Hussey, D. (2005) “Create a Common Culture Between IT <strong>and</strong> Business People to Reduce<br />
Project Failures”, Computer Weekly, March 22<br />
Jubb, R. <strong>and</strong> Rowbotham, D. (1997), “Competences in management Development: Challenging the Myths”,<br />
Journal of European Industrial Training, Vol. 21 No 5, pp. 171-5.<br />
Katz, R.L. (1955) “Skills of an effective administrator”, Harvard Business Review, Vol. 33 No. 1, pp. 33-42.<br />
Larsen, T.J. <strong>and</strong> Wetherbe, J.C. (1999) “An Exploratory Field Study of Differences in <strong>Information</strong> Technology Use<br />
Between more- <strong>and</strong> less-innovative Middle Managers”, <strong>Information</strong> <strong>and</strong> <strong>Management</strong> 36 (2), 1999, pp. 93–<br />
108.<br />
Neufeld, D. J., Dong, L., <strong>and</strong> Higgins, C. (2007) “Charismatic Leadership <strong>and</strong> User Acceptance of <strong>Information</strong><br />
Technology”, European Journal of <strong>Information</strong> Systems, 16(4), 494–510.<br />
Peterson, T.O. <strong>and</strong> Van Fleet, D. D. (2004) “The Ongoing Legacy of R.L. Katz: an Updated Typology of<br />
<strong>Management</strong> Skills”, <strong>Management</strong> Decision, Vol. 42, No 10, pp. 1297-1308<br />
Rodriguez- Repiso, L., Setchi, R. <strong>and</strong> Salmeron, J.L. (2007) "Modeling IT Projects Success with Fuzzy Cognitive<br />
Maps", Expert Systems with Applications 32 (2007) 543–559<br />
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Rutherford, P. (1995) “Competency Based Assessment”, Pitman, Melbourne.<br />
Sternberg, R <strong>and</strong> Kolligian, Jr J. (1990) “Competence considered”, Yale University Press, New Haven, CT.<br />
Strebler, M., Robinson, D. <strong>and</strong> Heron, P. (1997), “Getting the Best Out of Your Competencies”, Institute of<br />
Employment Studies, University of Sussex, Brighton.<br />
Stuart, L. H., Mills, A.M. <strong>and</strong> Remus U. (2009) “School Leaders, ICT Competence <strong>and</strong> Championing Innovations”,<br />
Elsevier, Christchurch.<br />
Thompson, J.E, Stuart, R. <strong>and</strong> Lindsay, P.R. (1996) "The Competence of top Team Members: A Framework for<br />
Successful Performance", Journal of Managerial Psychology, Vol. 11 No. 3, pp.48 – 66<br />
Wu, J.H., Chen, Y.C. <strong>and</strong> Chang, J. (2007) “Critical IS Professional Activities <strong>and</strong> Skills / <strong>Knowledge</strong>: A<br />
Perspective of IS Managers”, Computers in Human Behavior 23<br />
Wu, J.H., Chen, Y.C. <strong>and</strong> Lin, H.H. (2004) “Developing a Set of Managerial Needs for IS Managers: A Study of<br />
Necessary Managerial Activities <strong>and</strong> Skills”, <strong>Information</strong> <strong>and</strong> <strong>Management</strong> 41, pp. 413-429<br />
42
Investigating the Relationship of Managers’ IT Competency<br />
<strong>and</strong> IT Projects’ Risks<br />
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
Tehran University, Iran<br />
abooyee@ut.ac.ir<br />
bsohrabi@ut.ac.ir<br />
vsaadat@ut.ac.ir<br />
Abstract: These days, applying IT in organizations is inevitable, either for higher performance of current<br />
processes or as a key success factor in competitive advantages. For IT deployment in organizations, developing<br />
information systems as separate projects is needed. IT projects encounter variety of risks <strong>and</strong> it seems that IT<br />
competent Managers will h<strong>and</strong>le better IT project risks. In the present article, we have investigated the<br />
relationship between Managers’ IT competency with IT projects’ risk exposure. The construct of IT competency<br />
has been considered <strong>using</strong> two dimensions of IT <strong>Knowledge</strong> <strong>and</strong> IT Experience; <strong>and</strong> for Risk Exposure, projects<br />
risk has been evaluated along five dimensions: Technological Newness, Application Size, Lack of Expertise,<br />
Application Complexity <strong>and</strong> Organizational Environment. This survey involves 100 managers who have<br />
responsibility in selecting, outsourcing, consulting, leading <strong>and</strong> managing IT projects in their organizations. We<br />
have used Structural Equation Modeling with LISREL to test this relationship.<br />
Keywords: IT projects, managers’ IT competency, IT projects risk<br />
1. Introduction<br />
No wonder that there has been a dramatic increase in the use of IT alongside different businesses<br />
<strong>and</strong> so many IT projects are being started every day. Research tells us that 30- <strong>and</strong> 70-percent of IT<br />
projects fail in some important way, leading to global economic waste totaling perhaps trillions of<br />
dollars (Krigsman, 2010). These statistics highlight that many IT Projects in organizations have been<br />
failed or faced with some major risks. There have been some attempts to quantify the failure of IT<br />
projects. Sessions (2009) proposed a model that quantifies the dollar cost of IT failure worldwide. He<br />
concludes that the global IT failure costs the world economy a staggering amount of $6.2 trillion per<br />
year, or $500 billion each month. Poorly managed IT projects are a significant source of financial<br />
waste, so we must applaud these efforts, even though significant results may take years to achieve.<br />
Failed IT projects cause substantial waste in both the government <strong>and</strong> private sector (Krigsman,<br />
2010). What can change this trend <strong>and</strong> save IT projects? Do IT Competent Managers lead IT projects<br />
better that those who are not skillful in this area? Does identification of risk factors <strong>and</strong> trying to use<br />
risk management improve success rate of IT projects? We will investigate these questions in this<br />
paper.<br />
2. Literature review<br />
Science has a profound effect on the way we live, largely through technology. Technology is the use<br />
of scientific knowledge for practical purposes (Burnie, 2003). <strong>Information</strong> technology (IT) is the<br />
acquisition, processing, storage <strong>and</strong> dissemination of vocal, pictorial, textual <strong>and</strong> numerical<br />
information by a microelectronics-based combination of computing <strong>and</strong> telecommunications (Longley,<br />
1985). The term in its modern sense first appeared in an article published in the Harvard Business<br />
Review (1958), in which authors Leavitt <strong>and</strong> Whisler commented that "the new technology does not<br />
yet have a single established name. We shall call it information technology (IT)". Success/failure of IT<br />
projects have been investigated thru some researches by McFarlan (1981), this issue was examined<br />
by some authors (Alter, 1978 <strong>and</strong> Charette, 1989) but all show that little research has since been<br />
done to advance our knowledge of IT projects risk. Unfortunately, it appears that software<br />
development efforts still suffer from age-old difficulties of cost overruns, project delays, <strong>and</strong> unmet<br />
user needs (Bark et al, 1993). This research has been accomplished to investigate the alignment<br />
between IT projects risks <strong>and</strong> Managers' IT Competency, so we need to briefly define Risk, IT<br />
Competency <strong>and</strong> fit concepts with emphasizing the IT meaning.<br />
2.1 Risk<br />
Since terminology of technology has a heavy tie with the discipline of engineering, it seems<br />
appropriate to start with the definition of risk by the National Institute of St<strong>and</strong>ards <strong>and</strong> Technology<br />
(NIST) in its h<strong>and</strong>book , which describes risk as "the possibility of something adverse happening"<br />
43
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
(NIST, 1995). The 2001 publication of NIST h<strong>and</strong>book defines risk as "the net negative impact of the<br />
exercise of vulnerability, considering both the probability <strong>and</strong> the impact of occurrence" (NIST, 2001).<br />
Another appropriate definition of risk, related to the computing environment in particular, as stated by<br />
Kailay <strong>and</strong> Jarratt (1995) is "the potential for damage to a system or associated assets that exists as<br />
the result of a combination of a security threat <strong>and</strong> vulnerability". The risk exists because of the<br />
combination of threats, vulnerability <strong>and</strong> asset value. Vulnerability is being a weakness in the security<br />
system that might be exploited to cause loss of or harm to the asset(s) (Pfleeger, 1989) <strong>and</strong> a threat<br />
being the source or circumstance that has the potential to cause loss or harm (Kailay <strong>and</strong> Jarratt,<br />
1995; Pfleeger, 1989). Denenberg et al (1974) <strong>and</strong> Kaplan <strong>and</strong> Garrick (1981) define project risk as:<br />
project risk = (project uncertainty) * (magnitude of potential loss due to project failure). Boehm (1989)<br />
defines risk impact or risk exposure (RE) as RE= Prob(UO) * Loss(UO) where Prob(UO) is the<br />
probability of an unsatisfactory outcome, <strong>and</strong> Loss(UO) is the loss to the parties affected if the<br />
outcome is unsatisfactory. Another definition for risk in engineering is: "a combination of the<br />
probability of an undesirable event with the magnitude of each <strong>and</strong> every foreseeable consequence<br />
(damage to property, loss of money, injury to people, lives lost, <strong>and</strong> so on)" (Bell, 1989). Risk is often<br />
defined as a measure of probability <strong>and</strong> severity of adverse effects (Haimes, 1991). The most<br />
common definition of risk is in terms of exposure to specific factors that present a threat to achieving<br />
the expected outcomes of a project. On this basis, risk in IT projects is usually defined as the<br />
probability-weighted impact of an event on a project (Boehm, 1989; Charette, 1989, 1996).<br />
Simplistically, R = P * I where R is the risk exposure attributable to a particular risk factor, P is the<br />
probability the undesirable event will be realized <strong>and</strong> I is the impact or magnitude of the loss if the<br />
event occurs. Risk exposure is usually measured in dollars or time in commercial projects. This view<br />
of risk was adapted from management theory in the 1980s (March <strong>and</strong> Shapira, 1987).<br />
Barki et al (2001) have categorized IT projects risks in five dimensions of Technological Newness,<br />
Application Size, Lack of Expertise, Application Complexity <strong>and</strong> Organizational Environment that<br />
shown in figure 1. These dimensions are used in our research to identify Risk dimensions.<br />
Figure 1: Conceptual model of risk exposure<br />
2.2 IT competency<br />
Since the mid-1980s, as the strategic impact of IT became evident, both researchers <strong>and</strong> practitioners<br />
have argued that the management of IT <strong>and</strong> leadership in IT must be a shared endeavor between IT<br />
44
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
professionals <strong>and</strong> line managers (Henderson, 1990; Keen, 1991; Rockart 1988; Sambamurthy <strong>and</strong><br />
Zmud 1994; Smith 1996).<br />
Business managers who are competent in IT, possess IT knowledge <strong>and</strong> IT experience, though their<br />
primary area of expertise is likely be in an area other than IT. Bassellier et al (2003) have<br />
conceptualized competence as a duality, including the knowledge <strong>and</strong> experience of business<br />
managers. <strong>Knowledge</strong> is a key part of competence, but as competence is grounded in everyday<br />
practice (Orlikowski, 2002), knowledge on its own is not sufficient to represent competence. In that<br />
sense, competence is more than the knowledge possessed by individuals; it encompasses the use or<br />
exploitation of such knowledge as well—the ability to put knowledge into practice (Brown <strong>and</strong> Duguid<br />
1998). It is the process of search <strong>and</strong> learning—embracing different types of knowledge <strong>and</strong><br />
activities—that will lead to performance (Karnøe, 1995). These two aspects of knowledge <strong>and</strong><br />
experience are found at different levels in the literature. Common knowledge refers to the<br />
commonality of vocabulary, conceptual knowledge, <strong>and</strong> experiences among individual specialists<br />
(Grant, 1996), foc<strong>using</strong> on the importance of both knowledge <strong>and</strong> practice. In the practitioner<br />
literature, according to Forrester Research, the new technology executive is one “who appreciates<br />
technology’s capabilities <strong>and</strong> uses technology as a lever to deliver outst<strong>and</strong>ing business results”<br />
(Smith, 1996). <strong>Knowledge</strong> is specialized—a usable body of facts <strong>and</strong> concepts relevant for a<br />
particular job (Boyatzis, 1982). We can further distinguish between these concepts by noting that<br />
knowledge is static <strong>and</strong> is something we use in action, while knowing is dynamic <strong>and</strong> is part of the<br />
action.<br />
Many organizational studies use the taxonomy of knowledge that distinguishes tacit from explicit<br />
knowledge. Based on this taxonomy, explicit knowledge is knowledge that can be taught, read, <strong>and</strong><br />
explained (Nonaka, 1994; Polanyi, 1967; Ryle, 1949). Polanyi (1967) identified that knowledge<br />
consists of more than the explicit, formal knowledge that can be clearly transmitted <strong>using</strong> systematic<br />
language. Individuals also know how to do things that they may not be able to render in an explicit<br />
fashion (Polanyi 1967). Tacit knowledge is gained through personal experience <strong>and</strong> is not easily<br />
transmittable (Nonaka, 1994). One main challenge with this taxonomy is that while the concept of tacit<br />
knowledge is intuitively easy to underst<strong>and</strong>, it is difficult to model <strong>and</strong> capture. The relationship<br />
between these two taxonomies is complex. Despite the greater recognition of the importance of<br />
knowing as a distinct element from knowledge, how this fits with the explicit-tacit taxonomy is not<br />
clear. Some argue that tacit knowledge is distinct from knowing (Cook <strong>and</strong> Brown, 1999), while others<br />
claim that it is a form of knowing (Orlikowski, 2002). However, both perspectives highlight the role of<br />
action in knowing. What emerges from these studies is the importance of a multidimensional<br />
perspective of competence. Based on this, it becomes essential to look at what people do as well as<br />
at what they possess to underst<strong>and</strong> competence. The nature of competence is therefore defined by<br />
the knowledge <strong>and</strong> experience of business managers. The knowledge dimension captures the<br />
specialized knowledge that is relevant to becoming competent with IT. The experience dimension<br />
captures the activities that business managers engage in to deepen their tacit knowledge <strong>and</strong> their<br />
knowing.<br />
Bassellier et al (2003) have conceptualized IT Competency by IT <strong>Knowledge</strong> <strong>and</strong> IT Experience<br />
dimensions that shown in figure 2.<br />
Figure 2: Conceptual model of IT competency<br />
45
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
Technology, Applications, System Development, <strong>Management</strong> <strong>and</strong> Access to <strong>Knowledge</strong> are 5<br />
dimensions of IT <strong>Knowledge</strong> that shown in figure 3.<br />
Figure 3: IT knowledge dimensions<br />
Experience in Projects <strong>and</strong> Experience in IT <strong>Management</strong> are 2 dimensions of IT Experience that<br />
shown in figure 4.<br />
Figure 4: IT experience dimensions<br />
2.3 Fit<br />
There is not any clear definition for fit. Definitional rigor is critical, since different conceptual definitions<br />
of fit imply different meanings of a contingency theory <strong>and</strong> different expected empirical results (Drazin<br />
<strong>and</strong> Van de Ven, 1985). This lack of clear definition <strong>and</strong> methodological rigor has led to inconsistent<br />
results <strong>and</strong> could eventually alter the very meaning of a theory (Miller, 1981; Schoonhoven, 1981; Van<br />
de Ven <strong>and</strong> Drazin, 1985; Venkatraman, 1989b). In an effort toward clarifying of the concept of fit <strong>and</strong><br />
to help researchers draw the appropriate links between the verbalization of fit-based relationships <strong>and</strong><br />
the statistical analyses chosen to test these relationships, Venkatraman (1989) proposed a framework<br />
for the classification of different concepts of fit. This framework identifies six different perspectives<br />
from which fit can be defined <strong>and</strong> studied; these are, fit as (a) moderation, (b) mediation, (c) matching,<br />
(d) co-variation, (e) profile deviation, <strong>and</strong> (f) gestalts. The framework classifies each perspective along<br />
46
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
three dimensions: the degree of specificity of the functional form of fit, the number of variables in the<br />
equation, <strong>and</strong> the presence – or absence – of a criterion variable (Bergeron et al, 1999). These six<br />
perspectives can be classified into two broad categories, according to the number of variables being<br />
simultaneously examined: the "reductionist" conceptualization of fit <strong>and</strong> "holistic" conceptualization<br />
(Venkatraman, 1990). The "reductionist" conceptualization" is based on a central assumption that the<br />
co-alignment between two constructs [<strong>and</strong>] ... can be best understood in terms of pair-wise coalignment<br />
among individual dimensions that represent two constructs". Three of six perspectives of fit<br />
defined by Venkatraman belong to this conceptualization. They are the moderation, the mediation <strong>and</strong><br />
the matching perspectives. The "holistic" conceptualization of fit emphasizes the systemic nature of<br />
co-alignment, wherein several variables are examined simultaneously. Fit as co-variation, fit as profile<br />
deviation, <strong>and</strong> fit as gestalt pertain to this perspective. Several researchers have argued that the<br />
holistic conceptualization was richer, because of its ability to retain the complex <strong>and</strong> interrelated<br />
nature of the relationship between variables (Venkatraman, 1990). We decided to use co-variation<br />
perspective from "holistic" conceptualization in our Model.<br />
2.4 Performance<br />
This construct refers to the efficiency <strong>and</strong> effectiveness with which an IT project development was<br />
completed <strong>and</strong> Performance has considered by Time, Budget <strong>and</strong> Quality. Time, Budget <strong>and</strong> Quality<br />
are 3 dimensions of Performance that shown in figure 5.<br />
Figure 5: Performance dimensions<br />
Fitting Risk Exposure in IT projects <strong>and</strong> IT Competency of Manager can influence Performance; this<br />
conceptual model has been shown in figure 5.<br />
Figure 6: Model of fitting IT projects risks <strong>and</strong> mangers' IT competency<br />
3. Method<br />
3.1 Construct<br />
Barki et al (2001) have considered project characteristics that increase the probability of project failure<br />
in five dimensions of Technological Newness, Application Size, Lack of Expertise, Application<br />
Complexity <strong>and</strong> Organizational Environment <strong>and</strong> have defined 23 risk variables along them to assess<br />
project failure. We have used these dimensions <strong>and</strong> customize the risk variables to assess IT projects<br />
failure. Questions are revised for Iranian culture <strong>and</strong> also some of them were neglected according to<br />
preliminary content validity checking. Bassellier et al (2003) have considered two dimensions of IT<br />
knowledge <strong>and</strong> IT experience to assess IT Competency of managers, they developed the initial items<br />
<strong>and</strong> then tested their measurement properties on a small scale, <strong>using</strong> exploratory analysis. Next, they<br />
47
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
conducted a full-scale test of the measurement properties <strong>and</strong> of the structural model. All procedures<br />
including item development, instrument pretesting <strong>and</strong> refinement, assessment of measurement<br />
properties <strong>and</strong> model testing were done <strong>and</strong> they have measured IT <strong>Knowledge</strong> dimension by<br />
Technology, Applications, System Development, <strong>Management</strong> <strong>and</strong> Access to <strong>Knowledge</strong> factors <strong>and</strong><br />
also IT Experience dimension by Experience in Projects <strong>and</strong> Experience in IT <strong>Management</strong> factors.<br />
We have used these dimensions <strong>and</strong> sub-dimensions for our questionnaire <strong>and</strong> also customize the<br />
questions. Questions were revised according to preliminary context validity survey, like the previous<br />
part actions done.<br />
Questionnaire with 39 questions prepared for measuring IT Competency of Managers <strong>and</strong> also IT<br />
Projects' Risks Exposure. We designed 3 questions related to performance items: Time, Budget <strong>and</strong><br />
Quality that filled for each project by its end users. We designed questions in 5-point Likert scale by<br />
Google Doc <strong>and</strong> used its online benefits to obliged respondents to fill all questions; because of this we<br />
hadn't any excluded questions. Questionnaires filled for 100 projects by 100 Managers <strong>and</strong> 745 users<br />
that we calculated the average of each questions filled by users for each project (For instance, project<br />
A had 39 questions filled by its Manager <strong>and</strong> 3 questions of its performance that filled by 8 users, we<br />
calculate the average response of these 8 users for each performance questions). Tehran<br />
Municipality supported us in all research processes. We investigated their projects <strong>and</strong> chose 120<br />
projects among them <strong>and</strong> focused on them. We identified their projects <strong>and</strong> negotiate with them,<br />
finally 100 projects remained for us that their managers filled the questionnaires <strong>and</strong> sent.<br />
4. Data<br />
In below, there are two tables; tables 1 shows reliability estimates of questions <strong>and</strong> table 2 shows<br />
demographics of IT Managers who participate in this research.<br />
Table 1: Reliability estimates<br />
Dimension Sub-dimensions Number of Alpha<br />
Questions<br />
IT Competency <strong>Knowledge</strong> of Technology 3 0.89<br />
<strong>Knowledge</strong> of Applications 4 0.87<br />
<strong>Knowledge</strong> of System Development 3 0.83<br />
<strong>Knowledge</strong> of <strong>Management</strong> of IT 4 0.91<br />
Access to IT <strong>Knowledge</strong> 2 0.79<br />
Experience in IT Projects 3 0.89<br />
Experience in <strong>Management</strong> of IT 3 0.86<br />
Risk Exposure Technology Newness 3 0.90<br />
Application Size, 3 0.81<br />
Lack of Expertise 4 0.91<br />
Application Complexity 3 0.83<br />
Table 2: Demographics<br />
Organizational Environment 4 0.88<br />
Division Group Category Count Percent<br />
Gender Male 92 92<br />
Female 8 8<br />
Degree Diploma 7 7<br />
Bachelor 49 49<br />
Master 38 38<br />
Ph.D. 6 6<br />
IT <strong>Management</strong> Experience Less than 3 years 11 11<br />
Between 3 to 5 years 23 23<br />
Between 5 to 10 years 52 52<br />
More than 10 years 14 14<br />
4.1 Model testing<br />
The model was tested <strong>using</strong> LISREL 8.53 (Jِreskog <strong>and</strong> Sِrbom 2002) with maximum-likelihood<br />
estimation procedures <strong>and</strong> the covariance matrix. The model presented in Figure 5 suggests three<br />
levels of factors, or latent variables. For IT Competency, the first-order factors are the five dimensions<br />
of IT knowledge (Technology, Applications, System Development, <strong>Management</strong> of IT, <strong>and</strong> Access to<br />
IT <strong>Knowledge</strong>) <strong>and</strong> the two dimensions of IT Experience (IT Projects, <strong>Management</strong> of IT). These<br />
factors at the first order measure two second order factors: IT <strong>Knowledge</strong> <strong>and</strong> IT Experience. IT<br />
48
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
Risk Exposure <strong>and</strong> IT Competency have correlation with Performance, so we should investigate the<br />
fitting these two latent variables <strong>and</strong> their effect on Performance.<br />
Figure 6: Result of IT competency model testing<br />
49
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
Figure 7: Result of risk exposure model testing<br />
Figure 8: Result of proposed model testing<br />
50
Table 3: Goodness of fit indices<br />
Mohammad Abooyee Ardakan, Babak Sohrabi <strong>and</strong> Vahid Saadat<br />
Item Value in Model Desired Value<br />
Total number of items 39<br />
X 2 237<br />
df 86<br />
X 2 /df 2.76 0.9<br />
AGFI 0.78 >0.8<br />
St<strong>and</strong>ardized RMR 0.00 0.9<br />
CFI 0.94 >0.9<br />
5. Discussion <strong>and</strong> conclusion<br />
This paper has examined IT projects risks <strong>and</strong> Managers' IT Competency in the literature <strong>and</strong> in a<br />
study of IT projects in Tehran Municipal (Iran). This study has attempted a broad-based theoretically<br />
guided field study of how Project Performance is affected by managers' IT Competency <strong>and</strong> projects<br />
Risk Exposure. IT Competent Managers are introducing with risks <strong>and</strong> can identify them <strong>and</strong> try to<br />
manage them.<br />
These overall conclusions are reached:<br />
First, Results showed that there is a significant relation between Technology literacy of managers <strong>and</strong><br />
the risk of Technology Newness. Also, managers with great Abilities in management can overcome<br />
the risks of Application Complexity <strong>and</strong> Organizational Environment.<br />
Second, Access to <strong>Knowledge</strong> factor was the interesting one, there are some managers that can<br />
provide desired knowledge from others or knowledge resources. Ability to search <strong>and</strong> find the proper<br />
information <strong>and</strong> change them to knowledge is a great factor for managers that help them take better<br />
decisions <strong>and</strong> manage risks.<br />
Third, In general this research showed that in Tehran Municipality, high-risk IT projects with Budget<br />
criterion needs high knowledge of <strong>Management</strong> <strong>and</strong> System Development <strong>and</strong> high Experience of IT<br />
<strong>Management</strong>.<br />
Forth, High-risk IT projects with Quality criterion needs high knowledge of <strong>Management</strong> <strong>and</strong><br />
Technology <strong>and</strong> high Experience in Projects.<br />
This research also measured IT Competency of Tehran Municipality Managers <strong>and</strong> sent some<br />
valuable points to Human Resource Department for recruitment <strong>and</strong> job promotion strategies.<br />
6. Further research<br />
This research was done in Tehran Municipality. Mayor of Tehran, Dr. Mohammad Bagher Ghalibaf is<br />
very supportive to IT projects for urban development in Tehran. Tehran's IT Master Plan has been<br />
prepared by an expert team of managers <strong>and</strong> consultants <strong>and</strong> is followed by subordinates, so its IT<br />
projects will not be the good sample of IT projects in Iran. It is recommended to implement this<br />
research in some other organizations like public organizations or other municipalities of Iranian cities.<br />
Also we used instruments that were constructed before by Barki et al (2001) <strong>and</strong> Bassellier et al<br />
(2003), it seems that these instruments should be developed <strong>using</strong> some new theoretical perspective<br />
toward success/failure of IT projects regarding specific context of Iranian organizations.<br />
Acknowledgement<br />
The authors sincerely wish to acknowledge supports of Tehran Municipality in all steps of the<br />
research.<br />
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52
Evaluation of ICT Investment in Healthcare: Insights <strong>and</strong><br />
Agenda for Future Research<br />
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
University of Groningen, The Netherl<strong>and</strong>s<br />
a.arviansyah@rug.nl<br />
e.w.berghout@rug.nl<br />
c.w.tan@rug.nl<br />
Abstract: The recent downturn in global economy exerts mounting pressure on the justification of ICT budgets<br />
within organizations. Effective evaluation of ICT investments is therefore deterministic of organizations’ ability to<br />
maximize the business value to be extracted from such investments. The same can be said for healthcare<br />
institutions. Increasingly, healthcare institutions are pressured to optimize ICT investments for improving patient<br />
care. Yet, extant literature is fragmented on the focal concepts to be utilized for ICT evaluations in healthcare. By<br />
conducting a systematic literature review of 99 scholarly articles that have been published between 2003 <strong>and</strong><br />
2008, this study endeavors to shed light on contemporary theoretical <strong>and</strong> methodological trends that are pertinent<br />
to ICT evaluations in healthcare. Based on our literature review, three main findings are noted. First, we detect a<br />
gradual progression of ICT evaluation methods from the conventional st<strong>and</strong>ard of r<strong>and</strong>om controlled trial (RCT)<br />
to mixed-methods <strong>and</strong> triangulation. This, in turn, translates to a greater diversity of constructs being utilized for<br />
ICT evaluation <strong>and</strong> an expansion in operationalization techniques for measurement purposes. Second, we<br />
identified the five most important stakeholders <strong>and</strong> evaluative dimensions to be included in the ICT evaluation<br />
process. Together, these identified stakeholders <strong>and</strong> evaluative dimensions represent core elements to be<br />
incorporated into ICT evaluations in healthcare such that evaluations can be undertaken in an informative <strong>and</strong><br />
purposeful fashion. Third, we identified several distinctive contextual characteristics of the healthcare sector that<br />
deserve further research. These characteristics include the multi-stakeholder environment, the industry’s<br />
emphasis on safety as well as the knowledge intensive nature <strong>and</strong> h<strong>and</strong>crafted type of work being performed.<br />
This study enriches extant literature by synthesizing findings from past studies to glean insights into relevant<br />
concepts for ICT evaluation in healthcare <strong>and</strong> propose an agenda for future research along this direction.<br />
Keywords: information <strong>and</strong> communication technology evaluation, information technology evaluation, information<br />
technology investment, information technology in healthcare, systematic literature review<br />
1. Introduction<br />
Anderson & Aydin (2005) reported a 50% failure rate for healthcare information systems due to userresistance<br />
<strong>and</strong> staff interference problems. They argued that ICT failures in healthcare are caused by<br />
overemphasizing technological <strong>and</strong> economic aspects of ICT investments with little regard for<br />
organisational <strong>and</strong> socio-political issues. Sistrom (2005) argued that despite few tangible benefits <strong>and</strong><br />
significant adverse effects on patients <strong>and</strong> the medical profession, the healthcare sector has invested<br />
heavily in information technology. The healthcare sector is slow in adopting technology (Kaplan, 1997,<br />
Christensen <strong>and</strong> Remler, 2009, Sistrom, 2005). Kaplan (1997), who claimed that the lag of the<br />
healthcare sector in technology adoption, is caused by a lack of knowledge about the cultural <strong>and</strong><br />
socio-political aspects of ICT investments. For this reason, Friedman & Wyatt (2006) predicted that<br />
there will be a dem<strong>and</strong> for evidence-based technology to facilitate adoption decisions by healthcare<br />
organisation given their emphasis on safety. Arguably, two reasons justify the urgency of effective ICT<br />
evaluation in the healthcare sector. One, effective evaluation of ICT investments provides a means of<br />
drawing comparisons among competing project alternatives such that investment decisions can be<br />
undertaken in an informative <strong>and</strong> purposeful manner (Farbey et al., 1993). Two, substantial<br />
challenges exist with regards to the effective evaluation of ICT investments in the healthcare sector<br />
due to its contextual uniqueness <strong>and</strong> complexity (Braaksma et al., 2006) By conducting a systematic<br />
review of extant literature, this study thus provides an overview of contemporary theoretical <strong>and</strong><br />
methodological trends in the evaluation of ICT investments within the healthcare sector.<br />
2. Theoretical foundation<br />
2.1 Evaluation of ICT in healthcare<br />
Ammenwerth (2004) defines evaluation as the act of measuring or exploring properties of a health<br />
information system that serves to inform decision-making about the system. That is, evaluation<br />
represents the process of gauging resources for their merit <strong>and</strong> worth through comparing alternatives<br />
<strong>and</strong> ending with the act of choice (Guba <strong>and</strong> Lincoln, 1981, Berghout, 1997). The basic types of<br />
evaluation methods can be divided into formative-summative type <strong>and</strong> objectivist-subjectivist method<br />
53
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
(Friedman <strong>and</strong> Wyatt, 2006). The formative type of evaluation is conducted during the life time of a<br />
project <strong>and</strong> intended to provide input for development <strong>and</strong> design. Conversely, summative is<br />
conducted at the end of a project <strong>and</strong> intended to look for system’s achievement (Lærum, 2004,<br />
Stoop, 2005). Whereas objectivist methods deal primarily with quantitative measurements, subjectivist<br />
methods deal with qualitative measurements. Goodman et al., (1999) argued that technologies may<br />
be assessed at different stages of diffusion <strong>and</strong> maturity. Therefore, in order to meet the needs of<br />
various policy makers seeking information throughout technological lifecycles, Goodman et al. (1999)<br />
suggested an iterative process of healthcare technology evaluation by taking into consideration its<br />
rapid change <strong>and</strong> development. For evaluation to be comprehensive, Remenyi et al. (2007) argued<br />
that evaluation should incorporate the opinions of all major stakeholders <strong>and</strong> focus on a full range of<br />
benefits or outcomes, both tangible <strong>and</strong> intangible. They argued that while there is no self-evident<br />
methodology for cost-benefit analysis of ICT, organisations still need to be able to evaluate their<br />
business process changes <strong>and</strong> the accompanying ICT investments. To capture the benefits of new<br />
technologies, the utilization of robust methods, with appropriate evaluative dimensions that take into<br />
account indirect benefits <strong>and</strong> costs, is needed to enhance decision-making within healthcare<br />
organizations (Sorenson et al., 2008). Conceivably, more knowledge on appropriate stakeholders <strong>and</strong><br />
evaluative dimension are required from a value-centric perspective.<br />
3. Method<br />
The literature review is conducted by examining published research from EBSCO Host Research<br />
Database, which includes Business Resource Premier – a database of developments in the field of<br />
international business <strong>and</strong> management <strong>and</strong> MEDLINE – a database of developments in the field of<br />
medical information, nursing <strong>and</strong> healthcare systems. The search strategy <strong>and</strong> flow of systematic<br />
review is shown in details in Figure 1. Several restrictions are applied in the phase of detail reviewed<br />
to establish the scope <strong>and</strong> framework of the research. Table 1 shows the definition of each term <strong>and</strong><br />
the criteria used for article selection to comprise the preceding definitions. All the articles are analysed<br />
<strong>and</strong> synthesised according to their type of study, evaluation method, stakeholders <strong>and</strong> evaluative<br />
dimension.<br />
Table 1: Definition <strong>and</strong> criteria<br />
Term Definition References Criteria<br />
Evaluation Process of describing the realisation of<br />
resources for their merit <strong>and</strong> worth through<br />
judging <strong>and</strong> comparing alternatives to other<br />
comparable entities <strong>and</strong>/or with a set of<br />
st<strong>and</strong>ards suitable for its context, ended with<br />
the act of choice in order to improve the<br />
design or the implementation of resources<br />
ICT Terminology derived from the term of<br />
<strong>Information</strong> Technology with a high<br />
dependency on data communication. Known<br />
also as a set of information processing,<br />
storage <strong>and</strong> transmission technologies<br />
emerging from microprocessor advancement<br />
Investment Use of money to get a profit or to increase the<br />
probability of a successful a business activity<br />
over a period of time. To be considered as<br />
investment, the transformation of capital into<br />
assets should last for at least a period of more<br />
than one year; allowing for an evaluation of its<br />
worthiness <strong>and</strong> its alignment with overall<br />
strategy<br />
Healthcare Prevention, treatment, <strong>and</strong> management of<br />
illness <strong>and</strong> the preservation of mental <strong>and</strong><br />
physical well-being through the services<br />
offered by the medical <strong>and</strong> allied health<br />
professions.<br />
54<br />
(Ammenwerth et<br />
al., 2004,<br />
Berghout, 1997,<br />
Guba <strong>and</strong><br />
Lincoln, 1981,<br />
Remenyi et al.,<br />
2007)<br />
(Cantwell et al.,<br />
2004, Remenyi<br />
et al., 2007)<br />
Longman<br />
Dictionary of<br />
Contemporary<br />
English<br />
(Berghout, 1997,<br />
Hogbin <strong>and</strong><br />
Thomas, 1994)<br />
The American<br />
Heritage<br />
Dictionary of the<br />
English<br />
Language<br />
Articles describe evaluation<br />
process <strong>using</strong> specific evaluative<br />
dimensions.<br />
Articles describe the involvement<br />
of ICT as the chain in delivering<br />
value, i.e. supporting<br />
organisational processes.<br />
Computer-based training or any<br />
kinds of education related matters<br />
are excluded as these systems are<br />
not part of direct patient care<br />
(Ammenwerth <strong>and</strong> de Keizer,<br />
2005)<br />
Articles describe the<br />
consequences of investment<br />
decision <strong>and</strong> state the outcome of<br />
the investment based on the<br />
evaluation process. The<br />
worthiness based on the<br />
evaluative dimensions could be<br />
tangible or intangible or a<br />
combination of them.<br />
Articles describe the evaluation of<br />
ICT in the healthcare context.
Figure 1: Search strategy for systematic review<br />
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
55
4. Results<br />
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
In this section we will describe the composition of the remaining articles from the systematic literature<br />
review along with the research’s result of stakeholders <strong>and</strong> evaluative dimensions.<br />
Descriptive statistics from our literature review show that 46% of the articles belong to the category of<br />
case or empirical studies, 30% to that of informational studies <strong>and</strong> 24% to that of review studies<br />
(Figure 2). In the category of case or empirical study, most of the articles use combination methods or<br />
multi approaches in their evaluation process (Figure 3). More researchers use quantitative methods<br />
than qualitative studies during the period of published-articles (Figure 3)<br />
Figure 2: Type of study from the remaining articles<br />
Figure 3: Evaluation method from the category of case <strong>and</strong> empirical study<br />
4.1 Analysis of stakeholders<br />
Many stakeholders were identified throughout the study. 17 categories were identified <strong>and</strong> their<br />
definitions summarised. Sorted by their frequency, number of citation <strong>and</strong> impact factor (Figure 4),<br />
these stakeholders are: Physician, Nurse, Patient, Healthcare organisation, Clinician, (End) User,<br />
IT/IS department/developer related, Staff, Assistant related position, Client, Head of clinic/laboratory<br />
manager, Clinical researcher/hospital scientist, Top management, General Practitioner (GP)/Doctor,<br />
Medical student, Head of division/manager, Community/external.<br />
Figure 4 <strong>and</strong> Figure 5 compare contribution of number of citations, impact factor <strong>and</strong> frequency across<br />
the different categories of stakeholders. For comparison of these figures, Figure 6 illustrates the bar<br />
chart of score difference from these two stacked bars across every category of stakeholders. All bar<br />
charts are sorted in descending order. Figure 4 illustrates the importance of stakeholders on the basis<br />
of impact factor, relative <strong>and</strong> absolute number of citation <strong>and</strong> frequency. From the graph’s rank order,<br />
we can see that Physician, Nurse, Patient, Healthcare organisation <strong>and</strong> Clinician are the top five most<br />
important stakeholders.<br />
Furthermore, Figure 5 illustrates the importance of stakeholders on the basis of impact factor <strong>and</strong><br />
relative <strong>and</strong> absolute number of citation. We can see that Nurse, Physician, Patient, Healthcare<br />
organisation <strong>and</strong> User are the top five most important stakeholders. Since these two graphs are the<br />
result of a weighted average calculation; the importance of these 17 stakeholders can be inferred<br />
from Figure 4 <strong>and</strong> Figure 5.<br />
56
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
In addition, Figure 6 illustrates the difference between those two analyses of importance. From Figure<br />
6, it is clear that Physician, Patient, Nurse, Clinician <strong>and</strong> IT/IS department or developer are the top<br />
five stakeholders which have large differences between the two analyses of importance. Interestingly,<br />
IT/IS department <strong>and</strong> developer emerge as stakeholders with large difference (Figure 6) despite not<br />
emerging as the top five of important stakeholders in both importance analysis (Figure 4 <strong>and</strong> Figure<br />
5).<br />
Physician<br />
Nurse<br />
Patient<br />
Healthcare organisation<br />
Clinician<br />
User ‐ undefined<br />
IT/IS department/developer related<br />
Staff<br />
Assistant related position<br />
Client<br />
Head of clinic/laboratory manager<br />
Clinical researcher/hospital scientist<br />
Top management<br />
General Practitioner (GP) /Doctor<br />
Medical student<br />
Head of division/manager<br />
Community/external<br />
Figure 4: Stakeholders stacked bar<br />
Nurse<br />
Physician<br />
Patient<br />
Healthcare organisation<br />
User ‐ undefined<br />
Clinician<br />
Staff<br />
Assistant related position<br />
Top management<br />
IT/IS department/developer related<br />
Client<br />
Clinical researcher/hospital scientist<br />
Head of clinic/laboratory manager<br />
General Practitioner (GP) /Doctor<br />
Medical student<br />
Head of division/manager<br />
Community/external<br />
0 5 10 15 20 25 30 35 40<br />
Frequency Absolute no. of cited Relative no. of cited Impact factor<br />
0 2 4 6 8 10 12 14 16<br />
Absolute no. of cited Relative no. of cited Impact factor<br />
Figure 5: Stakeholders stacked bar without frequency<br />
57<br />
18
Physician<br />
Patient<br />
Nurse<br />
Clinician<br />
IT/IS department/developer related<br />
Healthcare organisation<br />
General Practitioner (GP) /Doctor<br />
User ‐ undefined<br />
Head of clinic/laboratory manager<br />
Head of division/manager<br />
Medical student<br />
Assistant related position<br />
Staff<br />
Clinical researcher/hospital scientist<br />
Client<br />
Community/external<br />
Top management<br />
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
0 2 4 6 8 10 12 14 16 18 20<br />
Difference<br />
Figure 6: Difference between stacked bar with <strong>and</strong> without frequency (stakeholders)<br />
Analysis of the evaluative dimensions<br />
Many evaluative dimensions were revealed throughout the study. 28 categories were identified their<br />
definitions summarised. Sorted by their importance (Figure 7), these evaluative dimensions are:<br />
Usage, Satisfaction, Time related, Usability, Data or information quality, Organisation, Human,<br />
Technology, Medical outcome, Service quality/quality of care, Cost related, Performance, Quality of<br />
life (QOL), Functionality, Efficiency, Technical specification/requirement, Acceptance or attitude,<br />
Accurateness, Guidelines accordance, Effectiveness, Automation, Reliability, <strong>Knowledge</strong> related,<br />
Usefulness, Operational, External, Strategic, <strong>and</strong> Managerial.<br />
Figure 7 <strong>and</strong> Figure 8 compare contribution of number of citation, impact factor <strong>and</strong> frequency across<br />
every category of evaluative dimensions. For comparison of these figures, Figure 9 illustrates the bar<br />
chart of score difference from these two stacked bars across every category of evaluative dimensions.<br />
All bar charts are sorted in descending order. Figure 7 shows the importance of evaluative dimensions<br />
based on impact factor, relative <strong>and</strong> absolute number of citation <strong>and</strong> frequency. From the graph’s rank<br />
order, we can see that Usage, Satisfaction, Time related, Usability <strong>and</strong> Data/information quality are<br />
the top five most important evaluative dimensions.<br />
Furthermore, Figure 8 illustrates the importance of evaluative dimensions on the basis of impact factor<br />
<strong>and</strong> relative <strong>and</strong> absolute number of citation. We can see that Usage, Data/information quality, Time<br />
related, Quality of life (QOL) <strong>and</strong> Human are the top five most important evaluative dimensions. Since<br />
these two graphs are the result of a weighted average calculation, the relative importance of these 28<br />
evaluative dimensions can be inferred from Figure 7<strong>and</strong> Figure 8.<br />
58
Managerial<br />
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
Usage<br />
Satisfaction<br />
Time related<br />
Usability<br />
Data/information quality<br />
Organisation<br />
Human<br />
Technology<br />
Medical outcome ‐ desired/undesired<br />
Service quality/quality of care<br />
Cost related<br />
Performance<br />
QOL<br />
Functionality<br />
Efficiency<br />
Technical specification/requirement<br />
Acceptance/attitude<br />
Accurateness<br />
Guidelines accordance<br />
Effectiveness<br />
Automation<br />
Reliability<br />
<strong>Knowledge</strong> related<br />
Usefulness<br />
Operational<br />
External<br />
Strategic<br />
Figure 7: Evaluative dimensions stacked bar<br />
Usage<br />
Data/information quality<br />
Time related<br />
QOL<br />
Human<br />
Satisfaction<br />
Performance<br />
Service quality/quality of care<br />
Functionality<br />
Technology<br />
Usability<br />
Organisation<br />
Efficiency<br />
Technical specification/requirement<br />
Medical outcome ‐ desired/undesired<br />
Automation<br />
Guidelines accordance<br />
Acceptance/attitude<br />
Accurateness<br />
Cost related<br />
Usefulness<br />
Reliability<br />
<strong>Knowledge</strong> related<br />
Effectiveness<br />
Operational<br />
Strategic<br />
Managerial<br />
External<br />
0 5 10 15 20 25 30 35 40<br />
Frequency Absolute no. of cited Relative no. of cited Impact factor<br />
0 5 10 15 20 25 30<br />
Absolute no. of cited Relative no. of cited Impact factor<br />
Figure 8: Evaluative dimensions stacked bar without frequency<br />
In addition, Figure 9 illustrates the difference between those two analyses of importance. From Figure<br />
9, we can see that Cost related, Usability, Medical outcome, Organisation <strong>and</strong> Satisfaction are the top<br />
five evaluative dimensions which have large difference between the two analyses of importance.<br />
Interestingly, Cost related <strong>and</strong> Medical outcome emerge as evaluative dimensions with large<br />
59
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
difference (Figure 9) despite not emerging as the top five of important evaluative dimensions in both<br />
importance analysis (Figure 7 <strong>and</strong> Figure 8).<br />
Cost related<br />
Usability<br />
Medical outcome ‐ desired/undesired<br />
Organisation<br />
Satisfaction<br />
Time related<br />
Acceptance/attitude<br />
Technology<br />
Usage<br />
Effectiveness<br />
Accurateness<br />
Efficiency<br />
Data/information quality<br />
Service quality/quality of care<br />
Technical specification/requirement<br />
Human<br />
Guidelines accordance<br />
Functionality<br />
Reliability<br />
Performance<br />
<strong>Knowledge</strong> related<br />
External<br />
Operational<br />
Usefulness<br />
Strategic<br />
QOL<br />
Managerial<br />
Automation<br />
0 2 4 6 8 10 12 14 16 18<br />
Difference<br />
Figure 9: Difference between stacked bar with <strong>and</strong> without frequency (evaluative dimensions)<br />
5. Discussion<br />
In this section we will discuss findings of the stakeholders <strong>and</strong> evaluative dimensions revealed by our<br />
systematic literature review.<br />
In general, there is insufficient scholarly attention being paid to the derivation of guidelines to assist<br />
stakeholders in evaluating ICT investments. The guidelines that consist of detailed study protocol of<br />
all the decisions <strong>and</strong> steps might provide benchmark for other researcher in conducting further<br />
evaluation. These guidelines are beneficial for allowing others to learn <strong>and</strong> to develop the framework<br />
as well as to test the robustness of its applicability (Ammenwerth et al., 2003).<br />
5.1 Progress of ICT evaluation in healthcare: construct diversity <strong>and</strong> methodological<br />
pluralism<br />
Evaluation method of ICT investment in the healthcare context is influenced by conventional medical<br />
research. The golden st<strong>and</strong>ard for assessing medical interventions is the R<strong>and</strong>omised Controlled Trial<br />
(RCT) which is also used in evaluating ICT investment in healthcare sector (Berg, 2004). Examples<br />
include the studies of Apkon et al. (2005), Fung (2006) <strong>and</strong> May, Mort, Williams, Mair, & Gask (2003).<br />
Quantitative evaluation methods have been dominant for a period of 20 years (Ammenwerth <strong>and</strong> de<br />
Keizer, 2005). Yet, in spite of its prevalence, the RCT design is unsuitable for explaining why <strong>and</strong> how<br />
certain ICT is being used (Stoop, 2005). Isolating information system’s component <strong>and</strong> its social<br />
interaction, likewise introducing new medical intervention or new medicine, is dubious, labour<br />
intensive <strong>and</strong> expensive method (Berg, 2004). The earlier studies of evaluation in medical informatics<br />
tended to lean towards the use of quantitative method <strong>and</strong> measurement.<br />
60
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
Approaches that analyse qualitative data are needed to measure intangible benefits <strong>and</strong> explain<br />
social phenomena. In later development, there is a greater consideration for the social <strong>and</strong><br />
organisational aspects in evaluation studies <strong>and</strong> to incorporate specific measures such as<br />
technological, human <strong>and</strong> organisational issue in the evaluation process (Yusof et al., 2008,<br />
Oroviogoicoechea et al., 2008, de Keizer <strong>and</strong> Ammenwerth, 2008). In spite of this urgency, the quality<br />
of RCT’s publications was significantly higher than the quality of non-RCT studies which comprise<br />
70% of the overall studies (de Keizer <strong>and</strong> Ammenwerth, 2008). Moreover, review made by Rahimi &<br />
Vimarlund (2007) showed that despite the recent dominance of economic <strong>and</strong> organisational aspects<br />
in the evaluation of health information system, we are still missing a st<strong>and</strong>ard framework for<br />
evaluating effects <strong>and</strong> outputs of implementation <strong>and</strong> use of ICT in the healthcare context.<br />
Furthermore, various notions of value emerge from the research. Benefit is the notion value used<br />
mostly in the articles. Benefit refers to all positive consequences of an IS investment as the antonym<br />
of sacrifices (Renkema <strong>and</strong> Berghout, 1997). These various notions of value imply that there are<br />
many perspectives available to the researcher in evaluating ICT investments within the healthcare<br />
setting. The progression of evaluation method shows a shifting from <strong>using</strong> single quantitative or<br />
qualitative method to a combination approaches or triangulation to encompass more comprehensive<br />
output. Recent studies have begun to employ diversity of constructs <strong>and</strong> measurement techniques to<br />
meet the challenges of RCT method, such as <strong>using</strong> combination of method or multi approaches in<br />
their evaluation process.<br />
5.2 Stakeholders in healthcare settings: Involvement <strong>and</strong> importance<br />
From Figure 4, the analysis shows that Physician, Nurse, Patient, Healthcare organisation <strong>and</strong> User<br />
are the top five most important stakeholders. In addition, Clinician <strong>and</strong> User have somewhat similar<br />
ranking based on Figure 4 <strong>and</strong> Figure 5. Physician <strong>and</strong> Nurse, as part of healthcare team, have an<br />
influential role to play in healthcare spending decisions. It is invaluable to underst<strong>and</strong> their<br />
involvement as subjects conducting medical practice <strong>and</strong> as users utilizing specific ICT for medical<br />
treatment or medical administration.<br />
Inevitably, patients, as one of the important stakeholders is the object of medical treatment as well as<br />
the subject or ‘customer’ of health organisation, also take as the user of technology in certain<br />
healthcare setting. Health organisation as important stakeholder means that the management which<br />
is providing <strong>and</strong> delivering service to ‘customer’ (patient <strong>and</strong> client) should be involved in assessing<br />
the worthiness of ICT investments. The stakeholders that emerged based on these two analyses are<br />
physician, nurse, patient <strong>and</strong> healthcare organisation. These four stakeholders should be highly<br />
involved in evaluating ICT investment in the healthcare setting.<br />
However, these four stakeholders are not necessarily involved in the ICT evaluation process for<br />
specific types of technologies <strong>and</strong> healthcare settings (Cariello, 2003, Fung, 2006, Kaur et al., 2004,<br />
Kilbridge et al., 2006, Lorence <strong>and</strong> Greenberg, 2006, Ramnarayan et al., 2006, Thompson et al.,<br />
2003, Zheng et al., 2005, Beuscart-Zephir et al., 2005, Harison <strong>and</strong> Berghout, 2006). For example,<br />
evaluation of computerised templates in primary care only involved clinician whereas the comparison<br />
of paper-based form with computer-based evaluation only involved the tele-rehabilitation coordinator<br />
<strong>and</strong> the research assistant.<br />
Interestingly, despite a general belief that IT/IS department should be involved in evaluation of ICT<br />
investment, IT/IS department appears to be rarely consulted.<br />
5.3 Evaluative dimensions of ICT Investment in healthcare<br />
From Figure 7, the analysis shows that Usage, Satisfaction, Time related, Usability are four most<br />
important evaluative dimensions. Data or information quality <strong>and</strong> organisation have a similar rank.<br />
Usage, usability <strong>and</strong> user satisfaction are related each other in showing the worthiness of ICT<br />
investments. System with higher usage usually implies its usability <strong>and</strong> satisfaction.<br />
High vigilance coupled with strong pressure in the healthcare sector dem<strong>and</strong>s fast <strong>and</strong> accurate<br />
information. Consequently, time related, data/information quality <strong>and</strong> quality of life emerged as<br />
important evaluative dimensions. Timed related dimension is important since most activity <strong>and</strong><br />
process in the healthcare sector require agility; ICT should help in achieving better time compare to<br />
the old process. Data/information quality dimension is important since problem that relates to life or<br />
death dem<strong>and</strong>s accurateness <strong>and</strong> reliable information as the basis for deciding medical treatment.<br />
61
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
Through this medical treatment, ICT should have significant role in increasing the patient’s Quality of<br />
life (QOL).<br />
The graphs show that Satisfaction, Usability <strong>and</strong> Organisation have lower importance when frequency<br />
is omitted from the analysis (Figure 8). Conversely, Quality of life (QOL) <strong>and</strong> Human category emerge<br />
as important evaluative dimensions (Figure 8). From the difference analysis (Figure 9), it seems that<br />
many researchers used Medical outcome <strong>and</strong> Cost related category to evaluate ICT investments;<br />
however, these two dimensions get lower ranking of importance when frequency is omitted from the<br />
analysis. Medical outcome is a well-establish evaluative dimension to evaluate medical intervention<br />
such as the new introduction of new drugs or new medical treatment. It is possible that this<br />
phenomenon is caused by the progression of evaluation method. Likewise, the cost related as<br />
evaluative dimension is frequently mentioned in many researches. A possible explanation to this<br />
phenomenon is that the importance of cost is highly recognised; however, specific cost such as<br />
adverse drug event (ADE) is more difficult to measure. Moreover, there is also a possibility that many<br />
healthcare organisations are government funded institutions.<br />
Organisation, human, <strong>and</strong> technology perspective emerged as important dimensions which show the<br />
potential direction of evaluating ICT in healthcare. The complete set of evaluative dimensions for<br />
general type of ICT <strong>and</strong> healthcare setting are Usage, Satisfaction, Time related, Usability, Data or<br />
information quality, Organisation, Quality of life (QOL), Human <strong>and</strong> Technology.<br />
5.4 Distinctive contextual characteristics of the healthcare sector<br />
The healthcare service is highly related to the well being of patients as the customers, which make the<br />
outcome is less predictable. Patient’s safety should then be the foremost concern for healthcare<br />
organizations. Patient’s safety is accomplished by both minimising errors <strong>and</strong> adverse effects <strong>and</strong><br />
enhancing medication processes.<br />
Sistrom (2005) described healthcare as a labour-intensive sector where by the work process is more<br />
cognitive than physical. This process, which involves patients together with patient families, medical<br />
professions <strong>and</strong> administrative personnel, creates a complex, a highly structured <strong>and</strong> quite a<br />
heterogeneous culture. Therefore, Sistrom (2005) argued that ICT tends to disrupt existing social<br />
structure as well as established clinical practice <strong>and</strong> core work process by reengineering the cognitive<br />
process <strong>and</strong> the social structure of the healthcare profession. This problem will lead to dissatisfaction<br />
<strong>and</strong> resistance. An example of resistance occurring in a university medical centre was presented by<br />
Lorenzi et al. (1997). The new technology encountered challenges as it disturbed <strong>and</strong> forced changes<br />
to established processes <strong>and</strong> practice routines. That is, medical staff sees the technology as the<br />
enforcement of will <strong>and</strong> value by the management.<br />
The healthcare sector is considered a complex <strong>and</strong> a multi-stakeholder environment with a split<br />
decision-making organisation. Lorenzi et al. (1997) mentioned several reasons why healthcare is a<br />
complex service organisation. Based on Mintzberg’s type of organisations, they argued that the<br />
healthcare organisation is a combination of a federal structure (i.e. homogenous with regional unit), a<br />
machine bureaucracy (i.e. top formal process controlled), a professional bureaucracy (i.e.<br />
autonomously professional activities with professional value <strong>and</strong> culture controlled), <strong>and</strong> a networked<br />
organisation (i.e. independent individuals <strong>and</strong> sub-organisations that link each other for a certain<br />
objective or task) (see also Southon et al, 1999).<br />
The healthcare sector is also encouraged to share knowledge due to the knowledge intensive<br />
characteristic of the organisation. The knowledge sharing in a knowledge intensive environment will<br />
support better decision making among medical professions in one organisation <strong>and</strong> between<br />
organisations in the healthcare sector. Evaluating healthcare information system through an<br />
enterprise perspective will encounter difficulties in this multi-stakeholder environment (Connell <strong>and</strong><br />
Young, 2007).<br />
6. Conclusions <strong>and</strong> recommendations<br />
A gradual progression from conventional st<strong>and</strong>ard of RCT to mixed-methods <strong>and</strong> triangulation<br />
indicates a trend <strong>and</strong> growing dem<strong>and</strong> for multidisciplinary ICT evaluation frameworks. There is a<br />
challenge to build more robust <strong>and</strong> comprehensive evaluation process. One alternative way is by<br />
62
A. Arviansyah, Egon Berghout <strong>and</strong> Chee-Wee Tan<br />
incorporating a multidisciplinary team of evaluator which might reveal diverse insight as well as enrich<br />
the underst<strong>and</strong>ing of healthcare contextual situation.<br />
Determination of success <strong>and</strong> failure in ICT investment project would depend on how stakeholders<br />
define their needs <strong>and</strong> perceptions of the technology <strong>and</strong> how evaluator elicits them by <strong>using</strong> the<br />
evaluative dimensions. Therefore, evaluator should clearly identify the key stakeholders as well as<br />
utilize proper evaluative dimensions. The identified stakeholders <strong>and</strong> evaluative dimensions in this<br />
study represent the core elements to be incorporated into ICT evaluations in healthcare such that<br />
evaluations can be undertaken in an informative <strong>and</strong> purposeful fashion.<br />
Furthermore, as the distinctive contextual characteristics of the healthcare sector might influence<br />
organizations’ choice of evaluation constructs <strong>and</strong> measurement methods, future investigations are<br />
needed to decipher their impact on ICT evaluations in healthcare.<br />
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64
The Uses of Business Outcomes for IT Benefit<br />
Identification at the Ex-Ante Justification Stage<br />
Dawit Asmelash<br />
University of Pretoria, South Africa<br />
dawit.asmelash@up.ac.za<br />
Abstract: The benefits of IT are becoming the main determining factors for selecting projects at the ex-ante<br />
justification stage. Despite the high adoption rates of formal IT investment appraisal methods, there is on-going<br />
evidence that shows that the benefits go unrecognized or are poorly identified. This paper highlights the<br />
importance of defining business <strong>and</strong> IT goals, <strong>and</strong> developing indicators that describe how these goals can be<br />
achieved. These indicators are expected to be used in formulating business outcomes that can in turn be utilized<br />
to appropriately identify IT benefits. The aims of this paper are threefold: 1.To explore the uses of business <strong>and</strong><br />
IT goals, <strong>and</strong> their possible outcome measures, paying particular attention to why it is justified to be adopted to<br />
benefit evaluation; 2. To provide a description of, <strong>and</strong> justification for, the benefit identification method that is<br />
developed; 3. To provide an assessment of the effectiveness of this method. Case study research is presented<br />
that illustrates this. The case study was conducted in a large academic institution to explore the benefit<br />
identification process <strong>and</strong> middle business managers that are involved <strong>and</strong> responsible for IT project justification<br />
were approached from various business units as case study participants. This paper shows how the relationship<br />
between business goals, IT goals <strong>and</strong> IT process goals may be utilized to formulate the business outcomes that<br />
may subsequently be used in the IT project benefits identification process. Hence, a method that has adopted<br />
this approach is proposed for identifying potential benefits at ex-ante justification stage. This method has been<br />
found to be helpful in maintaining the benefits agenda during the justification process <strong>and</strong> for enhancing the<br />
business mangers’ underst<strong>and</strong>ing of the benefit concepts. It has also resulted in numerous other possible<br />
benefits that are specific <strong>and</strong> true to the initiatives being identified. The paper provides plausible insights for IT<br />
project evaluation research in the quest for improving benefit evaluation.<br />
Keywords: IT benefits, business outcome, IT benefits identification, ex-ante justification<br />
1. Introduction<br />
Organizations frequently invest considerable amount of resources in IT projects that ultimately fail to<br />
deliver any appreciable benefits. IT project success is increasingly being defined as realizing the<br />
expected benefits rather than completing the projects on time within the allocated budget (Berman,<br />
2007; Thorp, 2004). The process of selecting IT initiatives that will contribute comparatively more<br />
benefit to the organization than those not selected, requires that both business <strong>and</strong> IT management to<br />
identify <strong>and</strong> define these benefits as accurate as possible.<br />
The established business principle suggests that during the initial evaluation of IT initiatives (ex-ante<br />
justification stage), IT initiatives that have high expected business benefits should be given high<br />
ranking <strong>and</strong> selected for development (ITGI, 2008a; Thorp, 2007; Farbey, et al., 1999). However<br />
many organizations struggle to identify <strong>and</strong> measure benefits effectively (ITGI, 2008a; Lin et al.,<br />
2005). For example, an empirical investigation preformed on 102 organizations in the UK <strong>and</strong> Benelux<br />
show that fewer than 35% of respondents claim to be successful in identifying available benefits for a<br />
project <strong>and</strong> only 31% believe they quantify the benefits adequately (Ward et al., 2007).<br />
The main reason that benefits are identified <strong>and</strong> measured seems to be to gain project approval<br />
(Ward et al., 2007; Lin et al., 2005). It is accepted by researchers <strong>and</strong> practitioners that IT benefits<br />
evaluation has become a key business management issue (Ward & Daniel, 2006; Thorp, 2004;<br />
Murphy, 2002). Business management is assumed to underst<strong>and</strong> the impact of IT projects in their<br />
business <strong>and</strong> are, therefore, usually given the responsibility for identifying <strong>and</strong> measuring the benefits<br />
at the ex-ante justification stage (ITGI, 2008b, Dhillon, 2000).<br />
Formal IT investment appraisal methodologies are commonly adopted by organizations (Ward et al.,<br />
2007; Lin et al., 2005). Nevertheless, organizations often fail to identify <strong>and</strong> define benefits<br />
appropriately or to measure their contributions to the organization (Peppard et al., 2007; Cronk <strong>and</strong><br />
Fitzgerald, 2002; Remenyi <strong>and</strong> Sherwood-Smith, 1999); <strong>and</strong> as a result incorrect benefits may be<br />
attributed to the projects or the measurements may represent arbitrary values (Lin et al., 2007).<br />
According to ITGI (2008a), these imprecise benefits statements may lead to an allocation of<br />
resources to projects that may not support the organization strategy.<br />
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Dawit Asmelash<br />
The benefits of IT can be described <strong>using</strong> the logic <strong>and</strong> concepts of business goal, business change<br />
<strong>and</strong> business outcome (Ward & Elvin, 1999). However, in many organizations benefit identification<br />
<strong>and</strong> measurement is often ignored or carried out inefficiently or ineffectively because it is deemed to<br />
be an elusive <strong>and</strong> complex process (Serafeimidis & Smithison, 2003). According to Berghout <strong>and</strong><br />
Remenyi (2005) increased practical adoption <strong>and</strong> improvement of benefits evaluation methods is<br />
needed to resolve some of the issues raised by research into IT evaluation. This study addresses the<br />
challenges related to identifying benefits at ex-ante justification stage by adapting IT control<br />
framework concepts in order to formulate business outcomes for practical use in the organization.<br />
Benefit identification for evaluation is a good example of a substantial gap that exists between<br />
academic theory, commercial methodology <strong>and</strong> actual management practice. Consequently, a<br />
contribution is needed that presents insights into how benefits-oriented practices might best be<br />
utilized <strong>and</strong> incorporated into organizational contexts (Berghout & Remenyi, 2005). Moreover, work<br />
that presents insights into how potential benefits from IT initiatives are identified at the ex-ante<br />
justification stage will be valuable.<br />
Case study research was done <strong>using</strong> the relationship concept of business goal, IT goal <strong>and</strong> outcomes<br />
to develop new benefit identification method for ex-ante project evaluation, <strong>and</strong> to explore how it can<br />
be best applied in the business context. The paper is organized into three further parts. First, it<br />
reviews the existing research literature related to IT benefits. The research methodology adopted for<br />
the empirical part of the research is then outlined. Finally, the theoretical <strong>and</strong> practical implications of<br />
the proposed method are explored, paying particular attention to insights that might be useful to<br />
improve benefit evaluation in the future.<br />
2. Literature review<br />
This section reviews the concepts related to the business benefits of IT so as to clarify the nature <strong>and</strong><br />
characteristics of IT benefits with respect to the application of a benefit identification method. The<br />
literature study will assist in developing a practical IT benefits identification method by applying<br />
theoretical knowledge.<br />
IT benefit is defined as a business outcome whose nature <strong>and</strong> value expressed in various ways are<br />
considered advantageous to an organization (Thorp, 2007). Ward <strong>and</strong> Elvin (1999) associate<br />
business outcomes with a needed business change <strong>and</strong> consider benefit as the effect of the changes.<br />
A business outcome can result in benefit, if it is aligned <strong>and</strong> supports the organization’s goals (ITGI,<br />
2008a; Ward & Daniel, 2006).<br />
The implementation of IT projects <strong>and</strong> the subsequent process of change resulting in benefits<br />
comprise key concepts of IT benefit <strong>and</strong> they can be used to characterize <strong>and</strong> describe the nature of<br />
specific benefits. These key concepts are briefly described below:<br />
Business objectives: The goals, strategies or tactics that the IT project addresses (Fulton,<br />
2004).<br />
Implementation/Intervention: The technical <strong>and</strong> business design, deployment <strong>and</strong> operation<br />
(Fulton, 2004).<br />
Business Change: the difference between the current <strong>and</strong> desired state that IT is intended to<br />
enable (Ward <strong>and</strong> Elvin, 1999).<br />
Area of impact: The business process or individuals that IT targets in order to affect or enable<br />
change (Dhillon, 2004).<br />
Directness of impact: IT may have direct <strong>and</strong> first order effect or indirect <strong>and</strong> second order effect<br />
(Remenyi <strong>and</strong> Sherwood-Smith, 2001).<br />
Certainty of the impact: The impact of new system may be almost completely predictable or<br />
totally uncertain. This depends on clarification of the area of impact <strong>and</strong> the cause of change<br />
(Farbey et al., 1993).<br />
Indicators of the effect: The effects of change are assessed with process improvement<br />
indicators that relate to efficiency, effectiveness, performance <strong>and</strong> transformation (Berman, 2007;<br />
Thorp, 2007; Murphy, 2002; Andresen et al., 2000).<br />
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Measurability of the effects: Benefits arising from IT are often described as either tangible or<br />
intangible (Ward <strong>and</strong> Daniel, 2006).<br />
Business outcome: IT projects have outcomes but not all outcomes result in benefits. Thus,<br />
successfully achieving the business objectives should be distinguished as positive outcome<br />
(Peppard, et al., 2007). The concept of “positive outcome” is one of the main characteristics of IT<br />
benefits.<br />
A better underst<strong>and</strong>ing <strong>and</strong> application of these concepts allows properly recognizing <strong>and</strong> identifying<br />
the business benefits of an IT project. Major factors contributing to the difficulty of evaluating IT<br />
benefits are IT reach <strong>and</strong> unidentifiable improvements (Remenyi, 2000). Benefits reside in the<br />
changes IT has enabled in the organization. Therefore, to identify more benefits an IT initiative<br />
produce, it is important to recognize where the intended changes are taking place <strong>and</strong> their ripple<br />
effects in the organization.<br />
The business benefits of IT can be grouped on the impact IT has on each typical business units of the<br />
organization such as sales, human resources, finance, manufacturing <strong>and</strong> so forth (Andresen et al.,<br />
2000) <strong>and</strong> they can be classified based on the level of business process or affected individuals in the<br />
organization hierarchy <strong>and</strong> structure (Farbey et al., 1993). This enables to easily recognize <strong>and</strong><br />
structure the benefits (Ward <strong>and</strong> Daniel, 2006; Irani <strong>and</strong> Love, 2001). Moreover, Lindfors’ (in Dehlin<br />
<strong>and</strong> Olofsson, 2008) modification of the DeLone <strong>and</strong> McLean’s model of information system success<br />
categories (2002) with adjacent benefit variables, allows a deeper level of underst<strong>and</strong>ing to be<br />
brought to the identification of specific benefits (Dehlin <strong>and</strong> Olofsson, 2008).<br />
Assessing how IT meets business objectives is seen crucial for benefits identification. Thus, an<br />
approach that renders better formulation <strong>and</strong> use of positive outcome is the area in which this<br />
research attempts to explore.<br />
3. The empirical research<br />
The aim of this section is to briefly describe the research context, the study’s objectives, <strong>and</strong> the<br />
research methodology utilized.<br />
3.1 The context<br />
The organization is an academic institution – one of the leading universities in Africa, with more than<br />
40 000 IT users that include staff, customers <strong>and</strong> students. The university’s IT service department (IT<br />
management) has proposed an “IT projects prioritization method” that is intended to be effective when<br />
ranking <strong>and</strong> selecting IT initiatives for development. The IT project prioritization method currently used<br />
is adopted from Gartner’s project portfolio management processes (Apfel, 2007), <strong>and</strong> Tony Murphy’s<br />
(2002) practical guide for achieving business value, <strong>and</strong> is intended to provide an adequate basis for<br />
IT investment decisions.<br />
The benefits of IT are used to evaluate potential discretionary IT initiatives. The IT service department<br />
has designed six assessment criteria perspectives to evaluate IT project benefits <strong>and</strong> to improve<br />
judgment when selecting IT requests for development (Murphy, 2002).<br />
The business management members in each business unit of the organization are expected to<br />
complete the strategic alignment, business process impact, project direct payback, <strong>and</strong> institutional<br />
risk portion of the assessment criteria. The business management, as IT requesters <strong>and</strong> evaluators<br />
are expected to identify <strong>and</strong> define their own functional process that they expect will be improved by<br />
the IT initiative. After identifying the business process they are expected to describe the associated<br />
business process improvement <strong>and</strong> expected change.<br />
However, the actual justifications from business management show that many benefits go<br />
unrecognized or are poorly identified at the time of making a decision on the initiatives. Consequently,<br />
there is a clear requirement for a new practical approach or set of guidelines, <strong>and</strong> this has become<br />
the focus for the research described in the paper. More specifically, the following two research<br />
objectives have been established:<br />
To explore on the formation of business outcomes that can best be applied at the ex-ante<br />
justification stage in the organization.<br />
To provide an assessment of the effectiveness of a business outcome based method.<br />
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In addressing these objectives, it was envisaged that this paper could make an important contribution<br />
to the literature by providing an insight into benefits identification practices at the ex-ante stage.<br />
3.2 Methodology<br />
As already explained, the aim of this research is to propose a positive business outcome oriented<br />
operational method that is expected to result in better identification of IT benefits at the justification<br />
stage. Therefore, exploratory <strong>and</strong> qualitative research was conducted in order to develop <strong>and</strong> refine<br />
operational methods (Oats, 2006). Qualitative research is appropriate for research undertaken in a<br />
social setting, <strong>and</strong> designed to underst<strong>and</strong> people’s motivation <strong>and</strong> actions, <strong>and</strong> the broader business<br />
contexts (Oats, 2006).<br />
A single case study approach has been adopted (Yin, 2003) as this research seeks to underst<strong>and</strong> in<br />
depth the organization’s business specific benefits <strong>and</strong> the process of identifying them <strong>and</strong> to obtain<br />
rich <strong>and</strong> detailed insights into the reality of the organization in its context. The chosen case is typical<br />
of many others in that the identification of IT benefit is only performed in order to justify IT initiatives<br />
for approval <strong>and</strong> the problem of ineffective benefit identification is commonplace as is the case in<br />
many other organizations. Therefore the organization st<strong>and</strong>s as a representative case.<br />
Case study research requires multiple sources of empirical evidence (Yin, 2003). When conducting<br />
this case study, the following data collection techniques were employed:<br />
Interviews: Formal interviews <strong>and</strong> informal discussion were conducted with middle managers from 11<br />
business units that were involved <strong>and</strong> responsible in the justification process. The main objectives of<br />
the formal interviews were twofold: 1 to underst<strong>and</strong> <strong>and</strong> identify areas where the current process<br />
needs improvement paying attention to a business outcome oriented approach; 2 to gain feedback on<br />
the applicability of the proposed improvements that has adopted this approach. Several informal<br />
discussions were also conducted with IT service department senior managers to obtain a deeper<br />
underst<strong>and</strong>ing of the organizational context <strong>and</strong> the IT initiative justification process.<br />
Documents reviews: The organization at which this study was carried out, produced documents that<br />
were useful sources of data. The documents contain the formal records of business units’<br />
justifications for every IT initiatives. The IT request form as a document object has been modified for<br />
business outcome oriented approach in order to be used as an instrument for justification. This<br />
instrument was analysed to determine its effectiveness <strong>and</strong> to identify areas where it needs attention<br />
for improvement.<br />
The research used a well-defined protocol; the case study method complies with the basic tenets of a<br />
systematic method (Myers, 2009; Yin, 2003).<br />
4. Research findings<br />
The presentation of the research findings is structured around the two specific research objectives, as<br />
previously highlighted.<br />
4.1 Business outcome derivation<br />
The identification of IT benefits is very challenging at the ex-ante justification stage. The Val IT<br />
framework (ITGI, 2008) stated that, in order to establish a specific IT requirement that supports<br />
business, business management must first define the business goal. The relationship between the<br />
business goal <strong>and</strong> outcome is an important basis to identify <strong>and</strong> define potential benefits at the exante<br />
evaluation stage. This relationship concept is adopted from COBIT Framework 4.1 (ITGI, 2007)<br />
which is probably the best established control framework for IT governance, <strong>and</strong> it is particularly<br />
useful in this study for formulating the business outcomes.<br />
This study first modified <strong>and</strong> applied the business goal, IT goal <strong>and</strong> outcome indicators relationship<br />
concept for benefit evaluation research. The relationship between business goal, IT goal, outcome,<br />
<strong>and</strong> performance indicators is laid down in Figure 1.<br />
The business goal has on or more outcomes that will indicates whether the goal has been met (ITGI,<br />
2007). The outcomes are the effects of changes <strong>and</strong> relate to the expected improvements on the<br />
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Dawit Asmelash<br />
affected business process. Since the potential benefit emerges as a consequence of achieving the<br />
business goal, the relationship between business goal <strong>and</strong> expected outcomes can be used as a<br />
basis to recognize possible benefits.<br />
Potential<br />
benefit<br />
results<br />
derive<br />
Outcome<br />
Indicator<br />
Business<br />
Goal<br />
drives<br />
enables<br />
IT Solution<br />
Goal<br />
requires<br />
enables<br />
IT process<br />
Goal<br />
in<br />
di<br />
ca<br />
derive<br />
Outcome<br />
Indicator<br />
in<br />
di<br />
ca<br />
derive<br />
Outcome<br />
Indicator<br />
becomes<br />
becomes<br />
Performance Metric Performance Metric<br />
Figure 1: Modified business goal <strong>and</strong> outcome indicators relationship for benefit evaluation (adapted<br />
from ITGI, 2007)<br />
The “business goal” may require <strong>and</strong> initiate an IT solution (Ward <strong>and</strong> Elvin, 1999). The IT solution will<br />
enable changes to occur in the business processes. The IT solution establishes its own goal that aims<br />
to ensure the “business goal” will be achieved. The “IT solution goal” focuses on the impacts of the<br />
business. Therefore, the “IT solution goal” is driven <strong>and</strong> is subject to the “business goal”. The<br />
relationship between the “business goal” <strong>and</strong> proposed IT solution (intervention) should be clearly<br />
understood to define <strong>and</strong> validate the IT solution goal.<br />
The IT solution has processes that operate <strong>and</strong> make it a system. Each IT process also establishes<br />
its own goal. The “IT process goal” is to become effective <strong>and</strong> efficient to enable the “IT solution goal”<br />
is achieved. Therefore, the “IT solution goal” requires the “IT process goal” to succeed.<br />
The outcomes as discussed (in Section 2) are the effects of change. An indicator can be placed to the<br />
outcomes to describe whether the goals have been met (ITGI, 2007). Each goal has its own outcome<br />
indicator <strong>and</strong> performance metrics. Performance metrics indicate whether the business goals or IT<br />
solution goals are likely to be met (ITGI, 2007). Both outcome indicator <strong>and</strong> performance indicators<br />
have the same content <strong>and</strong> metric.<br />
The performance metric of the “IT solution goal” reveals how well the IT solution is performing in<br />
enabling the business goals to be achieved. In turn, the “outcome indicator” of the “business goal”<br />
indicates whether the goal is met <strong>and</strong> may indicate the potential benefit to be gained. There may be<br />
many discrete outcomes for a single business objective. The process of repetitively identifying <strong>and</strong><br />
defining new positive outcome of a particular initiative results in additional benefits that may raise the<br />
value of a particular initiative.<br />
The actual outcome <strong>and</strong> performance indicators (quantified) can be best made during ex-post benefit<br />
evaluation. However, the process of defining the business goal <strong>and</strong> qualitatively describing the<br />
outcome is necessary to identify the potential benefits that may be gained at the ex-ante stage of<br />
evaluation. The subsequent section discusses a new method that adopted this approach.<br />
4.1.1 IT benefits identification method at ex-ante justification stage<br />
A method is defined as “a well-defined sequence of elementary operations which permits the<br />
achievement of certain outcomes if executed correctly” (Iivari, Hirschheim <strong>and</strong> Klein, 1998: 165). The<br />
IT benefit identification method is a product of the concepts collected from a literature review <strong>and</strong> the<br />
empirical findings of this research. The proposed method consists of a sequence of activities that<br />
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Dawit Asmelash<br />
aims at achieving effective identification of IT benefits for evaluation in the organization. The findings<br />
are presented in the following steps:<br />
Step 1: Define a business objective that aligns with organization strategy (Business goal)<br />
The business unit first defines the business objective. The IT solution is needed to support the<br />
existing business plan or a new business plan should be introduced that will to take advantage of IT<br />
opportunities. The business unit plan is needed to derive intended outcomes.<br />
Step 2: Identify business problems or opportunities in a specific business unit<br />
This step focuses on the business management responsibility to clearly underst<strong>and</strong> <strong>and</strong> identify the<br />
problems (or opportunities) that necessitated the IT solution. Problem identification is essential as part<br />
of the process of identifying benefits (Changchit, 1998). This step allows the business management to<br />
indicate what changes are desired in the specific type of business (Andresen et al., 2000).<br />
Step 3: Identify area of impact <strong>and</strong> type of benefits<br />
Farbey et al.’s organizational hierarchy structure (1993) must be applied to identify the type of work<br />
<strong>and</strong> people that the IT initiatives are enabling or supporting. This step provides, with detail, the area of<br />
impact <strong>and</strong> where the change should take place. It will also indicate the nature of benefits that are to<br />
be expected (Irani <strong>and</strong> Love, 2001).<br />
Step 4: Define the area of impact<br />
The business plan <strong>and</strong> the problems identified point to the business process that needs to be<br />
targeted. The business process is the actual work activity or work flow that is carried out to achieve<br />
the business objective <strong>and</strong> plan. The process of change is expected to be carried out on this business<br />
process.<br />
Step 5: Identify the <strong>Information</strong> <strong>and</strong> Technology contribution (IT process outcomes)<br />
Once the area of impact has been identified the following step is to underst<strong>and</strong> how “information<br />
technology” enables the change in the business process. DeLone <strong>and</strong> McLean’s (2003) <strong>and</strong> Lindfors’<br />
(2003) dimensions of “<strong>Information</strong>”, ”System”, ”Process”, <strong>and</strong> “Support” were linked to specific area of<br />
impact to easily recognize possible benefit variables.<br />
Step 6: Define the expected business process change (IT solution goal)<br />
The desirable change that is expected in the business process or individual will be expressed in this<br />
step. The IT goal is to enable this change.<br />
Step 7: Describe the improvement (IT solution outcome)<br />
This step focuses on the business implication. The improvements in the business process will indicate<br />
the likelihood of achieving the business objectives. The “IT solution” outcomes are qualitatively<br />
described <strong>and</strong> are a list of diverse qualitative measures of the expected improvements. It may take<br />
the form of phrases that contain indicators such as “increase” or “more” related to specific<br />
performance or output. The “IT solution” outcomes can also show the likelihood of the business<br />
objective being met.<br />
Step 8: Ensure it is a positive outcome (Business outcome)<br />
The potential benefit that will emerge should be from the positive outcome of the business objective.<br />
The business outcome is expected to be related <strong>and</strong> be easily associated with the business objective.<br />
Consequently, an accurate (related) <strong>and</strong> specific benefit should arise. Again, it was found out it is<br />
appropriate to use descriptive statement. This descriptive qualitative statement by itself defines a<br />
specific benefit. An array of distinct benefits can be defined in this manner <strong>and</strong> listed.<br />
Step 9: Ensure the positive outcome relate to the business process<br />
The positive outcome that has been defined by following steps from 1 to 8 must be associated with<br />
the affected business process so as to ensure validity <strong>and</strong> accuracy of the benefit. The benefits that<br />
arise should be from the changes enabled by the IT project. If the IT initiatives is seen to have<br />
identifiable ripple effects (or in another business process), there will be another cycle starting back<br />
from step 3. If the positive outcomes are not clearly linked with the business process, it may lead to<br />
define inaccurate benefit.<br />
70
Business<br />
Units<br />
HR<br />
Sales<br />
Step 2<br />
Identify<br />
problems<br />
Step 9<br />
Ensure positive outcome link<br />
Organization<br />
Structure<br />
Strategic<br />
<strong>Management</strong><br />
Operational<br />
Functional<br />
Support<br />
Step 3<br />
Identify area of<br />
impact & type of<br />
benefits<br />
Dawit Asmelash<br />
Step 1<br />
Define objectives<br />
Expected Positive Outcome<br />
Business<br />
Process<br />
Step 4<br />
Define area of<br />
impact<br />
<strong>Information</strong><br />
&<br />
Technology<br />
<strong>Information</strong><br />
System<br />
Service<br />
Process<br />
Organization Strategy<br />
Step 5<br />
Identify IT<br />
contributions<br />
Business objectives<br />
Step 8<br />
Ensure it is a<br />
positive outcome<br />
Business<br />
change<br />
Step 6<br />
Define business<br />
Change<br />
Business<br />
process<br />
Improveme<br />
nts<br />
Step 7<br />
Describe<br />
improvement<br />
Figure 2: Proposed IT benefits identification method (author, 2011)<br />
An example extracted from the empirical data is presented in Table 1 to show the outputs derived<br />
from this method.<br />
Table 1: An initiative justification<br />
Steps Output<br />
-To improve research quality <strong>and</strong> productivity in the department<br />
1 & 2 -Not a conducive research environment; there is no advanced computational system<br />
<strong>and</strong> this affects research output.<br />
-Academic staff, researchers <strong>and</strong> students, Operational focus on efficiency <strong>and</strong><br />
3<br />
performance, more tangible<br />
4 -Econometric researching<br />
To perform z calculation with upmost accuracy. Expectations:<br />
-Increase in number of z st<strong>and</strong>ard output found complete<br />
5<br />
-Increase in number of z proved reliable<br />
-Less time to make z<br />
-More mathematical concepts incorporated<br />
6 In the researching environment, there will be capacity to compute advanced equations<br />
-Increases the chances for innovative mathematical theories to be applied<br />
-More advanced models will be tested <strong>and</strong> generated.<br />
7<br />
-Postgraduates skill will be enhanced.<br />
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Dawit Asmelash<br />
Steps Output<br />
8<br />
9<br />
Benefits<br />
-Increase number of requests for research-based consultation<br />
-More research projects will proceed<br />
-More papers will be accepted in international accredited journals<br />
All positive outcomes relate to the IT impact on “Research” process.<br />
Monetary or equivalent substitutions gained from the positive outcomes listed in step<br />
8.<br />
4.2 Assessment IT benefits identification method<br />
From a research perspective, the emphasis <strong>and</strong> use of the business outcomes indicators <strong>and</strong> the<br />
adoption of this approach is high among the research participants. This shows signs of success in<br />
identifying <strong>and</strong> describing specific <strong>and</strong> accurate potential benefits. However, this is not a definitive<br />
assessment <strong>and</strong> this method should be exercised <strong>and</strong> tested by the general population that will be<br />
involved in the justification process in the organization. The research will seek to validate the method<br />
in the coming justification season. It has been possible to develop the following provisional list of<br />
findings with respect to this benefit identification approach:<br />
This method requires evaluators (business management) to have an adequate underst<strong>and</strong>ing of<br />
the concepts of IT benefits, but this can be achieved through introducing a learning session.<br />
This method keeps benefits firmly on the agenda, whereas most IT requests in the past used to<br />
focus on expressing the severity of their problem as a justification for discretionary IT<br />
investments.<br />
This method makes it easy for the evaluators to underst<strong>and</strong> the nature of their expectations<br />
(benefits) <strong>and</strong> to identify other possibilities that can be harnessed from IT.<br />
In the successive engagement, almost all participants managed to identify numerous possible<br />
benefits (positive outcome descriptions) that are specific <strong>and</strong> accurate (true) to the initiatives.<br />
4.2.1 Proposed model for benefit identification at ex-ante justification stage<br />
The identification method steps from 1 to 9 in section 4.1.1 covers the relationship between the<br />
business goal <strong>and</strong> outcome descriptions. If this method is applied properly, it can be expected to<br />
provide better benefit identification for evaluation at the ex-ante justification process. Taking into<br />
account the effectiveness of the method among the research participants, this research proposes the<br />
following model for the organization.<br />
The relationship between business goal, IT goal <strong>and</strong> outcome discussed in section 4.1 has been<br />
modified with the support of the empirical findings. At this stage, the “IT solution goal” specifies the<br />
means of achieving the business goal. In turn, the IT solution goal “outcome description” lists<br />
expected IT achievements that indicates how the IT goal is going to be achieved. The IT solution<br />
“outcome description” also indicates whether the business goal is likely to be achieved.<br />
Potential<br />
benefit<br />
Results<br />
Business<br />
Goal<br />
derive<br />
Outcome<br />
Description<br />
drives<br />
enables<br />
IT Solution<br />
Goal<br />
derive<br />
Outcome<br />
Descriptio<br />
Figure 3: Model of benefit identification at ex-ante stage (source: Author, 2011)<br />
72
Dawit Asmelash<br />
In this case, at this stage most evaluators are from business management <strong>and</strong> may not have deep<br />
knowledge <strong>and</strong> are not IT experts. Therefore, the IT process goals <strong>and</strong> outcomes that describe in<br />
detail the technical quality of the system are removed. Moreover, since the IT initiatives are not<br />
operational at this stage, it is difficult to predict the actual output <strong>and</strong> trend of the activities. Therefore<br />
the performance indicators are also removed. The empirical findings also show signs that it is<br />
sufficient to use “Business outcome” <strong>and</strong> “IT solution outcome”.<br />
At the justification stage of the initiatives, <strong>and</strong> most importantly in the case of ex-ante evaluation,<br />
defining the business goal, IT goal <strong>and</strong> deriving the outcomes is crucial in order to appropriately<br />
define the benefits. Once the positive outcomes are described, the quantification or estimation may<br />
proceed.<br />
5. Concluding remarks<br />
We cannot evaluate benefits that we do not define. This research pursued an approach that puts<br />
much emphasis on business goal, IT goal <strong>and</strong> outcome relationships to improve the benefit<br />
identification process at the ex-ante stage. The research proposed a practical IT benefits identification<br />
method based on this approach to be applied as part of the justification process in the organization.<br />
Thus far, it has been found that the logical reasoning <strong>and</strong> the identification method are helpful as way<br />
to maintain focus on benefits in the justification process <strong>and</strong> to enhance the evaluators’ underst<strong>and</strong>ing<br />
of the benefit concepts. This in turn, has resulted in numerous possible benefits being identified that<br />
are specific <strong>and</strong> true to the initiatives. The author believes that the research made an academic<br />
contribution, as it adapted <strong>and</strong> applied control measure concepts in the benefit evaluation process at<br />
the ex-ante stage. Moreover, the research findings may be of interest to other IT practitioners who are<br />
also looking to better their benefit identification during their ex-ante justification process.<br />
References<br />
Andresen, J., Baldwin, A., Betts, M., Carter, C., Hamilton, A., Stokes, E., & Thrope, T. (2000)” A framework for<br />
measuring IT innovation benefits”, ITCon, Vol 5, pp 57-73.<br />
Apfel, P. (2007) Project portfolio management made simple, Gartner Symposium/ITxpo, Gartner Inc.<br />
Berghout, E. <strong>and</strong> Remenyi, D. (2005) “The eleven years of the European Conference on IT Evaluation:<br />
retrospectives <strong>and</strong> perspectives for possible future research”, The Electronic Journal of <strong>Information</strong><br />
Systems Evaluation, Vol 8, No. 2, pp 81-98.<br />
Changchit, C., Joshi, K.D. <strong>and</strong> Lederer, A.L. (1998) “Process <strong>and</strong> reality in information systems benefit analysis”,<br />
<strong>Information</strong> Systems Journal, Vol 8, pp 145-162.<br />
Cronk, F. <strong>and</strong> Fitzgerald, E.P. (2002) “Constructing a theory of IS business value from the literature”, Electronic<br />
Journal of Business Research methods, Vol 1, No.1, pp 11-17.<br />
Dehlin, S. <strong>and</strong> Olofsson, T. (2008) ”An evaluation model for ICT investment in construction projects”, ITCon, Vol<br />
13, pp 343-362.<br />
DeLone, W.H. <strong>and</strong> McLean, E.R. (2002) “<strong>Information</strong> system success revisited”, Proceedings of the 35 th Hawaii<br />
International Conference on System Science. [Online],<br />
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Dhillon, G. (2000) “Interpreting key issues in IS/IT benefits management”, Proceedings of the 33 rd Hawaii<br />
International Conference on System Sciences. [Online],<br />
http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=926926.<br />
Farbey, B., L<strong>and</strong>, F. <strong>and</strong> Targett, D. (1993) How to Assess Your IT Investment. A Study of Methods <strong>and</strong> Practice,<br />
Butterworth Heinemann Ltd, Oxford.<br />
Fulton, R. (2004). Defining the Business Value of IT. Gartner, Inc.<br />
Iivari, J., Hirschheim, R & Klein, H.K. (1998) “A paradigmatic analysis contrasting information systems<br />
development approaches <strong>and</strong> methodologies”, <strong>Information</strong> Systems Research, Vol 9, No 2, pp 164-194.<br />
Irani, Z. & Love, P.E.D. (2001) ”Developing a frame of reference for ex-ante IT/IS investment evaluation”,<br />
European Journal of <strong>Information</strong> Systems, Vol 11, No. 1, pp 74-82.<br />
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Illinois.<br />
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Institute, Illinois.<br />
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Governance Institute, Illinois.<br />
Lin, C., Huang, Y. <strong>and</strong> Cheng, M. (2007) “The adoption of IS/IT investment evaluation <strong>and</strong> benefits realization<br />
methodologies in service organizations: IT maturity paths <strong>and</strong> framework”. Contemporary <strong>Management</strong><br />
Research, Vol 3, No.2, pp 173-194.<br />
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Australia”, Journal of Research <strong>and</strong> Practice in <strong>Information</strong> Technology, Vol 37, No. 3, pp 235-251.<br />
Murphy, T. (2002) Achieving Business Value from Technology. A Practical Guide for Today’s Executive,<br />
Gartnerpress: John Wiley & Sons.<br />
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Oats, B.J. (2006) Researching <strong>Information</strong> Systems <strong>and</strong> Computing. London: SAGE publication.<br />
Peppard, J., Ward, J. <strong>and</strong> Daniel, E. (2007) “Managing the Realization of Business Benefits from IT Investments”,<br />
MIS Quarterly Executive, Vol 6, No. 1, pp 1-11.<br />
Remenyi, D. (2000) “The elusive nature of delivering benefits from IT investment”, Electronic Journal of<br />
<strong>Information</strong> Systems Evaluation, Vol 3, No 1, pp 16-38.<br />
Remenyi, D. <strong>and</strong> Sherwood-Smith, M. (1999) “Maximise information systems value by continuous participative<br />
evaluation”, Logistics <strong>Information</strong> <strong>Management</strong>, Vol 12, No. ½, pp 14-31.<br />
Remenyi, D. <strong>and</strong> Sherwood-Smith, M. (2001) “Outcomes <strong>and</strong> benefit modelling for information systems<br />
investment”, The International Journal of Flexible Manufacturing Systems, Vol 13, pp 105-129.<br />
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Thorp, J. (2007) The <strong>Information</strong> Paradox: Realizing the Business Benefits of <strong>Information</strong> Technology, Revised<br />
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74
Data Governance in Practice: The SME Qu<strong>and</strong>ary<br />
Reflections on the Reality of Data Governance in the Small<br />
to Medium Enterprise (SME) Sector<br />
Carolyn Begg <strong>and</strong> Tom Caira<br />
University of the West of Scotl<strong>and</strong>, UK<br />
carolyn.begg@uws.ac.uk<br />
tom.caira@uws.ac.uk<br />
Abstract: This paper explores how small to medium enterprises (SMEs) perceive data governance <strong>and</strong><br />
investigates whether current data governance frameworks are applicable to SMEs. Enterprises of all sizes <strong>and</strong><br />
complexity have had to learn how to operate in an increasingly digital business environment. Data governance<br />
encourages enterprises to recognise the value of their data <strong>and</strong> to treat data with the same level of management<br />
<strong>and</strong> control as given to all other business assets. This paper reviews examples of published data governance<br />
frameworks to establish whether these frameworks are applicable to SMEs. Our research revealed that although<br />
many frameworks claimed to be adaptable <strong>and</strong> scalable, there was little published evidence by industry or<br />
academics on the application of data governance to SMEs. Furthermore, our review revealed that the optimal use<br />
of data governance frameworks requires that those with the authority <strong>and</strong> responsibility over enterprise data must<br />
have knowledge <strong>and</strong> some underst<strong>and</strong>ing of the terminology that describes data, data-related issues, <strong>and</strong> databased<br />
technology <strong>and</strong> this requirement may not be met for many SMEs. Following the review of data governance<br />
frameworks, the Khatri & Brown, (2010) framework was selected for use to support our action research in two<br />
SMEs. The initial reflections on the reality of data governance for those SMEs revealed that they do not<br />
recognise the inherent value of their data nor view their data as having an independent existence from the<br />
systems that support their business processes. The paper concludes, amongst other things, that further research<br />
is required to identify a data governance framework that meets the needs for SMEs to take control over their data<br />
resource <strong>and</strong> gain the significant benefits <strong>and</strong> competitive advantage that up until now has been only available to<br />
large enterprises.<br />
Keywords: data governance, SMEs, data management, data quality, framework<br />
1. Introduction<br />
There is a wealth of evidence that large enterprises are waking up to the inherent value of their data<br />
<strong>and</strong> this realisation brings the need to control <strong>and</strong> manage data as with all other enterprise assets. An<br />
increasingly popular approach is through data governance, which assigns authority, responsibility <strong>and</strong><br />
tasks for all aspects of data management throughout the enterprise. However, as an industry, data<br />
governance solutions are largely directed at solving the needs of large enterprises with little evidence<br />
of an equivalent interest in small to medium enterprises (SMEs). There appears a common<br />
assumption by industry that data governance solutions for large enterprises can be scaled down <strong>and</strong><br />
simply applied to SMEs. This paper seeks to explore the validity of this assumption.<br />
The great interest in data governance by industry is not matched by the academic community. The<br />
academics currently working in this area do appear to agree that there is no single approach to the<br />
implementation of data governance in all enterprises. However, although their research uses a wide<br />
range of organisations to test their theory, all were large enterprises (Weber et al. 2009), (Khatri &<br />
Brown 2010). This paper takes published data governance approaches <strong>and</strong> explores the particular<br />
requirements of introducing data governance to SMEs.<br />
The authors believe that the lack of attention given to SMEs by the data governance community is<br />
unwise given the significant contribution that this sector makes to economies worldwide. Furthermore,<br />
the commonly used criteria that determine the size of an enterprise do not reveal the nature or volume<br />
of data used by the enterprise. The authors believe that the characterisation of enterprises used to<br />
demonstrate the effectiveness of data governance should include some measure of the complexity of<br />
their data environment. In addition, current technological developments such as cloud computing are<br />
likely to encourage SMEs to store <strong>and</strong> process even greater amounts of data.<br />
SMEs will continue to face significant <strong>and</strong> unrelenting pressure to work in an increasing digital<br />
business environment <strong>and</strong> this will place significant dem<strong>and</strong>s to take control <strong>and</strong> effectively manage<br />
their data. Therefore, SMEs will need to adopt data governance practises to help them both survive<br />
<strong>and</strong> find success. However, our initial investigations of how SMEs perceive data <strong>and</strong> its governance<br />
reveal that SMEs do not recognise the inherent value of their data nor view their data as having an<br />
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Carolyn Begg <strong>and</strong> Tom Caira<br />
independent existence from the systems that support their business processes. As a consequence,<br />
SMEs cannot easily envisage how data governance can be achieved without first achieving control<br />
over their IT systems.<br />
The format of this paper is to first examine in Section 2 the definition of a SME as described by the<br />
European Community (EC) <strong>and</strong> to comment on this categorisation. Section 3 examines definitions of<br />
data governance <strong>and</strong> presents examples of published approaches (frameworks) to data governance<br />
that proposes to be adaptable <strong>and</strong> scalable. Section 4 presents our research <strong>and</strong> initial findings<br />
concerning the application of a data governance framework by Khatri & Brown (2010) in two SMEs.<br />
Section 5 concludes this paper with a discussion on the realities of data governance for SMEs <strong>and</strong> on<br />
the key factors that are likely to stimulate interest in this emerging discipline within the SME sector.<br />
2. SME defined<br />
The term ‘SMEs’ refers to micro, small, or medium-sized enterprises that meet criteria defined by the<br />
European Commission Recommendation (2003/361/EC). An enterprise qualifies as an SME if the<br />
maximum number of staff is less than 250 with a turnover ≤ 50 million or a balance sheet total ≤ 43<br />
million euros. The EC recommendation also specifies criteria that identifies SME subcategories;<br />
namely micro, small or medium-sized enterprises.<br />
The significant contribution that SMEs make to the European Union’s economy is acknowledged <strong>and</strong><br />
well documented in both the Lisbon strategy (EC, 2000) <strong>and</strong> its successor Europe 2020 strategy (EC,<br />
2010a). An annual performance review for 2009 revealed that 99.8% of all European businesses are<br />
SMEs <strong>and</strong> are responsible for providing two out of three jobs in the private sector <strong>and</strong> contribute more<br />
than half of the total gross value added by businesses in the European Union. Furthermore, nine out<br />
of ten SMEs are actually micro enterprises with less than 10 employees. (EC, 2010b)<br />
The characteristics that determine an SME such as number of staff <strong>and</strong> the turnover or balance sheet<br />
does not have any strong correlation to the amount <strong>and</strong> nature of organisational data. In fact, it is<br />
entirely possible that many SMEs use far larger amounts of data to support their business than larger<br />
enterprises. This will become increasingly true as enterprises (including virtual enterprises) of all sizes<br />
move to exploit the capacity <strong>and</strong> services offered by cloud computing to capture, process <strong>and</strong> store<br />
growing amounts of data without necessitating an equivalent increase in accommodation, computing<br />
resources <strong>and</strong> staff to manage these resources.<br />
For the purpose of this paper, we do not distinguish between micro, small <strong>and</strong> medium-sized<br />
enterprises but use ‘SMEs' as a collective term to represent all enterprises that do not exceed the<br />
criteria identified for medium-sized enterprise.<br />
3. Data governance<br />
3.1 Data governance defined<br />
Data governance formed from a convergence of several well-established areas concerned with data<br />
such as data quality management, data management systems, data security, <strong>and</strong> data administration.<br />
The major driver for this convergence was a need to co-ordinate the control <strong>and</strong> management of all<br />
aspects of data throughout an enterprise.<br />
Since the initial emergence of data governance as a critical <strong>and</strong> fundamental enterprise-wide<br />
discipline, the data governance community has published several definitions of the discipline. While<br />
earlier definitions focused on procedures, policies, processes, technologies <strong>and</strong> responsibilities for the<br />
control <strong>and</strong> management of enterprise data, more recent definitions place more emphasis on<br />
identifying roles <strong>and</strong>/or business structures that have authority over data-related matters.<br />
While most definitions present the ‘what’ aspects of data governance, others can also include the<br />
‘who’, ‘how’ <strong>and</strong> sometimes ‘why’ aspects. The range of definitions is partly due to the fact that data<br />
governance is currently an industry-led discipline, which can mean that vendors tend to use<br />
definitions that focus on the ‘what’ <strong>and</strong> ‘why’ aspects that best match the product or services being<br />
promoted. Organisations such as the Data Governance Institute (DGI) <strong>and</strong> Data Warehouse Institute<br />
(TDWI) that aim to inform <strong>and</strong> share good practice, present definitions that place emphasis on ‘how’<br />
data governance is to be achieved.<br />
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Carolyn Begg <strong>and</strong> Tom Caira<br />
Our research suggests that the definition of data governance is still evolving <strong>and</strong> that the data<br />
governance community does not appear to be converging on a single agreed definition. For the<br />
purposes of this paper, we will not contribute to this evolutionary process but use a data governance<br />
definition by (Weber et al. 2009), which is based on an adaptation of an IT governance definition by<br />
(Weill 2004). This definition states in simple terms what data governance aims to achieve.<br />
“Data governance specifies the framework for decision rights <strong>and</strong> accountabilities to<br />
encourage desirable behavior in the use of data. To promote desirable behavior, data<br />
governance develops <strong>and</strong> implements corporate-wide data policies, guidelines, <strong>and</strong><br />
st<strong>and</strong>ards that are consistent with the organization’s mission, strategy, values, norms,<br />
<strong>and</strong> culture.”, (Weber et al. 2009), (Weill & Ross 2004).<br />
Examples of published frameworks that propose to facilitate the establishment of data governance<br />
within an enterprise are presented in the following section.<br />
3.2 Data governance frameworks<br />
Some authors of data governance believe that enterprises are too diverse, for example in terms of<br />
organisational structure, culture, politics <strong>and</strong> policies to use a common framework or approach,<br />
(Weber et al. 2009), while others believe that published frameworks offer a good platform on which to<br />
establish data governance for any enterprise. Taking these perceptions together there are several<br />
options available for enterprises to consider when planning a data governance programme (Dyché<br />
2007). These options include creating your own unique framework, adopting an industry st<strong>and</strong>ard<br />
framework such as the ISO 9000 series, or <strong>using</strong> an adaptable <strong>and</strong> scalable framework such as the<br />
Data Governance Institute Framework (2011).<br />
As this paper is foc<strong>using</strong> on the needs of SMEs with their limited resources <strong>and</strong> based on the fact that<br />
SMEs taken as a group form a highly diverse sector of industry, the most obvious option to explore is<br />
those frameworks that propose to be adaptable <strong>and</strong> scalable. In this section, we review some of the<br />
most prominent contenders of published data governance frameworks <strong>and</strong> also examples of<br />
frameworks published by the academic community. The purpose of this review is to present examples<br />
of the types of published support available for an SME seeking advice <strong>and</strong> expertise on data<br />
governance.<br />
IBM <strong>and</strong> other enterprises formed the IBM Data Governance Council with the aim of establishing best<br />
practices for data governance. This collaboration resulted in the creation of a framework referred to as<br />
the Data Governance Maturity Model (IBM 2007), which proposes to assess <strong>and</strong> measure the data<br />
governance maturity of an enterprise. This model is available as a free on-line self-assessment tool<br />
(at www.infogovcommunity.com) <strong>and</strong> is organised as a series of questions <strong>and</strong> responses on a range<br />
of data-related areas. The tool also provides simple reporting of the responses gathered so far.<br />
The Data Governance Institute (DGI) (at www.datagovernance.com) describes itself as being “a<br />
mission-based, vendor-neutral authority on essential practices for data strategy <strong>and</strong> governance.” A<br />
major aim of the DGI is to provide a single framework that is capable of dealing with data governance<br />
programmes that focus on one or more data-related areas. The framework proposes to work by<br />
establishing that no matter what the focus area(s) are then any data governance programme shares<br />
the same ‘universal objectives’ from enabling better decision making to ensuring transparency of<br />
process. A partner company of the DGI provides an online workspace tool called Stakeholder Care (at<br />
www.datagovernance.com/software) to support an enterprise following the DGI framework. This tool<br />
is available through monthly subscriptions.<br />
There are many vendors offering data governance solutions to enterprises able to pay for their<br />
services. For example, Kalido (at www.kalido.com) offers consultancy services <strong>and</strong> data management<br />
software referred to as the Kalido <strong>Information</strong> Engine. Kalido encourages clients to first undertake a<br />
self-assessment of their data governance maturity <strong>using</strong> an online tool, which uses criteria that cover<br />
three potential aspects (organisation, process <strong>and</strong> technology) of data governance implementation.<br />
Based on the results of the assessment, an enterprise is then deemed to fall into one of four data<br />
governance maturity stages: Application-Centric, Enterprise Repository- Centric, Policy-Centric, <strong>and</strong><br />
Fully Governed.<br />
Weber et al. (2009) states that there is not one approach to data governance <strong>and</strong> hence proposes a<br />
flexible data governance model made up of roles (executive sponsor, chief steward, business data<br />
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steward, <strong>and</strong> technical data steward), decision areas (or tasks) <strong>and</strong> assignment of responsibilities.<br />
The components of the model are drawn together into a responsibility assignment matrix. Their<br />
proposed data governance model documents data quality roles <strong>and</strong> their type of interaction with data<br />
quality management (DQM) activities. The paper also proposes that contingency factors taken from IT<br />
governance (such as organisation structure <strong>and</strong> decision-making style) influence the design of the<br />
data governance model in achieving successful data quality management. This influence is thought to<br />
facilitate the creation of company-specific data governance solutions. The paper presents initial<br />
results of a data governance action research project involving six large enterprises from various<br />
industries.<br />
Khatri & Brown (2010) propose a data governance framework that is an adaptation of a previous<br />
published IT governance framework by Weill & Ross (2004). This approach promotes the idea that<br />
the control <strong>and</strong> management of data assets (data governance) should be closely aligned to the<br />
control <strong>and</strong> management of IT assets (IT governance). The data governance framework uses five<br />
interrelated data decision domains including data principles, data quality, metadata, data access <strong>and</strong><br />
data lifecycle. The purpose of each domain in exploring data-related matters is established along with<br />
identifying ‘the locus of accountability for decision-making’ in each domain; in other words the key<br />
decision makers in each domain. The investigation associated with each domain is presented as<br />
series of possible questions. In addition, a matrix is available, to establish the locus of accountability,<br />
ranging from two extremes of centralised to decentralised against each decision domain. The paper<br />
concludes that all data-related decisions that establish the data governance for an organisation must<br />
be achieved in close association with IT-related decisions <strong>and</strong> IT governance. The proposed data<br />
governance framework was tested on a case study for a large insurance company.<br />
3.3 Critique of data governance frameworks<br />
The examples of data governance frameworks are presented in this paper to illustrate the range <strong>and</strong><br />
types of support available for SMEs seeking to establish data governance. As the SME sector are<br />
consider to be a highly diverse sector, it was considered that frameworks that are adaptable <strong>and</strong><br />
scalable are the mostly likely to be useful. This section highlights some of the features of available<br />
frameworks.<br />
Before data governance can be introduced to an enterprise, all published frameworks recommend<br />
that a data governance maturity assessment is undertaken to establish the current state of data<br />
management <strong>and</strong> control. Some frameworks have supporting (online) tools that can facilitate this<br />
process by directing an enterprise to assess all key aspects of data management.<br />
Implementation of data governance involves defining the owners or custodians of the data assets in<br />
the enterprise. All data governance frameworks emphasize the importance of assigning<br />
responsibilities for data areas to individuals of groups that are also given appropriate authority to<br />
make decisions <strong>and</strong> take appropriate actions.<br />
Optimal use of available frameworks <strong>and</strong> assessment tools appears to require that those with<br />
authority <strong>and</strong> responsibility over enterprise data have knowledge <strong>and</strong> some underst<strong>and</strong>ing of the<br />
terminology that describes data, data-related issues, <strong>and</strong> data-based technology. All proponents of<br />
data governance frameworks agree that responsibility for this data governance must be shared<br />
between business <strong>and</strong> IT departments <strong>and</strong> this suggests that alignment of data governance with IT<br />
governance is likely to be a productive approach for the management of both data <strong>and</strong> IT enterprise<br />
assets.<br />
The frameworks examined displayed a wide range of complexity. For example, the Data Governance<br />
Institute (DGI) (at www.datagovernance.com) is formed from several interrelated items (including<br />
programmes, phases, decision domains, universal objects, <strong>and</strong> components) requiring significant<br />
effort to learn <strong>and</strong> use. Whereas, the Khatri & Brown (2010) framework is relatively simple <strong>and</strong><br />
includes few items (including tables <strong>and</strong> matrices) requiring less effort to learn <strong>and</strong> use.<br />
Many published frameworks proposed to be scalable with some providing case studies. However, the<br />
details of each case study including the size of the organisation is not given in detail <strong>and</strong> the authors<br />
could find no examples of data governance applied to SMEs.<br />
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In the following section, we justify <strong>using</strong> the Khatri & Brown framework <strong>and</strong> present the initial findings<br />
from our action research in two SMEs.<br />
4. Research<br />
4.1 Overview<br />
While most data governance frameworks claim to be adaptable <strong>and</strong> scalable, there are few, if any,<br />
notable cases of frameworks being applied to SMEs. Given the important contribution that SMEs<br />
make to the economies world-wide, <strong>and</strong> their ever increasing reliance on data as an enabler of more<br />
effective performance, there is a need to explore SME awareness <strong>and</strong> underst<strong>and</strong>ing of data<br />
governance.<br />
Caira et al. (2009) highlight the data-related issues that are typically faced by SMEs in their<br />
operational environment <strong>and</strong> comment that, in ICT audits undertaken in over 100 SMEs, every<br />
enterprise had data management issues. Given that data-related issues appear to be endemic in<br />
SMEs <strong>and</strong> that such issues should, in theory, be addressable by data governance, the authors chose<br />
to assess whether the Khatri & Brown data governance framework can be applied, in practice, to<br />
SMEs.<br />
This approach targets an aspect of data governance - scalability - that has had little, if any, coverage<br />
by the data governance community <strong>and</strong> also provides a useful insight into the SME view of data<br />
governance, the opportunities that it can provide <strong>and</strong> the potential barriers to its adoption.<br />
4.2 Methodology<br />
The methodology used takes the form of action research with both authors acting as change agents in<br />
collaborative projects with two SMEs whose organisations form the basis of the research. The<br />
findings of this action research were supported by further research of technology audit reports on<br />
SMEs located in the West of Scotl<strong>and</strong>.<br />
Company A is a long established manufacturing enterprise with a demonstrable record of successfully<br />
supplying industry leaders in the field of electronics <strong>and</strong> electro-mechanics. Over the past few years,<br />
the repair <strong>and</strong> maintenance side of the business has increased significantly <strong>and</strong> has now replaced<br />
manufacturing as the major focus of the company’s operations. The company’s business processes<br />
are supported by both paper-based <strong>and</strong> computer-based systems with electronic data stored <strong>and</strong><br />
processed by way of bespoke software packages that provide production control <strong>and</strong> repair tracking<br />
facilities. In addition, st<strong>and</strong>ard application packages provide office automation <strong>and</strong> accounting<br />
services. There is no sharing of data between any of these software packages. Communication with<br />
external partners is through telephone <strong>and</strong> e-mail with data transferred by paper or e-mail<br />
attachments. The company does not make use of the Internet in the course of its day-to-day<br />
operations, other than sending <strong>and</strong> receiving e-mail. The company considers its computer systems<br />
out-dated <strong>and</strong> no longer able to adequately support the organisational change in focus from<br />
manufacturing to the provision of equipment repair services.<br />
Company B is a family-run enterprise which has been trading for 7 years. The business has grown<br />
rapidly over this period <strong>and</strong> is looking to further exp<strong>and</strong>. The company is a service-oriented<br />
organisation. The key services offered are courier, freight-forwarding <strong>and</strong> fulfilment services, all of<br />
which are fronted by the enterprise but are actually supplied by third-party organisations. The<br />
enterprise’s unique selling proposition is its excellent customer service, its adoption of end-to-end<br />
ownership of the entire process, <strong>and</strong> the discount it can offer on services, which allows it to undercut<br />
the competition. The company has a website that provides facilities for customers to book <strong>and</strong> pay for<br />
collections <strong>and</strong> to track their consignments, although the extent of these services is currently<br />
dependent upon the third-party fulfilment providers. Pricing <strong>and</strong> tracking data is supplied to the<br />
enterprise from these providers in a number of formats: paper-based; static electronic documents;<br />
<strong>and</strong> dynamic data provided through the use of web services. The company struggles to assimilate all<br />
of these diverse data formats into a single queryable dataset that can provide automated pricing<br />
information to its online customers. The company’s business processes are supported by both paperbased<br />
<strong>and</strong> computer-based systems with each member of staff maintaining their own version of<br />
assimilated supplier data in a format that suits their own individual requirements.<br />
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The SMEs are of similar size but differ in their requirements for access to, <strong>and</strong> use of data. Company<br />
A does not utilise e-business other than e-mail facilities <strong>and</strong>, as such, is very much internally<br />
focussed in relation to its access to, <strong>and</strong> use of, data. Company B has made a significant investment<br />
in e-business facilities <strong>and</strong> provides <strong>and</strong> utilises web services for both customer <strong>and</strong> supplier<br />
interaction. As such, it recognises the need to have both an internal <strong>and</strong> an external focus in relation<br />
to its access to, <strong>and</strong> use of, data.<br />
Neither of these organisations overtly utilise any form of data governance. The aim of this research is<br />
to explore the awareness of, <strong>and</strong> attitude to, data governance within each organisation <strong>and</strong>, given the<br />
differing data focus between the organisations, to explore the potential benefits that could be provided<br />
by the implementation of data governance <strong>and</strong> to highlight any barriers that might restrict these<br />
organisations from capitalising on such. We use the data governance framework proposed by Khatri<br />
& Brown due to its uncomplicated format as this is likely to engender a better level of underst<strong>and</strong>ing of<br />
data governance concepts within the research organisations <strong>and</strong> hence provide for better elicitation of<br />
valuable research data.<br />
4.3 Research<br />
Each organisation was asked to provide an explanation of the term ‘data governance’ <strong>and</strong> of the<br />
decision domain terminology used in the Khatri framework as a means of establishing awareness <strong>and</strong><br />
underst<strong>and</strong>ing of the concepts. The authors then provided an explanation of the terminology <strong>and</strong> used<br />
the questions contained in the framework to effect a discussion that revealed company attitudes to<br />
data governance <strong>and</strong> engendered consideration of potential benefits <strong>and</strong> barriers.<br />
When asked to provide an explanation of ‘data governance’ both companies referred to governance<br />
by external entities such as government <strong>and</strong> regulatory bodies (e.g. Data Protection Act) <strong>and</strong> then,<br />
almost as an afterthought, to the internal governance of company data, the management of client data<br />
<strong>and</strong> the provision of effective data backup <strong>and</strong> security.<br />
Both companies were then asked to provide an explanation of their underst<strong>and</strong>ing of the five ‘decision<br />
domains’ that are contained in the framework. Neither company could offer any form of explanation<br />
for the terms ‘data principles’ <strong>and</strong> ‘metadata’. Both companies identified ‘data quality’ as relating to<br />
the accuracy <strong>and</strong> integrity of their electronic data. Company A’s underst<strong>and</strong>ing of the term ‘data<br />
lifecycle’ matched the definition provided in the framework whereas company B could offer no<br />
explanation for this terminology. The final decision domain, ‘data access’ provided differing<br />
explanations with company A relating it to security <strong>and</strong> company B explaining it as the variety of ways<br />
in which a dataset can be accessed.<br />
After an explanation of the decision domain terminology was given, further comment was provided by<br />
the companies, as follows in Table 1:<br />
Table 1: Company attitude <strong>and</strong> perception of benefits <strong>and</strong> barriers<br />
Decision<br />
Company Attitude <strong>and</strong> Perception of Benefits <strong>and</strong> Barriers<br />
Domain Company A Company B<br />
Data<br />
Principles<br />
Data<br />
Quality<br />
Metadata<br />
Value of data recognised in relation to<br />
monitoring of production <strong>and</strong> repair processes<br />
<strong>and</strong> for invoicing. Data not considered to have<br />
value in relation to analytics. This was not<br />
considered to be feasible in the existing<br />
information system.<br />
Data not 100% correct. Inconsistencies,<br />
duplications <strong>and</strong> missing data corrected in a<br />
reactive matter. Great deal of trust placed in<br />
employees to maintain data accuracy. Small<br />
size of workforce facilitates this. Company<br />
does, on occasion, have to h<strong>and</strong>le data that<br />
does not fit within normal business processes<br />
<strong>and</strong> management of this data can often be<br />
problematic.<br />
Data not perceived as an asset, because it is<br />
not currently viewed as such by the business<br />
world. Hence has no perceived ‘financial’<br />
value to the enterprise, as opposed to<br />
intangibles like goodwill. Value of data<br />
recognised as an essential element of<br />
operational management.<br />
Data managed <strong>and</strong> maintained in a reasonably<br />
accurate manner, in as much as this is<br />
required to provide company services<br />
effectively. Data quality perceived as a<br />
reactive process driven by practical needs <strong>and</strong><br />
effected on an ‘as needs’ basis. Data quality<br />
issues considered easier for SMEs <strong>and</strong><br />
particularly micro enterprises to address.<br />
Both companies made similar comment in that company data is not documented <strong>and</strong> the<br />
meaning of data is passed on to new employees through training <strong>and</strong> personal contact,<br />
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Decision<br />
establishing a ‘community’ view of metadata. Both companies consider this to be adequate<br />
given the small size of their workforce.<br />
Company Attitude <strong>and</strong> Perception of Benefits <strong>and</strong> Barriers<br />
Domain Company A Company B<br />
Company recognises that its systems are too Company perceives this to be related to<br />
open. This makes company vulnerable to security specifically in relation to UK Data<br />
Data<br />
Access<br />
malicious attack by disgruntled employees.<br />
Company does not underst<strong>and</strong> how to<br />
establish appropriate data security. Places a<br />
great deal of trust in its employees in this<br />
respect.<br />
Protection Act <strong>and</strong> also to web-based<br />
processing of secure credit card payments.<br />
Company does not actively monitor lifecycle Company referred to this as ‘good<br />
aspects of data. Electronic data rarely housekeeping’ which was more dictated by<br />
maintained <strong>and</strong> commonly stored for longer regulation than from any internal desire to<br />
than necessary with any maintenance being effect appropriate data governance.<br />
Data reactive <strong>and</strong> performed in an ad hoc manner. Awareness of how to properly <strong>and</strong><br />
Lifecycle Reason cited for this was lack of appropriately ‘retire’ or ‘archive’ electronic data<br />
underst<strong>and</strong>ing of how to perform data lifecycle is an issue. Lifecycle maintenance of paper-<br />
maintenance. Lifecycle maintenance of paperbased data was actively <strong>and</strong> appropriately<br />
based data was actively <strong>and</strong> appropriately<br />
managed.<br />
managed.<br />
4.4 Research findings<br />
Khatri & Brown (2010) claim to have provided “a data governance framework that can be used by<br />
practitioners to develop a data governance strategy <strong>and</strong> approach for managing data as an<br />
organizational asset.”<br />
Our primary research finds that, whilst company A <strong>and</strong> company B have different data needs <strong>and</strong> a<br />
different data focus, both seem to have similar views on developing a data governance strategy <strong>and</strong><br />
are experiencing similar issues in relation to their ability to successfully address the management <strong>and</strong><br />
control of data as an organisational asset.<br />
Awareness seems to be a key factor in the SME view of, <strong>and</strong> approach to, data governance. Even the<br />
most uncomplicated published approach to data governance uses language that is not easily<br />
understood by SMEs. In addition, awareness, or lack thereof, of the technology that is used to<br />
manage <strong>and</strong> maintain electronic data has a major influence on an SME’s ability to develop a data<br />
governance strategy. Both companies lacked awareness <strong>and</strong> underst<strong>and</strong>ing of how to address data<br />
lifecycle issues (in particular data retirement) <strong>and</strong> were reticent to take action on this for fear of<br />
disrupting live data or the processes that operate thereon.<br />
Another key factor for SMEs is their perception of the value of data both within <strong>and</strong> outwith their<br />
enterprise. Neither of the companies views data as an asset. It is viewed internally as a somewhat<br />
transient ‘means to an end’ in that it provides the ‘fuel’ to drive business processes but is not viewed<br />
in itself as having any intrinsic value. Both companies recognise the value of intangibles such as<br />
goodwill <strong>and</strong> customer loyalty but do not regard data governance as providing intangible value in this<br />
respect. Both companies commented that if data governance received such recognition within the<br />
business community then they would see value in implementing a data governance strategy but, as<br />
this recognition is not currently perceived to exist, the practical needs which tend to drive SMEs force<br />
them to operate in a ‘reactive’ manner. As such, they would struggle to implement <strong>and</strong> maintain the<br />
required ‘regimented practices’ <strong>and</strong> would likely therefore not extend to embracing the concept of data<br />
governance at this time.<br />
SMEs do not tend to explicitly acknowledge or define data principles. St<strong>and</strong>ards, policies <strong>and</strong><br />
guidelines for management <strong>and</strong> use of data tend to evolve over time <strong>and</strong> become established as a<br />
norm which is communicated to, <strong>and</strong> developed between, existing <strong>and</strong> new employees within the<br />
organisation on an ongoing basis. This is particularly true in micro enterprises where data quality<br />
issues are perceived as being easier to address because of the small locus of control. Both<br />
enterprises identified the locus of accountability for decision making to be decentralised for data<br />
quality <strong>and</strong> centralised for all other decisions domains. Non-conformance of data in non-regulatory<br />
situations is not generally viewed by SMEs as an issue.<br />
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Trust in employees is perceived as a major contributory factor in ensuring data quality <strong>and</strong><br />
conformance to any implicit data principles within SMEs. Again the small locus of control <strong>and</strong><br />
accountability has a positive influence on a SME’s ability to maintain its data at an acceptable<br />
operational level.<br />
It is also interesting to note, in this respect, that both companies commented that they have no issues<br />
with data governance of paper-based data as they have long-established, tailor-made data principles<br />
<strong>and</strong> business processes for effectively managing such.<br />
The authors acknowledge that this research is limited in that it focuses mainly on the practical issues<br />
associated with implementing data governance in SMEs. However, these findings have also been<br />
supported by further analysis of the technology audit reports previously discussed by Caira et al.<br />
(2009) which has shown the two research companies to be both typical <strong>and</strong> representative.<br />
5. Discussion<br />
This paper concludes with a discussion on the qu<strong>and</strong>ary that SMEs now face working in an<br />
increasingly digital business environment.<br />
The first <strong>and</strong> perhaps most obvious qu<strong>and</strong>ary is while SMEs may recognise the benefits that data<br />
governance could deliver, in that poor data is clearly bad for business, the effort required to achieve<br />
data governance often seems far higher than the perceived benefits. Much of the dilemma is due the<br />
relationship that SMEs have with their IT systems. SMEs find the idea of data governance difficult to<br />
accept without first gaining control over their IT systems (IT governance). Furthermore, SMEs can find<br />
that they are treated as ‘sinks’ for data as it flows into their IT systems from external sources such as<br />
suppliers <strong>and</strong> customers. For SMEs with many external partners this can mean that the SME must<br />
adapt internal systems to deal with data of various forms, controlled by the data governance of others<br />
<strong>and</strong> not by the SME. SMEs are often followers in terms of data format <strong>and</strong> use <strong>and</strong> this often leads to<br />
inefficient <strong>and</strong> ineffective data management as they try to govern this resource.<br />
The second qu<strong>and</strong>ary is that SMEs may not seek data governance because they do not recognise the<br />
inherent value of their data nor view their data as having an independent existence from the systems<br />
that support their business. Many SMEs view their data as being ‘owned’ or worse still being ‘trapped’<br />
by application packages that have been purchased to meet a particular business requirement. While<br />
the use of st<strong>and</strong>ard office application packages can often help SMEs achieve some control over their<br />
data such as improved data quality, data access <strong>and</strong> data management, on the negative side, SMEs<br />
can also be constrained by the same packages as the business changes to meet new requirements<br />
but cannot easily align their IT systems to support new or changing business practises due to a lack<br />
of in house IT expertise. This is evidence of IT systems dictating data governance.<br />
The third qu<strong>and</strong>ary for SMEs that do recognise the value of data governance is that there are no<br />
published data governance frameworks that are appropriate for use by SMEs. While, most data<br />
governance frameworks claim to be adaptable <strong>and</strong> scalable, this was not supported with evidence.<br />
The authors could find no published examples of academic or industry-based research showing data<br />
governance adoption in SMEs. In addition, the language <strong>and</strong> terminology used by published data<br />
governance frameworks is not appropriate for SMEs, especially those with minimal technical<br />
expertise.<br />
The fourth qu<strong>and</strong>ary for SMEs is how they are viewed by the data governance community in that<br />
SMEs may be perceived as requiring ‘simpler’ data governance, however this may not be true. The<br />
commonly used criteria (staff count, turnover, balance sheet) used to identify an enterprise as being<br />
an SME is not necessarily indicative of their data environment. In fact, it is entirely possible that an<br />
SME could have a far more complex data environment, in terms of the volume <strong>and</strong> nature of their<br />
data. Furthermore, it is thought likely that SMEs will use far greater amounts of electronic data due to<br />
technological advances such as cloud computing, enabling the provision of utility-type data capture,<br />
storage <strong>and</strong> processing services. Although, cloud computing is thought to be a mechanism to deliver<br />
affordable computing to resource-poor SMEs, the SMEs may again find themselves dictated to by the<br />
data governance practises used by third-party cloud computing providers.<br />
The authors believe that the lack of attention given to SMEs by the data governance community is<br />
unwise given the significant contribution that this sector makes to economies worldwide. In addition,<br />
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SMEs need to recognise the value of their data <strong>and</strong> the importance of data governance for their own<br />
survival in an increasingly digital business environment. It is likely that SMEs will continue to increase<br />
their use of IT, <strong>and</strong> e-business systems in particular, <strong>and</strong> this will bring growing amounts of data that<br />
requires their governance. It is also thought possible that data governance for SMEs will move from<br />
being a highly desirable achievement to a regulatory requirement. (Trope & Power 2005), (Khatri &<br />
Brown 2010). For SMEs, it would no longer be acceptable to ignore data-related issues or to have<br />
company data inaccessible to the auditors. Such regulation is likely to affect the banking <strong>and</strong> financial<br />
services industries first, <strong>and</strong> will emerge as a growing trend worldwide. However, once established,<br />
this regulatory requirement is likely to ultimately encompass all enterprises of any size in all sectors.<br />
The authors propose that further <strong>and</strong> focused research is required on SMEs <strong>and</strong> data governance<br />
<strong>and</strong> this may include the development of a SME-focused data governance framework <strong>and</strong> on<br />
approaches to achieving greater alignment of data governance with IT governance for SMEs.<br />
References<br />
Caira, T. et al., 2009. <strong>Knowledge</strong> Transfer in Action within the SME Sector. In Proceedings of the 4th European<br />
Conference on Technology <strong>Management</strong>. p. 8.<br />
Data Governance Maturity Model (2011) [online] www.infogovcommunity.com<br />
Data Governance Institute Framework (2011) [online] www.datagovernance.com<br />
Dyché, J., 2007. A Data Governance Manifesto: Designing <strong>and</strong> Deploying Sustainable Data Governance.<br />
Baseline Consulting, Los Angeles, California.<br />
EC (European Commission), 2003, Commission Recommendation 2003/361/EC of May 6, 2003.<br />
http://europa.eu.int.<br />
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Communication COM(2010) 2020, Brussels: European Commission.<br />
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Sized Enterprises 2009, Brussels, Belgium: European Commission.<br />
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[http://www.europarl.europa.eu/summits/lis1_en.htm]<br />
IBM, 2007, IBM Data Governance Council Maturity Model: Building a road map for effective data governance.<br />
[online] www.infogovcommunity.com/blog/maturity-model-white-paper/<br />
Khatri, V. & Brown, C.V., 2010. Designing data governance. Communications of the ACM, 53(1), pp.148–152.<br />
Trope, R.L. & Power, E.M., 2005. Lessons in Data Governance: A Survey of Legal Developments in Data<br />
<strong>Management</strong>, Privacy <strong>and</strong> Security. Business Lawyer (ABA), 61, p.471.<br />
Weber, K., Otto, B. & Oesterle, H., 2009. One Size Does Not Fit All—A Contingency Approach to Data<br />
Governance. Journal of Data <strong>and</strong> <strong>Information</strong> Quality (JDIQ), 1(1), p.4.<br />
Weill, P., 2004. Don't just lead, govern: How top-performing firms govern IT. MIS Quarterly Executive, 3(1), pp.1–<br />
17.<br />
Weill, P. & Ross, J.W., 2004. IT governance: How top performers manage IT decision rights for superior results,<br />
Harvard Business Press.<br />
83
Towards a Framework for the Evaluation of Mobile<br />
Payments Integration<br />
Fergal Carton 1 , Jonas Hedman 2 , Jan Damsgaard 2 , Kay-Ti Tan 1 <strong>and</strong> J. B.<br />
McCarthy 1<br />
1<br />
University College Cork, Irel<strong>and</strong><br />
2<br />
Copenhagen Business School, Denmark<br />
f.carton@ucc.ie<br />
jh.caict@cbs.dk<br />
jd.caict@cbs.dk<br />
k.tan@ucc.ie<br />
jb.mccarthy@ucc.ie<br />
Abstract: This paper derives a theoretical framework for consideration of both the technologically driven<br />
dimensions of mobile payment solutions, <strong>and</strong> the associated value proposition for customers. Banks promote<br />
traditional payment instruments whose value proposition is the management of risk for both consumers <strong>and</strong><br />
merchants. These instruments are centralised, costly <strong>and</strong> lack decision support functionality. The ubiquity of the<br />
mobile phone has provided a decentralised platform for managing payment processes in a new way, but the<br />
value proposition for customers has yet to be elaborated clearly. This inertia has stalled the design of sustainable<br />
revenue models for a mobile payments ecosystem. Merchants <strong>and</strong> consumers in the meantime are being<br />
seduced by the convenience of on-line <strong>and</strong> mobile payment solutions. Adopting the purchase <strong>and</strong> payment<br />
process as the unit of analysis, the current mobile payment l<strong>and</strong>scape is reviewed with respect to the creation<br />
<strong>and</strong> consumption of customer value. From this analysis, a framework is derived juxtaposing customer value,<br />
related to what is being paid for, with payment integration, related to how payments are being made. The<br />
framework provides a theoretical <strong>and</strong> practical basis for considering the contribution of mobile technologies to the<br />
payments industry.<br />
Keywords: payments, framework, mobile, value<br />
1. Introduction<br />
Payments are central to the growth of modern civilisations. Payment systems have evolved<br />
substantially over time, from earliest bartering systems, to systems based on coins of precious metal,<br />
to the virtual payment systems of today. The mobile phone is capable of providing a bridge between<br />
the traditional <strong>and</strong> the new payment systems, supporting on dem<strong>and</strong> purchase <strong>and</strong> payment<br />
processes in a manner heretofore not conceivable. The transition to mobile phone driven payment<br />
processes is not smooth, hoever, not because of a lack of technology innovation, but because the<br />
underlying players in the industry are reluctant to change highly profitable business models are slow<br />
to evolve. Banks <strong>and</strong> their customers are not in agreement as to what constitutes good value in terms<br />
of payment alternatives, a phenomenom also found among stakeholders to technology adoption (Au<br />
<strong>and</strong> Kauffman, 2008). Research has suggested that the high failure rate of mobile payment solutions<br />
is linked to their inability to provide the right value proposition to customers (Ondrus et al., 2005).<br />
Banks promote payment instruments that earn the most revenue. These tend to be centralised <strong>and</strong><br />
inconvenient. Customers have little choice in selecting payment instruments, but are being seduced<br />
by the control <strong>and</strong> convenience of on-line <strong>and</strong> mobile payment solutions. Until a solid value<br />
proposition emerges that combines value for both banks <strong>and</strong> customers, the innovation in terms of<br />
payment solutions will remain sporadic <strong>and</strong> piecemeal. This paper explores the existing research<br />
domains from which such value propositions or business models could be drawn, <strong>and</strong> extrapolates a<br />
theoretical basis for further research in the area of payments.<br />
The challenge of underst<strong>and</strong>ing the driving forces in the market for electronic payments is that there<br />
are an accelerating range of solutions that address shortcomings in legacy payment processes. For<br />
example, many innovative solutions support the connection of existing bank or credit card accounts to<br />
on-line virtual wallet transactions), substituting the phone for the desktop computer but without<br />
changing the underlying value proposition. Other solutions leveraging the processing capability of<br />
Smart phones seek to associate the payment transaction with other customer related processes such<br />
as loyalty points programmes, but are by definition focused on a particular segment of Smart phone<br />
<strong>using</strong> consumers. While such developments espouse key technology adoption factors such as<br />
consumer convenience <strong>and</strong> ease of use, they also tend to obscure visibility of the comparative value<br />
of choosing a particular payment instrument over an alternative.<br />
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The language used for describing payments has relied on traditional banking terminology such as<br />
payment instruments, or on technological concepts such as connectivity. There are many other<br />
possible dimensions for describing payments such as transaction type, payment domains or<br />
geographic scope. Indeed one of the difficulties for the development of an ecosystem for mobile<br />
payments has been the lack of a common vocabularly between the financial services community <strong>and</strong><br />
the technology community. The method used in this study is to categorise the concepts used to<br />
describe mobile payments, <strong>and</strong> map these “technological” categories against factors describing the<br />
business setting of procurement <strong>and</strong> settlement, thereby allowing us to effectively accumulate<br />
knowledge, <strong>and</strong> to interpret previous findings (Dahlberg et al., 2008). This framework is based on the<br />
hypothesis that mobility (Gumpp <strong>and</strong> Pousttchi, 2005) is simply an extension of the same<br />
virtualisation technologies that have been used by organisations since the earliest days of information<br />
technology. Rather than considering laptops, PDA’s, smart phones <strong>and</strong> tablets as disruptive<br />
technologies (Christensen, 1997), we take the view that their pervasiveness as access devices to<br />
processes <strong>and</strong> information does not fundamentally alter the relationship between people, processes<br />
<strong>and</strong> technology. Virtualisation provides users with visibility <strong>and</strong> control of resources, <strong>and</strong> mobile<br />
technology should provide this visibility <strong>and</strong> control on the move.<br />
Researchers have adopted different units of anlaysis in studying the evolution of mobile payments,<br />
including exploring the payments market (Dahlberg et al., 2008; Ondrus et al., 2005) in the macroeconomic<br />
sense, payments technologies (Ondrus <strong>and</strong> Pigneur, 2007), or payments technology<br />
adoption factors (Pousttchi, 2003; Plouffe et al, 2001). In this study, we are interested in<br />
underst<strong>and</strong>ing mobile payments as an element of a purchase <strong>and</strong> settlement process. From this<br />
perspective we are not only interested in the footprint of mobile phones in the payments l<strong>and</strong>scape,<br />
but also the topography of that l<strong>and</strong>scape in terms of the actors involved, the nature of the payment<br />
<strong>and</strong> the value to the customer of different levels of payment automation. It is suggested that adding<br />
this value dimension (Osterwalder, 2005; Ondrus et al., 2005) helps to conceptualise mobile<br />
commerce in the context of micro-economic transactions in public, commercial <strong>and</strong> social interactions.<br />
The structure of this paper is as follows. Firstly, we provide an overview of the payments industry <strong>and</strong><br />
why the potential of mobile technology has not (yet) translated into innovative payment instruments.<br />
The specific issues surrounding the adoption of mobile payments are then discussed. Based on<br />
research in this domain we then describe the dimensions that may be used to delineate the different<br />
payment service offerings <strong>and</strong> scenarios, <strong>and</strong> from this an integration framework is presented that<br />
may be used to investigate the relationship between payment service offerings <strong>and</strong> the associated<br />
value proposition from a customer perspective. The final section discusses the theoretical implications<br />
of this paper <strong>and</strong> it’s relevance to existing research.<br />
2. Inertia in the payments industry<br />
Traditionally, the transfer of value from payer to receiver, along with the associated risk, is managed<br />
by a small number of highly centralised intermediaries (banks). Funds are transferred from the payer’s<br />
bank account to the receiver’s bank account via a number of physical or electronic payment<br />
instruments. The key value of these centralised instruments is managing the risk of account holder<br />
liquidity <strong>and</strong> fraud. The cost of managing this risk is recouped by levying “interchange fees” on users<br />
of these payment instruments, merchants <strong>and</strong> consumers. A successful business model has thus built<br />
up around the use of payment cards, which involves charging merchants <strong>and</strong> ultimately customers for<br />
the facility <strong>and</strong> convenience of <strong>using</strong> particular payment instruments. The perceived value for the<br />
customer is access to a universally accepted payment instrument, <strong>and</strong> instant access to significant<br />
lines of credit.<br />
The revenues generated from the provision of payment services have been estimated at $900bn,<br />
representing 25-30% of total bank revenues. Reluctance to move away from a winning formula no<br />
doubt constitutes the principle barrier to faster integration of mobile technology into the payments<br />
ecosystem. Three other factors contribute to the inertia in the evolution of traditional payments<br />
services, related to technical skills, customer expectations <strong>and</strong> management culture. Firstly, many<br />
retail banks run back office payment processing systems that are so old that Universities are now<br />
being solicited to create programming modules focused on legacy development environments such as<br />
Cobol, PL1 <strong>and</strong> RPG, such is the reliance on these systems <strong>and</strong> the associated scarcity of skilled<br />
resources. The costs of re-writing back-end payment processing modules is therefore prohibitive.<br />
Currently internet banking could be characterised as providing a web-based front end to account<br />
information that is embedded in legacy applications, without addressing any other requirements that<br />
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customers might have with respect to liquidity control, budgeting or access to alternative products.<br />
Legacy banking systems were simply not designed to empower customers in this way.<br />
Secondly, the virtualisation of banking <strong>and</strong> the sense of empowerment among smart phone<br />
application users have whetted the account holder’s appetite for a different relationship with his or her<br />
bank. Providing on-line visibility of customer accounts is the first step in controlling expenditure,<br />
supporting customer requirements for flexible payment instruments is the second. Ultimately the<br />
integration of bank accounts with planning tools will empower customers to manage their finances in a<br />
more pro-active way. Exhibitors at the Finovate Europe 2011 event in London showed a marked<br />
tendency towards personal finance management products (PFM), with payment instruments being<br />
seen as lifestyle commodities influenced by customer perceptions of value as communicated in social<br />
networks.<br />
Thirdly, it is likely that management in both the commercial <strong>and</strong> retail banking sectors do not have<br />
experience of the newer forms of collaborative business models familiar to service providers in the<br />
new payments ecosystem. Particularly with respect to mobility <strong>and</strong> payments, it is clear that financial<br />
institutions, in order to achieve critical mass, will have to collaborate with new intermediaries such as<br />
hardware vendors, payment solution providers <strong>and</strong> trusted service managers. The next section<br />
discusses the adoption of mobile payments <strong>and</strong> the likely shape of such a new ecosystem.<br />
3. Adoption of mobile payments<br />
A mobile payment is any payment where a mobile device is used to initiate, authorize <strong>and</strong> confirm an<br />
exchange of financial value in return for goods <strong>and</strong> services (Pousttchi, 2003; Au <strong>and</strong> Kauffman,<br />
2008). Mobile payments emerged in the 2000’s, with early successes in the sale of mobile content<br />
<strong>and</strong> services such as ring tones <strong>and</strong> logos. Later, mobile payments were suggested as an alternative<br />
for micro-payments at point-of-sales systems, where the use of cash had been declining for many<br />
years. Many mobile <strong>and</strong> electronic payment solutions have been introduced ever since, but most of<br />
them have failed or have had a low penetration rate (Mallat, 2007; Dahlberg et al. 2008). The “chicken<br />
<strong>and</strong> egg” situation for emerging payment models means that enough merchants need to be on-board<br />
with any new solution for it to catch on with consumers, but in order to be appealing to merchants<br />
there must be a critical mass of consumers interested. Lee et al. (2004) refer to mobile payment<br />
liquidity as the extent to which it is accepted by sellers <strong>and</strong> therefore adopted by customers. Au <strong>and</strong><br />
Kauffman (2008) refer to the theory of network externalities to explain value creation in the networked<br />
economy, suggesting that the value of such services to banks <strong>and</strong> their customers will increase as the<br />
network grows. St<strong>and</strong>ardisation <strong>and</strong> technology maturity have equally been highlighted as key<br />
requirements for expansion of mobile payments (Mallat et al., 2004; Lee et al., 2004).<br />
So, while the most popular payment instruments are still cash, cheques, debit <strong>and</strong> credit cards<br />
(Dahlberg et al, 2008) with smart cards being the most serious challenger to traditional cash<br />
(Dahlberg <strong>and</strong> Mallat, 2002), the ways to make contactless payments <strong>and</strong> especially mobile payments<br />
are increasing. When looking into the future, companies <strong>and</strong> experts agree that the mobile phone is<br />
the technical device that they will try to turn into the new wallet, mainly because of the diffusion of<br />
mobile phones, which no other technical device can match, but also due to the fact that most of us<br />
carry our mobile phones with us most of the time. If the mobile phone as e-wallet succeeds it will very<br />
likely be at the expense of traditional payment instruments. But it is also a possibility that the mobile<br />
wallet will simply become a new way of entering the current card <strong>and</strong> account-based payment<br />
services (Dahlberg et al., 2008).<br />
Contini et al. (2011) describe the mobile ecosystem as a complex set of interconnected entities <strong>and</strong><br />
relationships which interact to form a stable functioning payments system, with participants including<br />
financial institutions, money service providers, h<strong>and</strong>set makers, technology service providers, mobile<br />
network operators, mobile virtual network operators, merchants <strong>and</strong> consumers. Internationally,<br />
national governments have individually pledged support to developing electronic payment capabilities<br />
as part of the broader adoption of e-Government capabilities, while in Europe, much of this<br />
development has been driven by the establishment of SEPA (Single Euro Payments Area).<br />
Underst<strong>and</strong>ing the importance of these emerging solutions is the key motivation for developing an<br />
integration framework for mobile payments. Webster <strong>and</strong> Watson (2002) describe how theory in the<br />
IS field evolves from ad-hoc classification systems through taxonomies to conceptual frameworks.<br />
There is a need for a “robust analysis framework” (Kauffman <strong>and</strong> Walden, 2001; Au <strong>and</strong> Kauffman,<br />
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2008) to abstract meaning from the myriad technology offerings, <strong>and</strong> indeed to differentiate between<br />
business value <strong>and</strong> technology capability. Practitioners <strong>and</strong> academics require an abstracted view of<br />
the business requirements <strong>and</strong> their solutions in order to design lasting solutions. The next section<br />
outlines the dimensions that can be used to build this abstracted view.<br />
4. Classifying the dimensions of mobile payments<br />
Mobile payment solutions may be described by a number of attributes that relate either to the process<br />
or the technology of making a payment. The process dimension refers to what type of payment is<br />
being made, <strong>and</strong> crucially should include the notion of customer value. The technology dimensions<br />
describe how a payment process works, <strong>and</strong> typically involves the integration of a number of physical<br />
<strong>and</strong> virtual payment instruments.<br />
4.1 The value dimension<br />
The value dimension, described as a market perspective by Ondrus et al. (2005), or as a value taker<br />
perspective by Kauffman <strong>and</strong> Walden (2001), relates to both customer benefits <strong>and</strong> needs<br />
respectively. Ondrus et al. (2005) suggest that it is the failure to address the dem<strong>and</strong> issues that<br />
undermine many payment service offerings. It is therefore suggested that the customer dem<strong>and</strong><br />
(value) dimension be used to characterise mobile payments. This dimension will calibrate customer<br />
value across a “consumer to merchant axis” (Ondrus et al., 2005; Dahlberg et al., 2007). Clearly the<br />
time <strong>and</strong> location independence afforded by the mobile phone user is an advantage (Mallat, 2007;<br />
Kim et al., 2010). Indeed the “anytime, anywhere” accessibility of mobile phones increases merchant<br />
access to location specific consumers, thereby potentially instigating dem<strong>and</strong> <strong>and</strong> increasing sales<br />
opportunities, but not necessarily creating customer value. Customer value, for example, might be<br />
providing the payer with visibility of, <strong>and</strong> direct access to, alternative payment execution options, as<br />
well as related decision support information such as account balances, loyalty points, discounts <strong>and</strong><br />
special terms. The customer value here is created through the information value as distinct from the<br />
mobility value (Gumpp <strong>and</strong> Pousttchi, 2005).<br />
For the purposes of this research, the value proposition is considered to include the context or<br />
scenario (Kreyer et al., 2003) of the purchase <strong>and</strong> payment transaction. This covers the nature of the<br />
goods or service being purchased, where the payment is being made, <strong>and</strong> who is involved. The<br />
nature of the purchase covers, for example, the purchase of physical <strong>and</strong> digital goods, the payment<br />
of utility bills or the purchase of on-line services. The procurement of physical goods by individuals or<br />
organisations may be considered to be part of the supply chain. Supermarket shopping for groceries<br />
<strong>and</strong> household goods (B2C) or raw material purchases by manufacturers (B2B) have the<br />
characteristics of being repetitive, subject to scrutiny on price, <strong>and</strong> sensitive in terms of lead time. The<br />
point of sale may be physical, virtual or both.<br />
All businesses have payment processes for overhead expenditure related to personnel (payroll, tax<br />
<strong>and</strong> expenses), rent, maintenance, catering or hygiene services. Utility payments could be considered<br />
to include energy supply, refuse services, tax, banking services, digital network services <strong>and</strong> digital<br />
content. Transportation related services include local transit tickets, parking, automobile taxation, fuel,<br />
holiday <strong>and</strong> airline payments. Consumer goods might include white goods, electronic equipment,<br />
computer equipment, clothing <strong>and</strong> furniture. Leisure <strong>and</strong> entertainment payments include cinema<br />
tickets, concert <strong>and</strong> event ticketing, use of sports facilities, vending machines <strong>and</strong> access to public<br />
amenities. Digital content includes phone credit, digital media (music, video, newspapers, books, …),<br />
gift vouchers <strong>and</strong> virtual gaming products. Person to person (P2P) payments might include payments<br />
to tradespeople, babysitters, home-helpers, local <strong>and</strong> cross border remittances, micro-payments <strong>and</strong><br />
micro-finance. Charity or fundraising donations constitute a section of “person to non-profit”<br />
organisation payments (P2NP). Social <strong>and</strong> Government payments include welfare, pension <strong>and</strong><br />
health payments (G2C).<br />
On the other h<strong>and</strong>, the context of the payment also distinguishes the location of the payment <strong>and</strong> the<br />
actors involved. For example, payments may be made from a mobile phone at a point of sale, from a<br />
mobile phone remotely, in person at a bank branch, in person at an ATM or payment kiosk, in person<br />
at a post office or credit union branch. Payments may be sent by post, or made over the phone, via a<br />
digital TV service, or through a gaming or digital content interface such as iTunes. Bill payment<br />
services may be made on-line or via physical points of sale such as PayZone <strong>and</strong> PayPoint. On-line<br />
payments may be made via electronic wallets such as PayPal or Boku. Economic definitions of<br />
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commercial actors include shareholders, debtors, creditors, managers, employees, community <strong>and</strong><br />
government (Au <strong>and</strong> Kaufmann, 2008). The purpose of this dimension is to underst<strong>and</strong> where value is<br />
being consumed, <strong>and</strong> by whom.<br />
4.2 The integration dimension<br />
The second dimension for mobile payment attributes relates to the products, instruments or<br />
technologies through which the payments are executed. These attributes describe how the payment<br />
is processed, <strong>and</strong> are independent of both the transaction types or the payment channels discussed<br />
above. This virtualisation axis calibrates the extent to which payment execution has been mobilised<br />
(Gummp <strong>and</strong> Pousttchi, 2005) <strong>using</strong> information technology. Technology or product related aspects of<br />
the mobile payments l<strong>and</strong>scape are more “inward” looking (Dahlberg et al., 2008), defining customer<br />
value making (Kauffman <strong>and</strong> Walden, 2001), as distinct from value taking. This corresponds to the<br />
service provision (vertical axis) on the framework described by Dahlberg et al. (2007). The purpose of<br />
this dimension is to underst<strong>and</strong> where value is being created, <strong>and</strong> by whom.<br />
The payment products include traditional physical instruments such as cash, cheques, coupons, prepaid<br />
gift cards, postal orders <strong>and</strong> bank drafts. Credit transfer instruments include credit cards, debit<br />
cards, Electronic Funds Transfer, Direct Debits <strong>and</strong> St<strong>and</strong>ing Orders. Mobile phone related<br />
instruments include bill to carrier account, bill to credit card account <strong>and</strong> bill to current account (ACH).<br />
Pre-loaded virtual instruments include electronic money accounts (eg. PayPal), virtual gift cards <strong>and</strong><br />
virtual loyalty cards. Payment authorisation options include signatures, passwords (on-line, SMS), PIN<br />
number, Chip, card user verification services, voice authorisation or biometric methods. The degree to<br />
which the payment is integrated into an enterprise or domain driven process defines an interface<br />
dimension including Buy-now, Accounts Receivable, Accounts Payable, Payroll, Expense<br />
disbursement, Bank reconciliation or treasury management. Geographic scope for payments may<br />
include proximity, local, national, European or global. Payments across different currencies should<br />
include exchange rate calculations. The account types from which payments are drawn include<br />
unbanked customers, post office accounts, credit union accounts bank accounts (current, credit,<br />
deposit, savings), commercial or merchant accounts, e-Money accounts, Mobile Network Operator<br />
customer accounts, merchant loyalty account <strong>and</strong> digital media accounts. Account funding<br />
mechanisms include cash loading, SMS with top-up, Direct Debit, wire transfer, electronic funds<br />
transfer, credit transfer by SO/DD from third party bank account, remittances <strong>and</strong> on-line e-Money<br />
transfer. Device connectivity options include credit cards (eg. Visa / Mastercard), debit cards (eg.<br />
Maestro, Cirrus, Laser), Internet (TCP/IP, GPS, WiFi), Bluetooth <strong>and</strong> NFC. Clearing <strong>and</strong> settlement<br />
options include paper (eg. IPCC), electronic (eg. IREPCC), Credit Card <strong>and</strong> ATM. Timing of payment<br />
execution may be in advance, at moment of purchase, days or weeks after purchase.<br />
These two dimensions are correlated in the next section to construct a framework for mobile<br />
payments integration.<br />
4.3 A framework for mobile payments integration<br />
Drawing on the discussion regarding the dimensions of payment integration (virtualisation) <strong>and</strong> value<br />
(merchant to consumer axis) in the previous section, a framework is proposed to conceptualise the<br />
position of mobile payments within the greater context of electronic payments. This framework is<br />
presented in Figure 1. In this framework, payment integration is conceptualised as an ongoing<br />
process of reconciling dem<strong>and</strong> with supply. The degree to which payment processes are integrated,<br />
or supported by electronic means, is recognised as an economic lever in the value proposition to<br />
customers. The information that is valuable for consumers (as individuals or enterprise buyers) in<br />
making payments is defined along two dimensions, one related to the level of visibility of purchase<br />
<strong>and</strong> payment information, <strong>and</strong> one related to control of the transfer of value.<br />
The purchase control dimension maps the gradation between a commitment to purchase <strong>and</strong><br />
settlement of the amount due. This axis is temporal, left to right, in there are stages between the<br />
commitment to purchase <strong>and</strong> the actual transfer of value (ultimately there is value in offering a<br />
consumer the ability to intervene at these stages). The payment integration dimension refers to the<br />
degree to which the attributes of payments (both supply <strong>and</strong> dem<strong>and</strong> related) are known <strong>and</strong><br />
communicated, <strong>and</strong> represents a gradation from traditional physical payments instruments to<br />
increasingly virtual payment instruments. It is only with the virtualisation of payment information that it<br />
is possible compare the cost of a planned expenditure with the actual availability of funds (budget).<br />
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Payment integration<br />
(payment products, instruments, technologies)<br />
Virtual<br />
(emerging)<br />
Physical<br />
(traditional)<br />
Fergal Carton et al.<br />
Budget<br />
visibility<br />
Purchase<br />
Consumer<br />
(dem<strong>and</strong>)<br />
Payment<br />
visibility<br />
Settlement<br />
Merchant<br />
(supply)<br />
Value proposition<br />
(purchase control)<br />
Figure 1: Integration framework for mobile payments<br />
The quadrants represent stages in the value proposition to consumers in electronic payments. The<br />
purchase (bottom left) quadrant represents the buyer’s commitment to purchase. With traditional<br />
physical payments instruments, visibility of budget information is limited. <strong>Information</strong> that would be<br />
valuable to the buyer at this point relate to product supply (for example, price, discount or loyalty<br />
credits), but also related to the available consumer budget. How this information is provided is a<br />
question of integration. The budget visibility quadrant (top left) represents the degree to which visibility<br />
of available funds can be provided. This may also entail electronic decision support tools to inform the<br />
consumer’s decision to purchase.<br />
The settlement quadrant (bottom, right) represents the actual transfer of value from the consumer to<br />
the merchant which may be automated or happen in stages. Payment in cash is instant settlement<br />
whereas payment by card is deferred settlement. The payment visibility quadrant (top right)<br />
represents the degree to which settlement information is available. This visibility provides the<br />
merchant with his confirmed revenue <strong>and</strong> the customer with his real time budget position.<br />
The final section of this paper discusses the practical <strong>and</strong> theoretical implications of this framework.<br />
5. Discussion <strong>and</strong> conclusion<br />
The proposed integrated payment framework highlights the difference <strong>and</strong> relationship between<br />
payment integration <strong>and</strong> value proposition. It also strives to increase theoretical parsimony by<br />
integration of previous literture, such as Ondrues et al. (2005), Mallat (2007), <strong>and</strong> Kim et al., 2010)<br />
into a two by two matrix. The validity of the framework can be assessed by three particular properties:<br />
the integration of the framework (logical coherence), its practical <strong>and</strong> theoretical relevance, <strong>and</strong> its<br />
relative explanatory power (Glaser, 1978). These properties are derived from Glaser’s (1978) work on<br />
theoretical sensitivity <strong>and</strong> have been applied in previous research (Hedman <strong>and</strong> Kalling, 2003). The<br />
logicla coherence is addresssed in the previous section <strong>and</strong> will not be further addressed here.<br />
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There are both practical <strong>and</strong> theoretical aspects to the relevance of the framework. Firstly, it facilitates<br />
discussion of the nature of information required by consumers <strong>and</strong> merchants <strong>and</strong> the associated<br />
value they may place on the automation <strong>and</strong> visibility afforded by payment integration. It can be<br />
understood, for example, that visibility of settlement information requires a level of real-time<br />
interaction with the funding accounts which will have significant technical design implications. By the<br />
same token, budget visibility could be extremely valuable for consumers but may equally imply<br />
sophisticated design scenarios. Where settlement is itself a virtual process (for example, via a PayPal<br />
account), this visibility is provided automatically <strong>and</strong> is of significant value for consumers, so much so<br />
that they are prepared to pay a hefty premium for the service. The visibility provided by traditional<br />
credit card networks for both consumers <strong>and</strong> merchants is significantly less automated, but merchants<br />
will sacrifice margins for the convenience afforded to consumers, who in turn are prepared to pay for<br />
the line of credit. Secondly, the interfaces between the quadrants, represented by the arrows, are<br />
points where integration decisions may be conceptualised. The use of cash versus direct debits<br />
versus online payment can be positioned along the payment integration axis. The question of mobile<br />
payments involving settlement from a bank account, credit card account or carrier account could also<br />
be represented on this axis. Crucially the related visibility of the payment transactions may be<br />
discussed, where the consumer perception of value of a given mobile payment scenario may be<br />
classified in terms of control <strong>and</strong> visibility. Thirdly, the framework provides an overview of the<br />
contribution of payment integration to the value proposition to buyers. On the one h<strong>and</strong>, mobile<br />
payment solution providers offer convenience based services to consumers, <strong>and</strong>, on the other,<br />
consumers have control <strong>and</strong> visibility requirements related to planning for <strong>and</strong> making payments. The<br />
framework allows for the consideration of both these dimensions, <strong>and</strong> in so doing, provides a unique<br />
approach to the evaluation of integration decisions.<br />
The framework is meaningful for the players in the payments ecosystem: financial institutions,<br />
payment solution providers, mobile network operators <strong>and</strong>, ultimately, consumers. Using the<br />
framework, the evaluation of innovative payment technologies can take place in the context of actual<br />
customer value. The framework is developed to conceptualise the driving forces in the mobile<br />
payments industry, in that sense it builds on the existing body of theoretical work (for example, Au<br />
<strong>and</strong> Kauffman, 2008; Ondrus et al., 2005, Mallat, 2007, <strong>and</strong> Kim et al., 2010). Furthermore, it is felt<br />
that the framework brings to center stage the notion of customer value dicussed in such literature.<br />
Further research on this topic should entail validating the framework empirically on a range of different<br />
emergent <strong>and</strong> traditional payment scenarios. Such research should aim to clarify the collaboration<br />
decisions for players in the market for mobile payments. On the basis of these collaboration<br />
decisions, real progress in the provision of consumer oriented payment services that leverage the<br />
“anytime, anywhere” visibility <strong>and</strong> control of the mobile phone might be envisaged.<br />
Acknowledgements<br />
This work was carried with the support of Copenhagen Finance IT Region (www.cfir.dk) <strong>and</strong> was funded by the<br />
Danish Enterprise <strong>and</strong> Construction Authority grant number ERDFH-09-0026. Any opinions, findings,<br />
interpretations, conclusions or recommendations expressed in this paper are those of its authors <strong>and</strong> do not<br />
represent the views of the funding agencies.<br />
References<br />
Au, Y.A. <strong>and</strong> Kauffman, R.J. (2008), The economics of mobile payments: Underst<strong>and</strong>ing stakeholder issues for<br />
an emerging financial technology application, Electronic Commerce Research <strong>and</strong> Applications, (7), pp.<br />
141–164.<br />
Christensen, M. (1997), The Innovator’s Dillemma, Harvard Business School Press, Cambridge, MA.<br />
Contini, D., Crowe, M., Merritt, C., Oliver, R. <strong>and</strong> Mott, S. (2011), Mobile Payments in the United States, Mapping<br />
Out the Road Ahead, in proceedings of the Mobile Payments Industry Workshop, Federal Reserve Banks.<br />
Dahlberg, T., Mallat N., Ondrus, J. <strong>and</strong> Zmijewska, A. (2008), Past, present <strong>and</strong> future of mobile payments<br />
research: A literature review. Electronic Commerce Research <strong>and</strong> Applications, 7(2): pp. 165-181.<br />
Dahlberg, T. <strong>and</strong> Mallat, N. (2002), Mobile payment service development-managerial implications of consumer<br />
value perceptions, Citeseer.<br />
Glaser, B.G. (1978), Theoretical sensitivity. Mill Valle: Sociology Press.<br />
Gumpp, A. <strong>and</strong> Pousttchi, K. (2005), The ‘‘mobility-M’’ framework for the application of mobile technology in<br />
business processes, GI Jahrestagung Informatik, Bonn, Germany, September.<br />
Hedman, J. <strong>and</strong> Kalling, T. (2003), The Business Model Concept: Theoretical Underpinnings <strong>and</strong> Empirical<br />
Illustrations, European Journal of <strong>Information</strong> Systems, 12(1), pp. 49–59.<br />
Kauffman, R.J. <strong>and</strong> Walden, E. (2001), Economics <strong>and</strong> electronic commerce: survey <strong>and</strong> directions for research,<br />
International Journal of Electronic Commerce, 5(4), pp. 5–116.<br />
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Kim,C., Mirsobit, M. <strong>and</strong> Lee, I. (2010), An empirical examination of factors influencing the intention to use mobile<br />
payment, Computers in Human Behavior, 26, pp. 310–322.<br />
Lee, C.P., Warkentin, M. <strong>and</strong> Choi, H. (2004), The Role of Technological <strong>and</strong> Social Factors on the Adoption of<br />
Mobile Payment Technologies, proceedings of the 10th Americas Conference on <strong>Information</strong> Systems<br />
(AMCIS), New York, August, pp. 2781-2786.<br />
Mallat, N. (2007), Exploring consumer adoption of mobile payments - A qualitative study, The Journal of Strategic<br />
<strong>Information</strong> Systems, 16(4), pp. 413-432.<br />
Mallat, N., M. Rossi, <strong>and</strong> V.K. Tuunainen (2004), Mobile banking services, Communications of the ACM, 47(5),<br />
pp. 42-46.<br />
Ondrus, J., Camponovo, G. <strong>and</strong> Pigneur, Y. (2005), A Proposal for a Multi-perspective Analysis of the Mobile<br />
Payment Environment, proceedings of the International Conference on Mobile Business, ICMB’05.<br />
Ondrus, J. <strong>and</strong> Pigneur, Y. (2006),Towards a holistic analysis of mobile payments: a multiple perspectives<br />
approach, Electronic Commerce Research <strong>and</strong> Applications, 5(3), pp. 246-257.<br />
Ondrus, J. <strong>and</strong> Pigneur, Y. (2007), An assessment of NFC for future mobile payment systems, proceedings of the<br />
International Conference on Mobile Business (ICMB’07),Toronto, July, pp. 43-53.<br />
Osterwalder, A., Pigneur, Y. <strong>and</strong> Tucci, C.L. (2005), Clarifying Business Models: Origins, Present, <strong>and</strong> Future of<br />
the Concept, Communications of the Association for <strong>Information</strong> Systems, 16(1), pp. 1-25.<br />
Plouffe, C.R., V<strong>and</strong>enbosch, M., <strong>and</strong> Hull<strong>and</strong>, J. (2001), Intermediating technologies <strong>and</strong> multi-group adoption: A<br />
comparison of consumer <strong>and</strong> merchant adoption intentions toward a new electronic payment system, The<br />
Journal of Product Innovation <strong>Management</strong>, (18), pp. 65-81.<br />
Pousttchi, K. (2003), Conditions for Acceptance <strong>and</strong> Usage of Mobile Payment Procedures, conference<br />
proceedings of the Second International Conference on Mobile Business, Vienna, pp. 201-210.<br />
Webster J. <strong>and</strong> Watson R.T. (2002), Analyzing the Past to Prepare for the Future: Writing a Literature Review,<br />
MIS Quarterly, 26(2), pp. xiii – xxiii.<br />
91
Social Computing Tools for Inter-Organizational Risk<br />
<strong>Management</strong><br />
Walter Castelnovo<br />
University of Insubria, Via Carloni, Italy<br />
walter.castelnovo@uninsubria.it<br />
Abstract: Social computing technologies, tools <strong>and</strong> applications are changing the way in which people <strong>and</strong><br />
organizations communicate <strong>and</strong> interact. Although, the real benefits of an organization’s use of social computing<br />
tools are still unclear, researches found that successful companies not only integrate social computing tools<br />
within their workflows but also use them to create a “networked company”. Both these elements are relevant in<br />
the use of social computing tools for supporting inter-organizational risk management discussed in this paper.<br />
More specifically, with reference to the case of One Stop Shop for production activities in Italy, in the paper I will<br />
show how social computing tools can be used to make more efficient <strong>and</strong> effective inter-organizational risk<br />
management, that can be considered as a form of inter-organizational cooperation for the management of the<br />
risks related to activities involving the joint effort of different organizations. In the first section I will introduce interorganizational<br />
risk management <strong>and</strong> I will describe the Team Risk <strong>Management</strong> (TRM) model, that has been<br />
originally developed to manage risks in software-dependent development programs involving different<br />
organizations. In section 2, I will present a particular cooperation scenario concerning One Stop Shop for<br />
production activities (Sportello Unico per le Attività Produttive – SUAP) in Italy that can be used as a case study<br />
for inter-organizational risk management. In this section I will also show how the TRM model can be modified to<br />
describe the way in which the public agencies involved in the functioning of the SUAP can manage risks at the<br />
inter-organizational level. In section 3 I will show how organizations can integrate social computing tools within<br />
intra-organizational processes to make their risk assessment more efficient <strong>and</strong> effective. Finally, I will show how<br />
social computing tools can also be integrated within the inter-organizational processes that lead different<br />
agencies to share the risk evaluation <strong>and</strong> the risk h<strong>and</strong>ling actions.<br />
Keywords: inter-organizational cooperation, inter-organizational risk management, team risk management,<br />
social computing, eterprise 2.0, government 2.0<br />
1. Introduction<br />
Organizations are continuously faced with the problem of making decisions. Such decisions can<br />
concern many different aspects of an organization’s activity <strong>and</strong> may impact the organization in the<br />
long, medium <strong>and</strong> short term, depending on whether they are strategic, tactical or operational<br />
decisions. Every decision is made within an environment that changes continuously; a possible<br />
uncertainty regarding its eventual outcomes is thus an unavoidable ingredient of any decision, which<br />
could also imply a possible loss for the organization as a consequence of the decision made.<br />
When an organization is required to make a decision in a situation in which there is some uncertainty<br />
with respect to the eventual outcome <strong>and</strong> a possible loss associated with it, the decision making<br />
process involves a risk (Alberts <strong>and</strong> Dorofee 2005). Any organization must deal with risk because it<br />
cannot avoid making decisions. Hence, risk management should be considered as a central part of<br />
any organisation’s strategic management.<br />
Risk management is the process whereby organisations h<strong>and</strong>le the risks attached to their activities on<br />
the basis of st<strong>and</strong>ard tools <strong>and</strong> methodologies. Any risk management system should include<br />
processes for assessing risk (risk identification, analysis <strong>and</strong> evaluation), developing risk-h<strong>and</strong>ling<br />
options, monitoring risks to determine how risks have changed, <strong>and</strong> documenting the overall risk<br />
management programme (see, for instance (ISO 2009) <strong>and</strong> (AIRMIC, ALARM, IRM 2010)).<br />
Communication <strong>and</strong> coordination are of central concern for risk management. Actually, a possible<br />
threat to the organization can be detected anywhere within it; without a well defined communication<br />
<strong>and</strong> reporting policy that allows a prompt assessment <strong>and</strong> evaluation of the potential risk detected, the<br />
effectiveness of risk management can be severely reduced.<br />
Communication is essential also for risk treatment <strong>and</strong> risk monitoring. The implementation of the risk<br />
h<strong>and</strong>ling options can introduce secondary risks that need to be assessed, treated, monitored <strong>and</strong><br />
reviewed. When a risk treatment action is undertaken on a given activity, it cannot be excluded that,<br />
as an indirect consequence of it, a new risk arises with respect to other activities interrelated with that<br />
activity. In order to h<strong>and</strong>le a secondary risk detected as a consequence of a given risk treatment<br />
action, it could happen that some activities, different from the one the risk treatment action has been<br />
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devised for, have to be redefined <strong>and</strong>/or re-scheduled. This means that a manager could be required<br />
to revise his priorities as a consequence of a problem affecting an organizational unit different from<br />
the one it is responsible of. This rises a serious coordination problem within organizations.<br />
This coordination problem arises because of the interdependencies among some activities that have<br />
to be performed by different units within the same organization. Such a coordination problem arises,<br />
even with a higher evidence <strong>and</strong> a stronger impact, in the case of inter-organizational cooperation,<br />
where the interdependencies among activities can cross the organizational boundaries. Interorganizational<br />
cooperation entails that the activities performed by one of the partners, as well as the<br />
decisions it makes, can affect the other partners’ actions <strong>and</strong> decisions, thus affecting their capability<br />
of pursuing their strategic mission. This is a form of organizational risk that could affect the partners<br />
both as individual organizations <strong>and</strong> as members of an inter-organizational cooperation. In order to<br />
h<strong>and</strong>le these risks, an inter-organizational risk management system should be implemented by the<br />
partners of the cooperation, namely a system whose goal is to more effectively allow organizations to<br />
share information <strong>and</strong> perform necessary activities with regard to risk management that may affect<br />
their collective behaviour (Meyers 2006).<br />
The Team Risk <strong>Management</strong> (TRM) approach described in (Higuera et al. 1994) defines methods <strong>and</strong><br />
tools that can be used to manage risks at the inter-organizational level. In the TRM approach three<br />
types of risk management processes are considered: (i) an intra-organizational process executed<br />
independently by each partner organization (the Baseline Risk Assessment); (ii) a set of continuous<br />
processes implemented as both intra <strong>and</strong> inter-organizational; (iii) an inter-organizational process<br />
conducted jointly by the partners (the Team Review Process). The TRM model can be summarized as<br />
in figure 1:<br />
Figure 1: The team risk management approach<br />
The risk management process begins with the baseline risk assessment that allows all the partners to<br />
individually identify the risks that are associated with their respective organizations. These risks are<br />
shared <strong>and</strong> jointly evaluated through the team review that combines the most important risks<br />
identified by the partners into a list of the most important risks detected. The continuous processes<br />
comprise a cyclic set of activities, by means of which each partner manages risks at the intraorganizational<br />
level <strong>and</strong>, through a repeated execution of the team review process, at the interorganizational<br />
level, as well.<br />
Such activities involve the partners both individually, since they are required to efficiently <strong>and</strong><br />
effectively manage the risks that could arise in the execution of the activities allocated to them, <strong>and</strong><br />
collectively, since there could be the need of flexibly <strong>and</strong> dynamically reconfiguring the execution of<br />
the inter-organizational workflow to cope with unexpected situations. When the execution of the interorganizational<br />
workflow is constrained by strict temporal requirements, both these types of risk<br />
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management activities must be performed promptly in order that the whole process is concluded<br />
within the expected terms.<br />
In the next section I will briefly describe a particular cooperation scenario concerning One Stop Shop<br />
for production activities (Sportello Unico per le Attività Produttive – SUAP) in Italy, that will be used as<br />
a case study for inter-organizational risk management. I will also show how the TRM model can be<br />
used to describe how the public agencies involved in the functioning of the SUAP can manage risks at<br />
the inter-organizational level. The discussion of the case study will lead to the necessity to modify<br />
some aspect of the TRM model in order to make inter-organizational risk management more efficient<br />
<strong>and</strong> effective in a context constrained by strict temporal requirements.<br />
2. A case study in inter-organizational risk management<br />
As part of the policies for reducing the administrative burdens for enterprises, from the late ‘90s Italian<br />
municipalities have been required to implement, either individually or by resorting to some form of<br />
intermunicipal cooperation, the One-Stop Shop for Production Activities (SUAP) as the single point of<br />
access to services <strong>and</strong> information for business offered by different public authorities.<br />
In 2010 the Italian Government took new initiatives to make it easier starting, transforming or closing a<br />
business. Not only were new measures defined in order to favour the complete digitalisation of the<br />
SUAP, but even the procedures for starting, transforming or closing a business have been further<br />
simplified by turning the current legislation from the traditional ex ante authorization regime into an expost<br />
controls regime. Under this regime, a new business can be started up simply through a<br />
communication (Segnalazione Certificata di Inizio Attività – SCIA, Certified Communication of the start<br />
of the activity) submitted online to the SUAP through the national portal www.impresainungiorno.it.<br />
The online procedure is such that it guarantees that the SCIA contains all the required information<br />
<strong>and</strong> that all the required documents have been attached (if the communication is incomplete it is<br />
rejected). A SCIA that has been checked for completeness gets registered to the system that<br />
automatically sends a receipt to the applicant. Upon receiving this receipt, an entrepreneur can start a<br />
new business without necessarily having to wait for the SUAP to complete the required controls. This<br />
is the main reason why the new ex-post controls regime is expected to make it easier to start a<br />
business in Italy.<br />
Upon registering the SCIA the SUAP has to operate all the required controls within an interval of time<br />
defined by the law (60 days). If any of the controls detects some inadequacy, then the business can<br />
be stopped (either temporally until the inadequacy will be removed or definitively, if the inadequacy<br />
can not be removed), otherwise it can operate without requiring any further authorizations.<br />
The new legislation did not reduce the number of public agencies <strong>and</strong> authorities having competences<br />
concerning starting, transforming or closing a business. This means that, depending on the type of<br />
the business, the controls that have to be operated may involve both the municipalities <strong>and</strong> other<br />
public agencies. In such a situation, in order to satisfy the requirements stated by the law, the SUAP<br />
has to implement an effective <strong>and</strong> efficient system for the management of a variety of ex-post controls<br />
involving different public bodies.<br />
Given the lack of resources affecting them, the public agencies involved in the processing of a SCIA<br />
could have difficulties to promptly operate the ex-post controls. In such a situation the only way to<br />
safeguard the public interest is by identifying what controls really need to be operated, based on a<br />
careful analysis of the potential risks the SCIAs that have been submitted to the SUAP could entail.<br />
Since the individual decision of each agency can have consequences on the final result of the<br />
processing of a SCIA, thus affecting the other authorities' activities <strong>and</strong> decisions, it is necessary for<br />
all the actors involved to share both their evaluation of the potential risks it could entail <strong>and</strong> their<br />
decisions whether or not to perform some controls on it. This can be done by integrating the risk<br />
management processes provided by the TRM model within the SUAP’s workflow.<br />
Figure 2 below describes such an integration, based on the SUAP’s workflow as defined by the Italian<br />
legislation in force (Castelnovo 2011). After registering a SCIA submitted to it, the SUAP sends the<br />
relevant documentation to all the agencies having competences on it. Upon receiving the documents,<br />
the agencies individually perform the baseline risk assessment process, with the aim of identifying all<br />
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the potential risks that SCIA could entail. By <strong>using</strong> st<strong>and</strong>ard tools for risks analysis <strong>and</strong> evaluation (for<br />
instance those described in (IMA 2007), through this step each partner is thus able to associate to the<br />
SCIA under processing a level of risk, with respect to the matters on which he has competence.<br />
Besides evaluating the potential risks involved, during this phase each partner can also plan the<br />
execution of their control activities on that SCIA. The timing of these activities depends both on the<br />
level of risk detected <strong>and</strong> on the other activities in which that agency is possibly already occupied.<br />
The team review allows the partners to jointly evaluate the SCIA on the basis of the potential risks<br />
each one of them identified individually, thus arriving at a shared risk evaluation. Such an evaluation<br />
forms the basis for determining the more adequate risk treatment strategy to assume among<br />
accepting, rejecting or h<strong>and</strong>ling the risks.<br />
Figure 2: Integration of TRM within the SUAP’s workflow<br />
In the case we are considering, accepting the risk means that the team evaluation is such that the<br />
level of risk of the SCIA is not ranked high; thus, also considering the other constraints that could<br />
possibly limit the partners’ activities, there is no particular problem in delaying, <strong>and</strong> even possibly<br />
avoiding, the ex-post controls. Rejecting the risk amounts to recognizing that the SCIA does not<br />
involve any particular risk <strong>and</strong> could thus be treated in terms of a silent-assent procedure. Finally,<br />
h<strong>and</strong>ling the risk means adopting mitigation plans with the aim of reducing the risks involved in the<br />
SCIA by implementing appropriate risk mitigation actions. Such actions will amount to the competent<br />
authorities planning <strong>and</strong> performing all the required ex-post controls with a timing that will allow the<br />
processing of the SCIA to be completed within the terms provided by law (60 days).<br />
Once defined <strong>and</strong> agreed on by all the participants to the team review, each partner has to implement<br />
its own risk h<strong>and</strong>ling actions, according to the timing defined by the team review. As observed above,<br />
the execution of the risk h<strong>and</strong>ling options can introduce secondary risks that need to be managed.<br />
These risks can be determined by the occurrence of unforeseen situations that could affect the<br />
partners’ capacity to execute the risk h<strong>and</strong>ling actions within the terms agreed on. Such risks should<br />
be promptly identified <strong>and</strong> treated since a delay in one partner’s activity could affect the final result of<br />
the processing of a SCIA. Moreover, because of the potential consequences they could have on the<br />
other partners’ activities, the emergence of these risks should be promptly communicated to the<br />
partners, in order to let them assume all the measures apt to cope with the new situation.<br />
In the TRM model this can be done by a repeated execution of the team review process. However,<br />
due to the strict temporal constraints the processing of a SCIA must satisfy, in the situation we are<br />
considering the team review process cannot be implemented simply as a periodic meeting among the<br />
partners, as it is considered in (Higuera et al. 1994). Since in this case the reiteration cycles of both<br />
the team review process <strong>and</strong> the continuous processes must be much shorter than those described in<br />
the original model, all these processes should rather be implemented as continuous communication<br />
processes through which people belonging to the same organization, as well as people from different<br />
organizations, interact continuously on a daily basis.<br />
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This rises two questions: (i) what risk management processes can be made more efficient <strong>and</strong><br />
effective, <strong>and</strong> how this can be done; (ii) what technologies <strong>and</strong> tools can be used to make these<br />
processes more effective <strong>and</strong> efficient, both at the intra-organizational <strong>and</strong> at the inter-organizational<br />
level.<br />
The baseline risk assessment is as a typical intra-organizational process that, in the SUAP example,<br />
must be performed by all the public agencies involved in the processing of a SCIA. Besides the<br />
competences required for <strong>using</strong> the st<strong>and</strong>ard methodologies for risk assessment mentioned above, in<br />
order to properly assess the potential risks involved in a SCIA, the specific competences related to<br />
the particular object of that SCIA are required. Such technical competences are more likely to be<br />
owned by people who belong to different units within the same organization. This rises the problem of<br />
how these people can be efficiently <strong>and</strong> effectively involved in the risk management process.<br />
The team review, that is the core of the TRM model, is intended to achieve multiple results, some of<br />
which strictly related to the execution of the continuous processes: (i) allowing the partners to arrive at<br />
a shared risk evaluation; (ii) allowing them to agree on the risk h<strong>and</strong>ling actions each partner must<br />
implement <strong>and</strong> the timing for their execution; (iii) sharing the information concerning the monitoring of<br />
the implementation of the risk h<strong>and</strong>ling actions; (iv) allowing them to agree on how redefining the risk<br />
h<strong>and</strong>ling actions <strong>and</strong> their timing to treat the possible secondary risks detected during the execution of<br />
the continuous processes.<br />
Based on these observations, figure 3 summarizes the requirements (A1-A4 <strong>and</strong> B1-B4) that should<br />
be satisfied by the tools that can be used in order to make both the Baseline Risk Assessment <strong>and</strong><br />
the Team Review process more efficient. In the next section I will show how all these requirements<br />
can be satisfied by some well known social computing tools.<br />
Figure 3: Functionalities needed to support inter-organizational risk management<br />
3. Social computing tools for supporting inter-organizational risk<br />
management: An overview<br />
As pointed out in (Higuera et al. 1994), communication (both formal <strong>and</strong> informal) represents a<br />
fundamental component for all the risk management processes the TRM model comprises. On the<br />
one h<strong>and</strong>, through communication all the actors involved in the inter-organizational risk management<br />
processes can build <strong>and</strong> reinforce a shared vision, create a sense of collective ownership <strong>and</strong><br />
responsibility, enhance inter-organizational trust, which can make the cooperation more effective <strong>and</strong><br />
easier to manage. On the other h<strong>and</strong>, at the operative level, communication enhances the interactions<br />
among all the actors involved, both at the intra-organizational <strong>and</strong> at the inter-organizational level, <strong>and</strong><br />
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allow the information relative to risks <strong>and</strong> their management to be shared among them, which makes<br />
inter-organizational management effective. All these fundamental aspects of the TRM model can<br />
benefit from the use of social computing technologies <strong>and</strong> tools to support the risk management<br />
processes.<br />
Social computing services (SCSs) can be considered as a set of applications that enable people to<br />
efficiently interact with other people, as well as sharing content <strong>and</strong> data, through the Web (Young<br />
2007). Whereas publicly available SCSs are already widely diffused for private use (Pascu 2008),<br />
their adoption <strong>and</strong> use by enterprises <strong>and</strong> Government is still quite limited, although it is widely<br />
expected that the adoption of SCSs would have a high positive impact on both enterprises <strong>and</strong><br />
Government.<br />
Figure 4 below gives a schematic overview of the more common SCSs, grouped with respect to the<br />
four basic functionalities provided by social computing: messaging, collaboration, broadcasting <strong>and</strong><br />
knowledge building. Some of these services (the white area) are already widely used by<br />
organizations, both for internal purposes <strong>and</strong> for customer related purposes. Others are being<br />
increasingly adopted by organizations (the light gray area), others again (the dark gray area) are still<br />
quite rarely used, although the greatest value is expected from their adoption. (Bughin, Chui <strong>and</strong><br />
Miller 2009)<br />
In this section I will consider the opportunity of <strong>using</strong> some of the SCSs included in figure 4 to satisfy<br />
the requirements listed in the figure 3 above in an efficient <strong>and</strong> effective way. In doing so, my aim is<br />
not to discuss in any detail the properties of the different SCSs that I consider; rather, my aim is<br />
simply to show where they could be beneficially used within the risk management processes provided<br />
by the TRM model.<br />
Figure 4: Social computing services (based on (Doculabs 2010))<br />
The requirement A1 of figure 3 above concerns the identification of the people (domain experts) to<br />
involve in the baseline risk assessment (<strong>and</strong> in the routine risk identification <strong>and</strong> analysis, as well),<br />
that can be considered as a case of expertise management. A way to satisfy the requirement A1 is by<br />
requiring all the organizations involved in the SUAP’s activity to associate an expertise profile to each<br />
of their knowledge workers (or some of them), so that they can be available to public search (either<br />
automatically or manually). This can be done by transforming the usual “directory of people” from the<br />
“yellow pages” model to a social network model, analogous to the IBM’s “Blue Pages” described in<br />
(Richter <strong>and</strong> Riemer 2009). Besides making the search of experts easier, representing expertise<br />
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Walter Castelnovo<br />
through social network profiles also allows the possibility of making the expertise description more<br />
reliable by means of social filtering mechanisms that can be used to further qualify the level of<br />
expertise of registered experts.<br />
By resorting to this solution, upon receiving a SCIA the SUAP can prompt all the agencies involved to<br />
activate the concurrent execution of their baseline risk assessment processes through the following<br />
steps:<br />
Identify all the agencies that need to be involved in the processing of that SCIA<br />
Identify what are the competences required to properly assess the potential risks involved in that<br />
SCIA<br />
Search the network (by means of a social network search engine) for people with the required<br />
competences<br />
Send the relevant documentation directly to the people identified in step 3, irrespective of the<br />
organization they belong to (this step accounts also for the requirement A2 of figure 3)<br />
A different approach to searching the experts (that could also be integrated in the searching of profiles<br />
approach) is by means of microblogging. Microblogs are normally used by people to provide updates<br />
on their activities, observations <strong>and</strong> interesting content, directly or indirectly to others. However,<br />
based on data concerning the IBM’s microblogging application BlueTwit, (Ehrich <strong>and</strong> Shami 2010)<br />
found that workplace employees are mostly <strong>using</strong> the tool to post information, engage in brief directed<br />
conversation <strong>and</strong> asking help from colleagues. This suggests the possibility of <strong>using</strong> a microblog post<br />
to identify the people to involve in the baseline risk assessment; this could be done in the form of a<br />
request for help to which people with the required competences answer. By means of the same post,<br />
these people get also informed of the fact that their advices are needed, thus satisfying the<br />
requirement A2 as well.<br />
A further alternative could be implemented by means of automatically generated RSS feeds instead of<br />
microblogs posted by people allocated to the SUAP.<br />
Microblogs can be used in all the situations in which the people involved need to be promptly<br />
informed of the occurrence of potentially critical events, as in the case of a partner’s detection of a<br />
secondary risk arising during the execution of the risk h<strong>and</strong>ling actions he is in charge of. In this case,<br />
as he detects the secondary risk, a partner can post a microblog with which all the other partners can<br />
be informed of it, almost in real time, <strong>and</strong> thus be prepared to define, <strong>and</strong> share, the most adequate<br />
measures to cope with the new situation. Thus, by resorting to microblogging also the requirements<br />
B2 <strong>and</strong> B3 can be satisfied.<br />
Blogs represent a powerful tool for sharing expertise, improving cooperation <strong>and</strong> enabling business<br />
intelligence creation (see, for instance, (Andrus 2005) <strong>and</strong> (Kolari et al. 2007)). In the case we are<br />
considering, blogs can be used to satisfy also the requirements A4, B1 <strong>and</strong> B4. Actually, upon<br />
receiving a SCIA, the manager responsible for the functioning of the SUAP can initiate a blog devoted<br />
to its risk assessment. The managers responsible for risk assesment (both the baseline risk<br />
assessment <strong>and</strong> the routine risk identification <strong>and</strong> analysis) within the organizations involved in the<br />
processing of the SCIA can post comments on the blog, thus sharing their evaluation (i) of the<br />
potential risks involved (for their organizations); (ii) of the need of performing the ex-post controls; <strong>and</strong><br />
(iii) of the timing for the execution of the controls. This allows:<br />
The definition of a shared risk profile for the SCIA under processing (requirement A4)<br />
A shared decision concerning whether to perform the controls, <strong>and</strong> when (requirement B1),<br />
possibly also by resorting to polling mechanisms, that can be integrated quite easily in a blog<br />
A shared planning of the execution of all the ex-post controls (whatever organization is<br />
responsible for each control activity), compatible with the other activities each partner has to<br />
perform as part of his normal activity (requirement B4)<br />
Blogs can be used to share information <strong>and</strong> decisions both at the inter-organizational <strong>and</strong> at the intraorganizational<br />
level. In this case, the use of blogs would allow the manager responsible for the<br />
internal risk assessment to collect information <strong>and</strong> advices that could be useful for a sound risk<br />
assessment from people within the organization (whatever unit they belong to).<br />
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Walter Castelnovo<br />
Risk assessment, <strong>and</strong> risk treatment as well, can be made more efficient <strong>and</strong> effective when<br />
information concerning previous experiences can be used to derive useful insights on how to treat the<br />
case at h<strong>and</strong>. One way to do this is by allowing the use of tools that enable groups to jointly create<br />
<strong>and</strong> share content; WIKIs are typical collaborative tools that can be used to this end, even in critical<br />
contexts (as those described in (Wagner 2004) <strong>and</strong> (Andrus 2005)). In the processing of a SCIA,<br />
blogs can be used to make a shared risk assessment <strong>and</strong> a shared risk treatment strategy emerge<br />
from the collaborative effort of people belonging to different organizations (as well as to different units<br />
within the same organization); WIKIs, instead, can be used to document the whole risk assessment<br />
<strong>and</strong> risk treatment processes for that SCIA. The intrinsic collaborative nature of the WIKI enables<br />
documents to be written collectively by all the people involved in the risk management <strong>and</strong> the risk<br />
treatment processes (whatever organization they belong to), thus allowing a more structured,<br />
complete, reliable <strong>and</strong> useful documentation of the way a SCIA has been treated. Moreover, the<br />
possibility of <strong>using</strong> tags (both content tags <strong>and</strong> meta-information tags) <strong>and</strong> links to organize the<br />
content of WIKI pages makes it particularly easier to find the information needed, thus allowing a<br />
more efficient use of past experiences in both the risk assessment <strong>and</strong> the risk treatment processes.<br />
From this point of view, by <strong>using</strong> WIKIs to document the risk management processes also the<br />
requirement A3 in figure 3 above can be satisfied.<br />
4. Conclusions<br />
In the paper I considered the opportunity of <strong>using</strong> SCSs to make inter-organizational risk<br />
management efficient <strong>and</strong> effective, especially in contexts in which there are strict temporal<br />
requirements to satisfy. In the discussion I did not consider neither the technical aspects of SCSs nor<br />
the challenges that the adoption of SCSs poses for organizations, both at the technical <strong>and</strong> at the<br />
managerial level. Despite these challenges, the number of successful examples of enterprises <strong>and</strong><br />
government organizations adopting SCSs is continuously growing <strong>and</strong> the success conditions for<br />
SCSs adoption are becoming more <strong>and</strong> more clear. In particular, the best practices show that the<br />
highest chances of success depend on the integration of the new tools within existing workflows <strong>and</strong><br />
on their application to the core activities of the organization, so that their use is not perceived by the<br />
employees simply as another “to do” on an already crowded list of tasks.<br />
Risk management represents a central component of any organisation’s strategic management; from<br />
this point of view, the one discussed in the paper represents an interesting case for the application of<br />
SCSs. Moreover, in the paper risk management has been considered from the perspective of interorganizational<br />
cooperation; in the present interconnected world organizations will be more <strong>and</strong> more<br />
involved in inter-organizational cooperation. Thus, the problems discussed here, as well as the<br />
solutions suggested, are likely to be more <strong>and</strong> more central for organizations. Finally, the adoption of<br />
the new participatory technologies <strong>and</strong> tools within the TRM model exemplified in section 3 is such<br />
that the SCSs are directly integrated within existing workflows, thus satisfying also this success<br />
condition for the organizations’ adoption of Web 2.0 technologies.<br />
References<br />
AIRMIC, ALARM, IRM (2010), A structured approach to Enterprise Risk <strong>Management</strong> (ERM) <strong>and</strong> the<br />
requirements of ISO 31000, Association of Local Authority Risk Managers (ALARM) <strong>and</strong> The Institute of<br />
Risk <strong>Management</strong> (IRM).<br />
Alberts, C.J. <strong>and</strong> Dorofee, A.J. (2005), Mission Assurance Analysis Protocol (MAAP): Assessing Risk in Complex<br />
Environments,TECHNICAL NOTE, CMU/SEI-2005-TN-032, Carnegie Mellon University.<br />
Andrus, D.C. (2005), The Wiki <strong>and</strong> the Blog: Toward a Complex Adaptive Intelligence, Central Intelligence<br />
Agency, Washington, DC., 2005.<br />
Bughin, J., Chui, M., Miller, A. (2009). How companies are benefiting from Web 2.0, McKinsey Global Survey<br />
Results, The McKinsey Quarterly, 2009.<br />
Castelnovo, W. (2011), “Risk management in a Cooperation Context”, 11 th European Conference on e-<br />
Government (ECEG), Ljubljana, Slovenia, 16-17 June 2011.<br />
Doculabs (2010), Social Computing <strong>and</strong> Collaboration for the Enterprise: Enabling <strong>Knowledge</strong> Workers<br />
Productivity, Doculabs white paper, Chicago, USA.<br />
Ehrlich, K., Shami, N. S. (2010), “Microblogging inside <strong>and</strong> outside the workplace”, 4 th AAAI Conference on<br />
Weblogs <strong>and</strong> Social Media, Washington, DC, May 23-26, 2010.<br />
Higuera, R. P., Gluch, D. P., Dorofee, A. J., Murphy, R.L., Walker, J.A. <strong>and</strong> Williams, R. C. (1994), An<br />
Introduction to Team Risk <strong>Management</strong>. (Version 1.0), Special Report CMU/SEI-94-SR-1, Carnegie Mellon<br />
University.<br />
IMA (2007), Enterprise Risk <strong>Management</strong>: Tools <strong>and</strong> Techniques for Effective Implementation, Institute of<br />
<strong>Management</strong> Accountants.<br />
ISO (2009), ISO 31000:2009, International Organization for St<strong>and</strong>ardization.<br />
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Kolari, P., Finin, T., Lyons, K., Yesha, Y., Yesha, Y., Perelgut, S., Hawkins, J. (2007), “On the structure,<br />
properties <strong>and</strong> utility of internal corporate blogs”, Proceedings of the International Conference on Weblogs<br />
<strong>and</strong> Social Media (ICWSM 2007).<br />
Meyers, B.C. (2006), Risk <strong>Management</strong> Considerations for Interoperable Acquisition, TECHNICAL NOTE,<br />
CMU/SEI-2006-TN-032, Carnegie Mellon University.<br />
Richter, A., Riemer, K. (2009), Corporate Social Networking Sites - Modes of Use <strong>and</strong> Appropriation through Co-<br />
Evolution, 20th Australasian Conference on <strong>Information</strong>, 2-4 Dec 2009, Melbourne.<br />
Pascu, C. (2008), An Empirical Analysis of the Creation, Use <strong>and</strong> Adoption of Social Computing Applications,<br />
JRC Scientific <strong>and</strong> Technical Reports, European Communities.<br />
Wagner, C. (2004), “Wiki: A Technology For Conversational <strong>Knowledge</strong> <strong>Management</strong> And Group Collaboration”,<br />
Communications of the Association for <strong>Information</strong> Systems, 14, 2004.<br />
Young, O. (2007), Topic Overview: Web 2.0, Forrester Research, April 10, 2007.<br />
100
Embedding Human Values Into <strong>Information</strong> System<br />
Engineering Methodologies<br />
Sunil Choenni 1, 2 , Peter van Waart 2 <strong>and</strong> Geert de Haan 2<br />
1<br />
Research <strong>and</strong> Documentation Centre, Ministry of Justice, The Hague, The<br />
Netherl<strong>and</strong>s<br />
2<br />
Rotterdam University of Applied Sciences, The Netherl<strong>and</strong>s<br />
r.choenni@minjus.nl<br />
p.van.waart@hr.nl<br />
g.de.haan@hr.nl<br />
Abstract Many people are concerned about how information systems deal with human values such as privacy<br />
<strong>and</strong> trust. In this paper, we discuss the role of human values in the design of information systems. We elaborate<br />
on the nature of human values <strong>and</strong> discuss various approaches on how to address human values to prepare for<br />
system design. We discuss the meaning of values like 'privacy' <strong>and</strong> 'trust' in the area of healthcare <strong>and</strong> public<br />
safety. Subsequently, we illustrate our considerations, exemplifying how privacy <strong>and</strong> trust might be embedded in<br />
a healthcare system to monitor dementia patients <strong>and</strong> how privacy might be embedded in a public safety system.<br />
Finally, we discuss how human values may be addressed in the process of developing <strong>and</strong> implementing<br />
information systems.<br />
Keywords: human values, trust, privacy, healthcare, public safety, system engineering methodologies<br />
1. Introduction<br />
Through the years we have witnessed many failures of information system projects due to several<br />
reasons, ranging from communicational <strong>and</strong> organizational issues to technical ones. One such issue<br />
is a lack of communication <strong>and</strong> cooperation between technical- <strong>and</strong> business-oriented people <strong>and</strong> the<br />
(end) users of the systems. Business-oriented people usually focus on their wishes with regard to<br />
information system applications rather than on the feasibility of the system functionalities. It has<br />
turned out to be difficult to convince them of the unfeasibility of certain functionalities in an information<br />
system application. On the other h<strong>and</strong>, technical-oriented people work on information system<br />
applications from their own point of view <strong>and</strong> underst<strong>and</strong>ing <strong>and</strong> may implement all kinds of novel <strong>and</strong><br />
advanced functionalities without conferring with the (end) users about their needs. Often, these<br />
functionalities are considered as obstacles by the (end) users.<br />
To deal with these issues, the research <strong>and</strong> business communities have proposed many solutions<br />
<strong>and</strong> best practices, such as methodologies <strong>and</strong> techniques for the development cycle of information<br />
systems, project management tools <strong>and</strong> frameworks for the socio-technical approach. While the<br />
methodologies <strong>and</strong> techniques to support the development cycle of information systems <strong>and</strong> project<br />
management tools are mainly focused on the development of information systems in a proper way,<br />
the socio-technical approach focuses on developing a proper information system that should be of<br />
use to its users. The socio-technical approach encourages successive meetings in which developers,<br />
users <strong>and</strong> stakeholders discuss the functionalities/requirements of the information system to be<br />
built. These meetings are required until the proposed functionalities/requirements of all groups fit<br />
seamlessly (Laudon <strong>and</strong> Laudon, 1999). Recently, research questions related to a successful<br />
introduction of information systems in an organization drew the attention in many fields, such as<br />
healthcare, government, education <strong>and</strong> so on. Some issues that have been identified in the<br />
successful introduction of information systems in organizations are modelled in the so-called<br />
Technology Acceptance Model (TAM) (Davies, 1989; Venkatesh et al., 2003). In the basic TAM, the<br />
influence of determinants on technology acceptance is mediated by two individual beliefs: perceived<br />
ease of use <strong>and</strong> perceived usefulness. Perceived ease of use refers to the degree to which a person<br />
believes that <strong>using</strong> a particular system would be free of effort <strong>and</strong> perceived ease of usefulness refers<br />
to the degree to which a person believes that <strong>using</strong> a particular system would enhance her job<br />
performance. Meanwhile more advanced TAMs tailored to specific domains, such as healthcare (Wu<br />
et al., 2008), are reported. Nevertheless, many information systems do not seem to meet important<br />
requirements of the user, yet. As a consequence, these systems are often used inefficiently.<br />
In this paper, we focus on the role of human values in the acceptance of technology, especially<br />
information systems. In general, human values have a subjective <strong>and</strong> philosophical nature on a first<br />
glance. Furthermore, human values are open to different interpretations depending on the context.<br />
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Sunil Choenni, Peter van Waart <strong>and</strong> Geert de Haan<br />
However, research in the field of human values has made this notion more seizable <strong>and</strong> applicable in<br />
several disciplines, such as industrial product development <strong>and</strong> marketing. Based on the insights that<br />
have been reported about human values we have made a number of them operational <strong>and</strong><br />
demonstrated how they may serve as (soft) requirements in developing information systems. We have<br />
elaborated the value ‘privacy’ in the fields of healthcare <strong>and</strong> public safety <strong>and</strong> the value ‘trust’ in the<br />
field of healthcare. <strong>Information</strong> systems, in which privacy is a major issue, have a better chance of<br />
being accepted if privacy is taken into account as a system requirement from the start of their<br />
development. As expected, privacy appeared to be a complex requirement to fulfil <strong>and</strong> needs to be<br />
enforced at a different level in a system. We have found that trust between caretaker <strong>and</strong> patient in<br />
healthcare is an important value that should not be replaced by information systems. The deployment<br />
of information systems is accepted in this field as long as it is regarded as an extension of the<br />
caretaker or patient. For example, a robot taking patients in a wheelchair to bed may not be accepted<br />
by the patients. However, if the robot is perceived as an extension of a human caretaker, the robot<br />
seems to be fully accepted.<br />
We have learned from our projects that the interpretation of human values is indeed context<br />
dependent <strong>and</strong> requires an effort to make them operational. Since the interpretations of human values<br />
are hard to capture in formal languages, we propose to use the elicited interpretations of human<br />
values as a set of guidelines through the design of an information system rather than as hard<br />
requirements that can be tested once the system is implemented. We propose to embed the<br />
guidelines in each development phase of an information system. Furthermore, after introducing an<br />
information system in practice, we argue for an evaluation phase which has a.o. as goal to determine<br />
to what extent human values are implemented successfully.<br />
The remainder of this paper is organised as follows. In section 2, we elaborate on the nature of<br />
human values. In section 3, we illustrate how privacy <strong>and</strong> trust are embedded in a healthcare system<br />
<strong>and</strong> how privacy is embedded in a public safety system. In section 4, we discuss how to embed<br />
human values in system engineering methodologies. Finally, section 5 concludes the paper.<br />
2. Human values<br />
A widely used definition of human values has been given in (Rokeach,1973). He defined a human<br />
value as “an enduring belief that a specific mode of conduct or end state of existence is personally or<br />
socially preferable to an opposite or converse mode of conduct or end state of its existence”.<br />
(Schwartz,1992) elaborated on the work of (Rokeach, 1973) <strong>and</strong> determined that values refer to<br />
desirable goals, that values are ordered by their importance relative to one another <strong>and</strong> that the<br />
relative importance of multiple values guides the actions of people. In (Bourdieu, 1984) it is revealed<br />
with an extensive empirical study, how human values determine amongst others people’s attitudes<br />
<strong>and</strong> opinions, lifestyle choices <strong>and</strong> consumption preferences. This is how one feels connected to<br />
others with similar value profiles <strong>and</strong> how one can distinguish oneself from others with different value<br />
profiles. That is why human value research proved to be an excellent way to make consumer<br />
segmentations in order to develop products <strong>and</strong> business propositions that suits one’s personal goals<br />
in life at best (Gutman 1982; Ascheberg <strong>and</strong> Uelzhoffer 1991).<br />
In the field of Human Computer Interaction (HCI), (Friedman 1996, 2006) coined the term valuesensitive<br />
design (VSD). Friedman argued that computer systems are biased by the values of their<br />
designers <strong>and</strong> engineers which may not match the value profiles of their users, but do enforce the<br />
worldview of their makers. (Shneiderman, 1999) already made a call to designers before, in 1990, to<br />
be aware of their responsibilities for designing systems that empower human values rather than<br />
endanger them. It could even be observed that computer code was sometimes functioning as<br />
regulation of society <strong>and</strong> laws were derived from this practice afterwards (Van den Hoven, 2007).<br />
When values are ordered by their importance relative to another <strong>and</strong> when this ordering distinguishes<br />
individuals from each other, then the question arises how system design should meet user values of<br />
larger populations. Conflicting value systems may occur when one person finds privacy more<br />
important than safety where for another person it may be the other way around. What implications<br />
would this have for, for example, safety control at airports where rather intrusive technology might be<br />
used for the sake of safety? Would it be possible to design this system in such a way that it respects<br />
the value profile of both persons? As the next step in the shift from the system, via the user, to the<br />
context of use, (Cockton 2004) proposes value-centered design (VCD). Compared to VSD, VCD does<br />
not try to put human values in the centre of the design process, but rather focuses on the value that is<br />
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Sunil Choenni, Peter van Waart <strong>and</strong> Geert de Haan<br />
delivered as a result of the system, <strong>and</strong> that is perceived as valuable by people. Since value is a<br />
broad term that encompasses human values, value of use as well as economical value, (Cockton,<br />
2006) later renames VCD to worth-centered design (WCD) to distinguish it better from VSD. It is clear<br />
that WCD then is able to avoid the ethical aspects of design but also focuses less on a solution to<br />
resolve the issue of conflicting human value systems.<br />
In (Harper et al. 2008), it is argued that technologies can be designed to support human values but<br />
also to violate them. Given conflicting values, systems should be acknowledged as well as the context<br />
for which the technology is designed: privacy in a family context differs from privacy in a working<br />
environment. Therefore, the research <strong>and</strong> design cycle of study-design-build-evaluate is extended<br />
with an initial <strong>and</strong> new stage of underst<strong>and</strong> in which the human values designed for, are researched<br />
<strong>and</strong> considered. An interesting attempt to overcome conflicting values in design processes has been<br />
conducted by (Iversen et al., 2010). In a Participatory Design project stakeholders were facilitated by<br />
the designers to negotiate their value st<strong>and</strong>points continuously in a dialog. This complies with the idea<br />
of meaningful design (Van Waart, 2011) that discusses the requirements for systems design to<br />
facilitate social interaction between people <strong>and</strong> aid people’s goals in life.<br />
In our approach, we investigate the underlying human values of privacy <strong>and</strong> trust issues. Depending<br />
on the context of use <strong>and</strong> the personality of the users, it can be argued that trust <strong>and</strong> privacy are<br />
reflections of human values (Schwartz, 1992) such as conformity, security <strong>and</strong> self-direction. We have<br />
taken the participatory design approach to make the values privacy <strong>and</strong> trust operational in order to<br />
come up with a number of requirements that healthcare <strong>and</strong> public safety information systems should<br />
meet. In the next section, we discuss these requirements <strong>and</strong> how they are enforced in designing <strong>and</strong><br />
implementing the systems.<br />
3. Embedding human values in healthcare <strong>and</strong> public safety systems<br />
Privacy <strong>and</strong> trust are important human values in healthcare, while privacy plays an important role in<br />
public safety. Trust is an important aspect of relationships between people. When one (who trusts) is<br />
vulnerable to harm from someone else but believes that the other will not harm him although he could<br />
(trustee), then that is a matter of trust; balancing the harm we risk <strong>and</strong> the good we expect from<br />
others, <strong>and</strong> behaving upon that (Friedman et. al., 2006). Trust is always a trade-off between benefits<br />
<strong>and</strong> risks. Betrayal or lack of trust jeopardise the relationship people have with one other. In the health<br />
sector, the relationship between physicians <strong>and</strong> patients is extremely important <strong>and</strong> second only to<br />
family relationships, resulting in high expectations of patients, as the ones who trust, in healthcare<br />
systems (Erdem & Harrison-Walker, 2006). Interestingly, in an extensive literature review of trust in ehealth<br />
systems, it has been determined that trust influences users’ perceptions but does not<br />
necessarily affect their patterns of use (e.g. their behaviour) (Hardiker & Grant, 2011).<br />
Although privacy plays a role in healthcare as well as in public safety, the interpretation given to this<br />
value differs in these domains as will be illustrated in the two following subsections. While in the<br />
context of public safety privacy is primarily focussed toward the disclosure of the identity of<br />
individuals, in healthcare the main focus is on observing <strong>and</strong> keeping track of someone.<br />
3.1 Healthcare: privacy <strong>and</strong> trust as system requirements<br />
Today, small-scale ho<strong>using</strong> for dementia patients is gaining interest. The goal of the small-scale<br />
ho<strong>using</strong> project is to increase the quality of life of dementia patients by offering substitutes to the<br />
traditional nursing home. Approximately six dementia patients live together in such a house. The<br />
small-scale houses are often equipped with infrared sensors. These sensors are often used to alert<br />
staff in case a psycho-geriatric patient might need assistance, for example, because of a high risk of<br />
falling. Falling out of bed may cause fractures, which are costly to recover, especially in the case of<br />
elderly people. The frequency of false positive alarms is an often heard complaint. A false positive<br />
alarm may occur if for example the blanket or eiderdown falls down to the ground during the sleep.<br />
Responding to every alarm will cost valuable time of staff due to the large working area <strong>and</strong> may<br />
cause alarm fatigue. To deal with the problem of false positive alarms, in (Schikhof et al., 2010) the<br />
small-case houses are equipped with camera recorders, microphones <strong>and</strong> a server in addition to the<br />
infrared sensors. The microphones are required to distinguish between the falling of a blanket <strong>and</strong> the<br />
falling of a patient, for example, which make different kinds of sound. The server is used to process<br />
the signals of the sensors <strong>and</strong> the microphones. Whenever a threshold value is reached, the camera<br />
sends the images to the responsible staff, e.g., on their pda, see Figure 1.<br />
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Sensor 1<br />
Sensor n<br />
Camera<br />
Sunil Choenni, Peter van Waart <strong>and</strong> Geert de Haan<br />
micro<br />
phone<br />
sensor<br />
data<br />
images<br />
sound<br />
Server<br />
images<br />
images<br />
media,<br />
(e.g., pda)<br />
media,<br />
(e.g., pda)<br />
Figure 1: Design of a health care system<br />
In the design of Figure 1, the issues of privacy <strong>and</strong> trust are taken care of in a manner that is<br />
acceptable for the patients <strong>and</strong> their relatives as well as for the staff. Since the server sends pictures<br />
to the staff, the patients <strong>and</strong> their relatives are ensured that the staff cannot watch the movements of<br />
the patients when not necessary, <strong>and</strong> therefore their privacy is not violated. The initial resistance<br />
against placing a camera in the house was taken away when the privacy of the patient is guaranteed.<br />
Furthermore, the system may be regarded as an extension of the staff <strong>and</strong> definitely not as a<br />
replacement of the staff. The staff can make an assessment of the situation in a house on the basis of<br />
the images on distance. When required, the staff can visit the house.<br />
This case illustrates a problem that needed to be solved given the requirements that trust <strong>and</strong> privacy<br />
should be respected. To come up with a solution as in Figure 1, one first needs to make the notions of<br />
trust <strong>and</strong> privacy operational in the context of healthcare. Questions that need to be addressed are:<br />
trust between whom <strong>and</strong> whose privacy? When is it acceptable to violate part of trust <strong>and</strong> privacy?<br />
By answering these questions <strong>and</strong> successive questions which were raised from the answers, the<br />
notions of trust <strong>and</strong> privacy are refined such that they can be embedded in the architecture of a<br />
system.<br />
3.2 Public safety: Privacy as system requirement<br />
Public safety is considered to be one of the cornerstones of an affluent <strong>and</strong> healthy society. After the<br />
9/11 events, we have seen a tremendous increase in the budget for the enforcement of public safety<br />
in many countries. Many organizations directly or indirectly involved in the enforcement of public<br />
safety started to collect <strong>and</strong> to publish safety related data. Policy makers have a practical need for<br />
statistical insights into public safety at different geographical levels of a society, ranging from the<br />
national to the regional level. For this purpose, data from several sources should be integrated <strong>and</strong><br />
stored in a uniform manner. In (Choenni & Leertouwer, 2010), a tool is presented that collects <strong>and</strong><br />
processes safety related data from relevant sources <strong>and</strong> presents it in an integrated <strong>and</strong> uniform way<br />
to users. The following types of issues can be addressed by the tool:<br />
Simple quantification. For example, the user could ask how many people in a region within a time<br />
period responded in a specific way to a specific survey question.<br />
Contextualisation of a quantifier. For example, how does the growth or decline of a specific figure<br />
in a geographical region relate to another figure. For example, increasing bicycle thefts in a<br />
neighbourhood can turn into a relative decline when local population growth exceeds it. This<br />
contextualisation must be considered in order to underst<strong>and</strong> the public safety data.<br />
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Similarity queries, i.e. looking for regions that are similar in some respect. After querying for a<br />
specific data set in which some numbers st<strong>and</strong> out in some way, the user can query the tool for<br />
other regions that show similar numbers or trends.<br />
Major components of the tool are a data warehouse <strong>and</strong> an interface layer. Aggregated data collected<br />
from different databases at various regional levels are cleaned up <strong>and</strong> stored in the data warehouse.<br />
Furthermore, the data warehouse contains only attributes that meet up with the Dutch Personal Data<br />
Protection (PDPA) act. The PDPA dem<strong>and</strong>s the correct <strong>and</strong> thorough processing <strong>and</strong> collecting of<br />
personal data for clearly defined, explicit <strong>and</strong> justified goals. For example, the PDPA distinguishes a<br />
category of sensitive data that needs special attention, namely data on someone’s religion or life<br />
conviction, ethnic origin, political conviction, health, sexual orientation <strong>and</strong> memberships of employer’s<br />
organizations. Data that pertain to these attributes are not stored in the data warehouse.<br />
The interface layer consists of two modules, an input module, called the mashup module <strong>and</strong> a<br />
presentation module. The mashup module helps a user to define his information need in a userfriendly<br />
manner, like click-<strong>and</strong>-drag facilities. For the user of the tool, no knowledge is needed of<br />
either SQL or the underlying data warehouse structure. The user may also specify how the output<br />
should be presented. Before presenting the output, the presentation module performs some checks to<br />
minimize the violation of the privacy of individuals. For example, if there are just two sexual offenders<br />
in a region, this number will not be presented because there is a reasonable chance to deduce the<br />
persons concerned with some additional information.<br />
This case illustrates a problem that needed to be solved given the requirement that the privacy law<br />
<strong>and</strong> regulations should be respected. In this case, the notion of public safety should be made<br />
operational <strong>and</strong> how the notion of privacy is related to safety in order to come up with an acceptable<br />
solution. To prevent the violation of the privacy of individuals, privacy is taken care of at different<br />
components in the tool, <strong>and</strong> therefore embedded thorough the tool. We stress that only aggregated<br />
data <strong>and</strong> attributes that meet up with the PDPA act are stored in the data warehouse. Furthermore,<br />
whenever it appears that there is a risk of violation of a person’s privacy at the interface layer, the<br />
result will not or will only be partly shown to a user.<br />
4. From human values to system requirements<br />
An obvious goal of software development is that the system meets the stated requirements. However,<br />
complete <strong>and</strong> explicit requirements are rarely available, especially for contemporary complex<br />
systems. The user <strong>and</strong> the developers often have an incomplete underst<strong>and</strong>ing of the problem, <strong>and</strong><br />
therefore the requirements evolve during the development of the system, which is expected to be a<br />
solution for the problem. To support the development <strong>and</strong> implementation of a system, different<br />
variants of system engineering methodologies are available. Most of them distinguish more or less the<br />
same phases:<br />
Specification: the functionality of the system <strong>and</strong> its operating constraints are specified in detail,<br />
often in a formal language.<br />
Design: the overall structure, including the architecture, of the system is defined <strong>and</strong> specific<br />
components of the system are distinguished.<br />
Implementation: the system is implemented by means of a set of application software, such as<br />
programming languages, database management systems <strong>and</strong> other packages <strong>and</strong> libraries.<br />
Testing: the overall system is tested. Often the system is tested by feeding it with a set of input<br />
<strong>and</strong> checking whether the output by the system meets the expected output. In some sensitive<br />
branches, such as military systems, testing is done by tracking the percentage of code that is<br />
walked through for a set of given input, the so-called code coverage method.<br />
Operation: the system is delivered for <strong>using</strong> in practice.<br />
We note that in practice the above-mentioned steps are applied iteratively. In developing <strong>and</strong><br />
implementing an information system, the first phase may be marked as crucial since the successive<br />
phases take the output of the first phase as input for further development of the system. Although it is<br />
possible to go back to the first phase from any other phase in the development process, large scale<br />
changes of the functionality <strong>and</strong> requirements are often not encouraged, for reasons such as:<br />
completion of the system will be delayed, the development of the system will exceed the given<br />
budget, <strong>and</strong> so on. Therefore, it is worth the efforts to define all functionalities <strong>and</strong> requirements<br />
carefully <strong>and</strong> as extensive as possible. In the following we focus on the requirements. Although there<br />
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Sunil Choenni, Peter van Waart <strong>and</strong> Geert de Haan<br />
are many tools available to elicit the requirements which a system should meet, ranging from defining<br />
several scenarios to protocol analysis, none of them are focussed explicitly toward requirements with<br />
regard to human values in the context of system engineering <strong>and</strong> how to express them in a formal<br />
language or embedding them in the architecture of a system.<br />
Mumford’s Ethics (1983) is among the first design process methods which pays considerable attention<br />
to human values; based on the idea that systems should not be imposed on people but rather<br />
address the needs of all stakeholders in a balanced way. In addition to job design goals like job<br />
satisfaction, efficiency <strong>and</strong> knowledge needs, she proposes to distinguish ethical or social values as<br />
an additional factor that should fit between what employees want <strong>and</strong> what they receive. Ethics<br />
should specifically be able to address the socio-cultural value-dimensions, like e.g. Individualism,<br />
Collectivism <strong>and</strong> Masculinity, Femininity, to distinguish between work- <strong>and</strong> other social cultures across<br />
the globe.<br />
The so-called Sc<strong>and</strong>inavian approach (Kyng, 1994) finds its basis in the worker-emancipation<br />
movement of the 1960’s. A key principle in the Sc<strong>and</strong>inavian approach is that designs should fit the<br />
way of working, thus requiring participatory design practices. Apart from participatory design, the<br />
approach also insists that attention is paid to the context of use, resulting in contextual design (Beyer<br />
<strong>and</strong> Holtzblatt, 1998) <strong>and</strong> situated design (Suchman, 1987), <strong>and</strong> that attention is paid to the working<br />
culture, thus giving raise to ethnographic analysis <strong>and</strong> design (Hughes et al., 1993). The number of<br />
different design approaches associated with the Sc<strong>and</strong>inavian approach indicates that design is<br />
rather situated <strong>and</strong> eclectic <strong>and</strong> that there is no such thing as a structured method (Kyng 1994;<br />
Suchman, 1987).<br />
We have learned from our projects that the interpretation of human values is indeed context<br />
dependent <strong>and</strong> requires an effort to make them operational. As illustrated in section 3, privacy is<br />
interpreted differently in the case of public safety than in the healthcare case. While in the public<br />
safety case privacy pertains to prevent the disclosure of an individual, in the health-care case the<br />
identity of the person is fully known. To find the proper interpretation of human values in a given<br />
context is a first step to make them operational <strong>and</strong> to specify them in a non-ambiguous way.<br />
Although to our best knowledge there are no specific tools or methods in system engineering that are<br />
focussed towards eliciting human values, existing tools <strong>and</strong> methods for eliciting implicit domain<br />
knowledge from experts may be used to elicit human values <strong>and</strong> its interpretations. So far, our<br />
experiences are that the interpretations are hard to capture in a set of formal specifications expressed<br />
in language. Therefore, we propose to use the elicited interpretations of human values as a set of<br />
guidelines through the design of an information system rather than as hard requirements that can be<br />
tested once the system has been implemented.<br />
To learn whether we have captured the proper interpretation of human values <strong>and</strong> have embedded<br />
the human values in a proper way, we propose to engage end users in all of the above-mentioned<br />
phases during an iterative design process.<br />
Specification process: Insights in value profiles can be gained through proven methods such as<br />
means-end-chain analysis (Gutman, 1982). This will result in generic insights rather than specific<br />
user requirements that would form the basis for system specifications by experts.<br />
Design: During the design process, design choices are made that involve trade-offs in privacy <strong>and</strong><br />
trust issues. Several alternatives can be validated by confronting end users with use-scenarios or<br />
prototypes <strong>and</strong> make end users give values to the different trade-off options.<br />
Implementation: Engineers should keep the end users’ human values in mind when developing<br />
the system. Design choices should not be fed by the world view of engineers only; engineers<br />
should adopt a mentality that keeps the values of end users in mind.<br />
Testing: When testing the system, not only functional features should be tested but also the<br />
effects on the end user experience <strong>and</strong> perception of usage, aesthetics <strong>and</strong> symbolic meaning<br />
(Van Waart, 2011).<br />
Operation: When the system is implemented in the daily context of use, specific attention should<br />
be paid to user acceptance <strong>and</strong> usage of the system. Does the system really empower end users<br />
in their activities <strong>and</strong> is the system perceived as a contribution to their well-being?<br />
At the end, we propose to distinguish an additional phase in system engineering methodologies: the<br />
evaluation phase. In this phase, the central question that should be answered is: has the proper<br />
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Sunil Choenni, Peter van Waart <strong>and</strong> Geert de Haan<br />
information system been implemented? In other words, has an information system been delivered that<br />
meets the requirements of the user <strong>and</strong> which relevant human values are embedded? The measures<br />
perceived ease of use <strong>and</strong> perceived ease of usefulness might be important ingredients of the<br />
evaluation. We note that while in the field of social sciences there is an abundance of literature <strong>and</strong><br />
methods available to perform evaluations studies, knowledge about how to perform evaluations of<br />
information systems is in its childhood. How to set up an evaluation phase in system engineering<br />
requires research. However, good practices from evaluation studies in social sciences may be<br />
transformed to the distinguished evaluation phase.<br />
5. Conclusions<br />
Systems design involves the cooperation between different stakeholders with different interests <strong>and</strong><br />
values. In this paper we investigated human values <strong>and</strong> the role of human values in the area of<br />
systems design, in general. We exemplified the role of <strong>and</strong> difficulties in dealing with human values<br />
with two cases, derived from healthcare <strong>and</strong> public safety, respectively. The cases indicated some of<br />
the difficulties in identifying <strong>and</strong> particularly adhering to human values throughout design processes.<br />
Many different approaches have been suggested to deal with the values <strong>and</strong> interests of diverse<br />
stakeholders; an issue which will only become increasingly important when information systems are<br />
not only used to facilitate processes such as registration <strong>and</strong> administration but also start to have a<br />
direct role in people's lives.<br />
On the basis of our analysis, we conclude that we need to undertake three things. First, identify the<br />
human values in the requirement-gathering <strong>and</strong> the analysis processes in a good way, such that,<br />
early on in the design process, we will able to identify the human values at stake <strong>and</strong> explicitly agree<br />
upon those values that the proposed design should incorporate. In order to identify the human values<br />
that a design might affect, incorporate or neglect, we need to develop or adapt the specific tools <strong>and</strong><br />
techniques that enable us to do so, <strong>and</strong> presumably, to enable us to monitor the state of the humanvalue<br />
requirements periodically, during the entire design process. Secondly, an additional process<br />
step to identify the human values relating to design projects is only useful if the outcomes of such an<br />
evaluation process are used to steer the project. What is required here is that, at least, at the start of<br />
a design project, all stakeholders should be able to decide whether or not to go on with the design. In<br />
addition, an evaluation near the end of the development process, for example, as part of the<br />
acceptance test, could be used to assess whether the design has indeed fulfilled its human-value<br />
requirements <strong>and</strong> is 'safe' for use in the real world. Thirdly <strong>and</strong> finally, especially given that our<br />
software systems are increasingly connected to the outside world <strong>and</strong> are not longer living in the<br />
splendid isolation behind the data-entry office, we should extend the employment of human-focussed<br />
design methods.<br />
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108
Evaluating the Role <strong>and</strong> Potential of Internet Banking: The<br />
Creditis Experience<br />
Renata Paola Dameri<br />
University of Genova, Italy<br />
dameri@economia.unige.it<br />
Abstract: Online banking has become a pervasive phenomenon that has profoundly affected the nature of<br />
banking <strong>and</strong> the financial institution products portfolio. Yet the challenges for banks are more <strong>and</strong> more difficult,<br />
as Internet is a mature <strong>and</strong> widespread instrument, not able for itself to create distinctive <strong>and</strong> competitive<br />
advantage. Banks should therefore use Internet to support their own specific strategic actions well aligning the<br />
technological aspects <strong>and</strong> the business goals. In this work the author presents an analysis of Banca Carige<br />
business case, to show how it sucessfully addressed its specific innovation program based on the Internet, to<br />
overcome some difficulties due to the globalisation <strong>and</strong> the increased competition on financial markets. The key<br />
issue of this success are: the focus on three key aspects: innovation, strategic alignment, evaluation; the<br />
structured methodology used to align market challenges <strong>and</strong> strategic goals with the use of Internet; the clear set<br />
out of the expected benefits, respect to the strategic goals of the initiative.<br />
Keywords: CRM, Internet banking, cost/benefits evaluation, strategic ICT<br />
1. Introduction<br />
During the latest ten years, banking has been changing for several reasons.<br />
Banking globalisation <strong>and</strong> financial markets widening produced lower barriers to entry <strong>and</strong> higher<br />
competitiveness.<br />
Higher competitiveness requires banks to reduce the price of their common products, but gaining<br />
higher margins by more efficiency on one side <strong>and</strong> distinctive products <strong>and</strong> services on the other.<br />
The global market <strong>and</strong> the role of Internet in the financial sector brought about new actors able to<br />
deliver financial services at lower cost, <strong>using</strong> more innovative channels <strong>and</strong> especially the web<br />
site.<br />
Customers are more exigent <strong>and</strong> hard to please; they are open to change bank if they think they<br />
are not well served.<br />
Recent financial sc<strong>and</strong>als caused lack of confidence in financial institutions; customers need to<br />
gain trust in their bank again.<br />
These aspects moved banks <strong>and</strong> financial institutions to face the more difficult environment with<br />
policies <strong>and</strong> strategic choices, aiming to defend their market share <strong>and</strong> preserve their customers’<br />
loyalty. ICT is one instrument, able to support banks strategic efforts in creating more effective<br />
customer relationships. The role of information systems in banking has ever been crucial. However, in<br />
the past, operational aspects have been more important; the Internet moved the attention towards the<br />
relational aspects, especially with customers. Financial institutions could use their web site to develop<br />
new retailing chains, to improve their relationships with their customers or to deliver new products.<br />
Internet could be a strategic weapon to improve quality, specificity, diffuseness <strong>and</strong> timeliness of<br />
financial services. Moreover, the web site, supported by specific instruments such as analytic CRM,<br />
could collect crucial information about bank customers <strong>and</strong> their behaviour <strong>and</strong> preferences in <strong>using</strong><br />
financial services. However, to obtain such results banks should clearly define their aims, align ICT<br />
instruments with their strategic goals <strong>and</strong> evaluate the returns. Not ever these activities are effectively<br />
defined <strong>and</strong> exploited.<br />
In this paper, the author aims to analyse the role of Internet <strong>and</strong> web sites in developing new financial<br />
services <strong>and</strong> more effective relationships with bank customers. The paper is divided into two sections.<br />
The first section focuses on the diffusion of web sites in banking, the adoption rate of Internet in<br />
financial services supply <strong>and</strong> the amount of expenditure in ICT <strong>and</strong> Internet projects by banks. It also<br />
deepens the use of Internet <strong>and</strong> web sites related to specific strategic goals <strong>and</strong> the role of ICT in<br />
reaching them. Literature shows poor surveys <strong>and</strong> studies about the effectiveness of web sites in<br />
realising banking strategies, especially regarding customers loyalty <strong>and</strong> trust. The paper analyses the<br />
type of expected benefits from web sites <strong>and</strong> Internet projects, trying to define a set of evaluation<br />
instruments, able to measure the impact of ICT expenditure on gained benefits.<br />
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Renata Paola Dameri<br />
In the second section of the paper a business case is studied, to demonstrate that it is possible:<br />
To use Internet <strong>and</strong> the web site to collect information about customers’ behaviour <strong>and</strong><br />
preferences <strong>and</strong> to use this information to pursue specific strategic goals;<br />
To link strategic goals with ICT projects <strong>and</strong> performance, <strong>and</strong> to measure the obtained results;<br />
To evaluate the effectiveness <strong>and</strong> the return on investments of web projects.<br />
2. Diffusion of internet in financial institutions<br />
Banks <strong>and</strong> financial institutions have ever been top ICT spenders; also nowadays banks account for a<br />
large share of total ICT spending all over the world: in 2009 they accounted for the 10% of the total<br />
spending in ICT (Global Insight 2009). Historical trends show that ratios between ICT spending <strong>and</strong><br />
operational cost or gross margin are ever higher than the average in other industries <strong>and</strong> business<br />
sectors (OECD 2010). During the latest 50 years, ICT in banks has been especially used for<br />
supporting operational activities. Thanks to ICT, banks have been able to exp<strong>and</strong> their activities,<br />
gaining higher efficiency <strong>and</strong> offering better services to their customers at adequate prices.<br />
However, ICT in banks has also been used to innovate business models <strong>and</strong> services; from ATM to<br />
web banking, all technologies have been adapted to bank specific products, to realize both ICTsupported<br />
internal processes, <strong>and</strong> ICT-based customer services. During the latest ten years, Internet<br />
<strong>and</strong> the web have been the most important technology for banks. Indeed, Internet is a flexible<br />
technology, able to cover several aspects of data processing: from process automation, to data<br />
storage, from information management to customer communication. For these reasons, Internet is a<br />
common instrument, but able to transform business models in several ways: from simple virtual<br />
replication of traditional business models, to creation of completely new business models (Wielki<br />
2010).<br />
If we analyze bank service portfolios, we can note that almost all financial services are influenced by<br />
the use of the Internet. However, several financial services are indeed based on old business models,<br />
but modernized by product or infrastructure virtualization. For example, the on-line current account is<br />
no more than the old current account, but the business infrastructure is virtualized. Credit cards are a<br />
new product, based on the virtualization of both the product (the electronic money) <strong>and</strong> the business<br />
infrastructure on which payment is based.<br />
As financial business is an intangible product, the use of ICT <strong>and</strong> the Internet is particularly useful in<br />
banking. Indeed, banks <strong>and</strong> financial institutions aim to gain several benefits from the use of ICT <strong>and</strong><br />
the Internet in their activities, both in operational internal processes <strong>and</strong> in offering services to their<br />
customers. We can list a set of expected benefits from Internet in banking from more traditional use to<br />
more innovative one (see the Wielki model):<br />
To improve the efficiency of banking business processes, reducing manual operations <strong>and</strong><br />
execution time;<br />
To customize financial services;<br />
To create innovative channels to sell financial services;<br />
to create innovative relationships with their own customers;<br />
To create a value constellation, including the customer in the service production activity <strong>and</strong><br />
therefore in the value chain (Normann <strong>and</strong> Ramirez 1993).<br />
Therefore, the use of the Internet is a potential success factor for financial institutions, as they could<br />
invest in a low cost technology <strong>and</strong> to gain several benefits, from different value drivers of their<br />
business. However, Internet is also very widespread in banking; financial institutions have been very<br />
fast in adopting web-based applications, web sites <strong>and</strong> so on. Therefore, it is not possible to gain<br />
competitive advantage in banking simply based on Internet adoption. Perhaps Internet has been a<br />
strategic weapon during the first stage of its adoption in business; but opportunities for advantage are<br />
not available indefinitely. Internet is nowadays a commodity <strong>and</strong> no more a success factor nor for<br />
financial institutions, not for other business. Indeed, Internet is a resource essential for competition<br />
<strong>and</strong> banks are not able to compete or survive on financial markets without Internet both in internal<br />
processes <strong>and</strong> in services for the customers (Carr 2003).<br />
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For these reasons, bank ICT strategies should move towards a double-level use of the Internet: at the<br />
basis level, Internet is adopted like a common resource <strong>and</strong> it is used with the aim to support<br />
efficiency in business process, reducing the operational <strong>and</strong> capital expenditures connected with the<br />
aodption of web-based applications; at the high level, Internet is used like a strategic lever to support<br />
specific strategic aims.<br />
This second use of Internet needs a different approach, not based on the relations between ICT<br />
expenditure (to control or reduce) <strong>and</strong> process efficiency (to improve <strong>and</strong> optimize), but on three value<br />
driver linked each others, innovation, alignment, evaluation:<br />
Innovation means to shift ICT expenditure from operational functioning to innovative projects;<br />
Alignment means to coordinate ICT <strong>and</strong> Internet investments with business strategies,<br />
considering also internal control <strong>and</strong> external communications;<br />
Evaluation means not to invest in ICT <strong>and</strong> the Internet without strategic assessment of the project,<br />
return measurement <strong>and</strong> success evaluation of each web-based initiative.<br />
3. Innovating services, aligning business strategy <strong>and</strong> evaluating the obtained<br />
results: The Creditis experience<br />
The Banca Carige Group is one of the six leading banking, insurance <strong>and</strong> pension groups in Italy. It<br />
has more than 1,000 sales outlets (bank branches <strong>and</strong> insurance agencies) based throughout Italy,<br />
<strong>and</strong> over 2 million customers who are either households, professionals, small <strong>and</strong> medium-sized<br />
businesses <strong>and</strong> cottage industries. Besides the Parent Company, Banca Carige, the Group includes<br />
another four banks (Cassa di Risparmio di Savona, Cassa di Risparmio di Carrara, Banca del Monte<br />
di Lucca, Banca Cesare Ponti), the asset management company Carige Asset <strong>Management</strong> Sgr, <strong>and</strong><br />
the insurance companies Carige Assicurazioni (non-life insurance) <strong>and</strong> Carige Vita Nuova (life<br />
insurance).<br />
Carige is also the majority shareholder of Creditis Servizi Finanziari, a company specialized in<br />
consumer credit. This paper introduces the business case of Valea, the Creditis revolving credit card<br />
realising an on-line product based on consumer credit. Valea is very simple to use: the customer<br />
obtains from Banca Carige an overcraft limit; it is credited to Valea. Paying by Valea the overcraft limit<br />
is reduced, <strong>and</strong> the customer replaces it by monthly installments. Valea is not a simple credit card, not<br />
only because it is based on a funding contract, but also because each customer can customize his<br />
own card <strong>using</strong> the online customised service available on the web site of Creditis. Therefore, Valea<br />
incorporates in a credit card a loan self-managed by the customer.<br />
This business case explains how Banca Carige used some evaluating instruments – both before <strong>and</strong><br />
after the introduction of its new product Valea – to align ICT instruments with its strategies, to<br />
innovate its financial services <strong>and</strong> to measure the success of this initiative. Indedd, Internet is very<br />
widespread in banking; therefore, the use of web sites <strong>and</strong> other Internet instruments is no more a<br />
strategic weapon. To obtain satisfying results by financial products based on Internet, three positive<br />
behaviour are needed:<br />
To support strategic choices based on the use of Internet in banking with alignment between<br />
specific strategic aims <strong>and</strong> specific ICT technonolgies <strong>and</strong> applications;<br />
To real innovate the financial product or service <strong>using</strong> the Internet to change one or more of its<br />
characteristics;<br />
To define an integrated instrument to both support the choices <strong>and</strong> the desing of new financial<br />
services in the development phase, <strong>and</strong> to measure the obtained returns in the postimplementation<br />
phase.<br />
Sometimes to designing an evaluation instrument to support both the ex-ante choices <strong>and</strong> the ex-post<br />
assessment is complex; in other cases, it is not so difficult to reshape classic evaluation models just<br />
for a specific business need. In this business case, I suggested to Banca Carige to adopt the<br />
Henderson <strong>and</strong> Venkatraman ICT alignment model to both analize <strong>and</strong> define their strategic path, <strong>and</strong><br />
to assess the results after the first implementation; this also to judge if their investment produced the<br />
expected benefits <strong>and</strong> if they wanted to continue the project or not.<br />
The well known Henderson <strong>and</strong> Venkatraman model (Fig. 1) defines how a company should both<br />
creates a strategic fit between its internal organization structures <strong>and</strong> its external strategies, <strong>and</strong> in<br />
the meantime to create a functional integration between business <strong>and</strong> ICT. This model is a real<br />
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manifesto of IT/business alignment; it introduces a guide for IT <strong>and</strong> business managers, to drive their<br />
ICT choices <strong>and</strong> investments, not only to obtain the best results from them, but also to build the base<br />
of the computerised company, able to exploit all the best of next improvements in information<br />
technology during the following years.<br />
This model could be applied also to Internet banking. Indeed, considering the Wielki model <strong>and</strong><br />
comparing it with the Henderson <strong>and</strong> Venkatraman one, <strong>and</strong> also with the consideration of Carr, we<br />
can argue that:<br />
Internet is a mature technology for banking;<br />
To obtain business benefits from Internet banking, new business models should be defined,<br />
linking ICT, Internet technologies <strong>and</strong> strategies in financial services;<br />
To define new business models, ICT <strong>and</strong> strategic business choices should be aligned,<br />
considering the Internet technology available in the environment like a commodity <strong>and</strong> defining<br />
new products, services <strong>and</strong> financial strategies around it.<br />
Banca Carige developed its own Alignment&Evaluation Instrument, applying the Henderson <strong>and</strong><br />
Venkatraman model in the Coleman <strong>and</strong> Papp version called “IT Infrastructure Fusion” (Fig. 2). It<br />
assumes ICT technologies as given <strong>and</strong> considers two implementation paths: the first paths moves<br />
from business strategy across organization (business process, products <strong>and</strong> services), to the ICT<br />
infrastructure; the second path ever moves from the business strategy, across ICT strategy <strong>and</strong> to<br />
ICT infrastructure too.<br />
Figure 1: ICT <strong>and</strong> business strategic alignment: Henderson <strong>and</strong> Venkatraman model (source:<br />
Henderson <strong>and</strong> Venkatraman, 1992)<br />
Using this implementation model Banca Carige was able to define its own Alignment&Evaluation<br />
Instrument both to support its decision about a new financial service based on Internet technology –<br />
Valea Card – <strong>and</strong> to evaluate the obtained results after the impementation <strong>and</strong> launch on the market<br />
of this new product. The business case is here described following the structure of this instrument,<br />
that is in four steps:<br />
Strategic design <strong>and</strong> implementation: alignment;<br />
Financial service design: innovation;<br />
Strategic use of Internet to realize the financial service <strong>and</strong> the business strategy: IT fusion;<br />
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Final assessment <strong>and</strong> evaluation.<br />
Renata Paola Dameri<br />
Figure 2: Strategic alignment perspectives: The IT infrastructure fusion perspective (source:<br />
Henderson <strong>and</strong> Venkatraman, 1993)<br />
3.1 Strategic design <strong>and</strong> implementation: alignment<br />
The strategic aim of Banca Carige was to better enter into the consumer credit market; this is a very<br />
interesting secoter for italian banks, because consumer credit in Italy is less developed than in other<br />
european countries, but the growth rate shows that this type of financial service is gaining more <strong>and</strong><br />
more the favour of customers, especially young men <strong>and</strong> women (Fig. 3).<br />
Ratio between consumer credit <strong>and</strong> GDP<br />
Consumer credit growth rate (2003-<br />
2008)<br />
Figure 3: Consumer credit in Italy <strong>and</strong> in Europe (source: BCE <strong>and</strong> Thomson Financial Datastream)<br />
Banca Carige considered consumer credit an interesting market, but it knew that to successfully enter<br />
this market it was necessary to win the competition with non-bank financial institution, more<br />
aggressive in their policies <strong>and</strong> strategies <strong>and</strong> less bound to complain with banking rules. For this<br />
reason, it was necessary to apply the three behaviuors explained above: alignment, innovation,<br />
evaluation.<br />
Banca Carige defined its own strategic aims, considering:<br />
That consumer credit is less developned in Italy, so that it is possibl,e for a large italian bank to<br />
gain market share, <strong>using</strong> its own well widespread retail network all over the country;<br />
That consumer credit could be used not ony to exp<strong>and</strong> the business, but also to catch new young<br />
customers thanks to innovative products, or to retain old customers gaining their trustu <strong>and</strong> fidelity<br />
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Renata Paola Dameri<br />
through the strategic combination of the strong br<strong>and</strong> of Banca Carige, the large retail network<br />
<strong>and</strong> the use of Internet.<br />
Banca Carige used its Creditis Servizi Finanziari company to support the new business; this company<br />
was considered the right answer to the challenges issued by the more competitive financial market:<br />
Creditis is leaner than a large bank, so it is more able to compete with the new non-bank financial<br />
institution;<br />
People working in Creditis are younger than the average working in Banca Carige; they are better<br />
skilled for the use of Internet in financial products <strong>and</strong> services;<br />
Credits could use the banca Carige br<strong>and</strong> <strong>and</strong> retail network to both create new relationships with<br />
old customers <strong>and</strong> to catch new customers on the market.<br />
At the <strong>and</strong> of this first step, Banca Carige was able to clearly define its<br />
Business scope,<br />
Distinctive competencies <strong>and</strong><br />
Strategic aims (see Business strategy in Fig. 1).<br />
In details:<br />
To launch a new product in consumer credit, a revolving credit card, offered both to old customers<br />
<strong>and</strong> to new customers, especially young people;<br />
To base its strategic initiatives on its distinctive resources: affirmed <strong>and</strong> well known br<strong>and</strong> <strong>and</strong> a<br />
large retail network;<br />
To gain a satisfactory market share in the consumer credit business both catching new customers<br />
<strong>and</strong> retaining old customers.<br />
Linked to the strategic aims, it is possibile to define some indicators to measure the success of this<br />
project, for example:<br />
Number of Valea revolving cards issued;<br />
Number of new customers, respect to old ones, subscribing a revolving card Valea;<br />
Market share respect to competitors;<br />
Cost/revenue ratio of the project (including Internet infrastructure, the web site <strong>and</strong> so on);<br />
Type of channel used to subscribe the revolving card: the traditional retail network or the web site.<br />
Fig. 4 <strong>and</strong> 5 are used to explicitly set out the alignment between business needs <strong>and</strong> strategic goals,<br />
<strong>and</strong> the expected benefits from the new initiative.<br />
BUSINESS NEEDS STRATEGIC GOALS<br />
Banking globalisation <strong>and</strong> higher competitiveness Gain competitive advantage thanks to new, innovative<br />
products, but based on the historical <strong>and</strong> strong br<strong>and</strong><br />
Role of Internet in the financial sector, Internet as a<br />
mature <strong>and</strong> no distinctive technology<br />
Using Internet to supply innovative products<br />
More exigent <strong>and</strong> hard to please customers Retain <strong>and</strong> satisfy customers thanks to easier to use<br />
<strong>and</strong> self tailored services<br />
Lack of confidence Using Internet to grant transparency in financial<br />
contracts <strong>and</strong> on line availability of information about<br />
products, services <strong>and</strong> applied conditions<br />
Price reduction of common products, higher margins<br />
by distinctive services<br />
Figure 4: Explicit alignment bewteen business needs <strong>and</strong> strategic goals<br />
114<br />
To enlarge portfolio products thanks to the Internet,<br />
offering customised services at lower prices, but also<br />
with lower cost for the bank
Renata Paola Dameri<br />
STRATEGIC GOALS EXPECTED BENEFITS<br />
Gain competitive advantage thanks to new,<br />
innovative products, but based on the historical <strong>and</strong><br />
strong br<strong>and</strong><br />
Higher market share respect to competitiors, number<br />
of new customers<br />
Using Internet to supply innovative products Number of new contracts sold, number of web site<br />
visits<br />
Retain <strong>and</strong> satisfy customers thanks to easier to use Number of new contracts with old customers<br />
<strong>and</strong> self tailored services<br />
Using Internet to grant transparency in financial<br />
contracts <strong>and</strong> on line availability of information about<br />
products, services <strong>and</strong> applied conditions<br />
To enlarge portfolio products thanks to the Internet,<br />
offering customised services at lower prices, but also<br />
with lower cost for the bank<br />
Figure 5: Explict set out of expected benefits<br />
3.2 Financial service design: innovation<br />
Customer satisfaction<br />
Cost <strong>and</strong> returns of the project<br />
How to innovate this product, Valea revolving card? Banca Carige choiced a mix of technology <strong>and</strong><br />
customer orientation. Banks are used to await customers into their own branches <strong>and</strong> agencies;<br />
traditionally bank services are “pull-type”: the customers ask to their bank the service they need for (or<br />
an advice to solve their own specific financial need, or which is the more suitable financial product for<br />
them). Creditis defined a new product more customer oriented; a “push-type” one, where the bank<br />
suggests it to the customers without awaiting the request by them.<br />
The marketing mix to promote this product is largely based on the Internet:<br />
A new distribution channel, the Creditis web site, accessible also from the Banca Carige web site:<br />
this enforces the guarantee role of the well known large bank behind the Creditis new company<br />
(less known);<br />
A new type of financial service, customised by the customer himself <strong>using</strong> the potential of the web<br />
site; in this way, Creditis aims to create a value constellation including the customer as active<br />
subject of the value creation process;<br />
A new communication strategy, able to support the br<strong>and</strong> extension <strong>and</strong> awareness of the<br />
affordability of Creditis, based on Banca Carige strong reputation, but also a fresh <strong>and</strong> innovative<br />
look for Creditis.<br />
Using both the web site <strong>and</strong> an Internet advertising campaign, Banca Carige aims at positioning<br />
Creditis <strong>and</strong> its Valea revolving card in a distinctive manner respect to competitors. Indeed, thanks to<br />
a market research on the consumer credit market, Banca Carige argued that its main competitors are:<br />
Traditional banks, <strong>using</strong> their strong br<strong>and</strong> <strong>and</strong> traditional distribution channel to reach their old<br />
customers, but weak in the Internet banking sector respect to the new financial companies;<br />
New financial companies specialised in consumer credit, often Internet pure players, strong on<br />
the electronic market but weak in reputation <strong>and</strong> trust by the customers.<br />
Mixing the strong br<strong>and</strong> of Banca Carige with the new Internet technologies <strong>and</strong> the electronic<br />
channel, supported by an innovative Internet adverstising, Creditis aims to overcome the weaknesses<br />
of its competitors. To implement the strategic aimes into the innovative service, Banca Carige defined<br />
a path to pursue during the implementation of Valea revolving card, <strong>using</strong> this framework also to<br />
share goals, instruments <strong>and</strong> required skills all over the company (Fig. 6). The framework is the basis<br />
to build the mix between the service characteristics, the use of the Internet technology, the<br />
communication strategy <strong>and</strong> the business strategy.<br />
Br<strong>and</strong><br />
Awareness<br />
Br<strong>and</strong><br />
Experience<br />
Prospect<br />
Acquisition<br />
Figure 6: From br<strong>and</strong> awareness to customer loyalty<br />
115<br />
Prospect<br />
to Customer<br />
Conversion<br />
Customer<br />
Loyalty
Renata Paola Dameri<br />
3.3 Strategic use of Internet to realize the financial service <strong>and</strong> the business strategy:<br />
IT fusion<br />
Internet is the technological basis for both the business processes <strong>and</strong> the financial service<br />
incorpored in Valea. IT is in this case rally pervasive of products, processes, strategies. The fusion<br />
between IT <strong>and</strong> business strategy is native <strong>and</strong> not subsequential: this fusion has been conceived till<br />
the beginning of the whole project. As shown in Fig. 6, the company strategies are the starting point to<br />
plan the financial service implementation, defining its life cycle. The web site is the main IT instrument<br />
to support the deliver of the consumer credit through the revolving card Valea.<br />
Fig. 6 introduces five steps in the service implementation; each of them is the concrete realization of<br />
one specific strategic aim through the technology incorporated into the business process.<br />
The first step – Br<strong>and</strong> Awareness exploits the main distinctive <strong>and</strong> strategic resource on with business<br />
project has been conceived: the strongness of the Banca Carige br<strong>and</strong>. For this reason, in this phase<br />
the website serves as a shop window, just to promote the br<strong>and</strong> <strong>and</strong> to publish information about both<br />
the Creditis company <strong>and</strong> its products <strong>and</strong> financial services. The aim is to create the awareness in<br />
customers, regarding the link between the well known holding – Banca Carige, the Creditis company<br />
specialized in consumer credit, <strong>and</strong> the new product – Valea.<br />
During the following steps, the web site is transformed into an e-commerce site, with the possibility for<br />
the customers to subscribe the Valea card <strong>and</strong> therefore the funding contract. The catching of new<br />
customers happens through three phases: Br<strong>and</strong> Experience, Prospect Acquisition <strong>and</strong> Client<br />
Conversion. These three steps aim to get about the new product Valea, well linked with Carige br<strong>and</strong>,<br />
to advertise the Valea both to the old <strong>and</strong> to the new customers in a customised way, <strong>and</strong> finally to<br />
transform the prospect into a customer. What is a prospect? It is a well defined customer type, to<br />
which the advertising Internet campaign is addressed. Banca Carige used a very complex market<br />
research to define the prospect potentially interested in the new product Valea, supplied by the web<br />
channel. Generally, it is a young man or woman (aged 25-44), Internet user, interested in consumer<br />
credit, well defined respect to his/her purchasing style, that is: not very careful in choising the<br />
products or services <strong>and</strong> with a good income. This type is called “financial customer”. Applying this<br />
prospect selection, Banca Carige segmented the potential customers (Fig.7); the set of potential<br />
subscribers of Valea is composed by 357 thous<strong>and</strong>s people (Source: Eurisko).<br />
Aged 22-44 (68%)<br />
Interner user 60%<br />
Purchasing style: Financial Customer (7,74 ml people)<br />
Interested in consumer credit 337.000<br />
Figure 7: The prospect focus target<br />
Depending on the prospect <strong>and</strong> on the goals of these three steps, Banca Carige <strong>and</strong> Creditis defined<br />
the technology scope to be applied to the web site. Well defined objectives have been deployed; they<br />
are:<br />
To sustain the br<strong>and</strong> awareness in people composing the focus target (they are not customers<br />
yet);<br />
To introduce institutional information about the company, enforcing trust in its affordability;<br />
To enter in touch with the higher number of people belonging to the focus target <strong>and</strong> responding<br />
to the prospect profile, <strong>using</strong> the Internet advertising campaign (for example, banners in some<br />
search engines or in well-choiced vertical portals);<br />
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Renata Paola Dameri<br />
To clearly communicate the characteristics <strong>and</strong> adavantages of the new product Valea revolving<br />
card;<br />
To promote the card subcription, converting prospects into customers.<br />
The definition of these measurable goals permits to evaluate the effectiveness of the web site, respect<br />
to the strategic goals.<br />
It would especially important in the last step, when Banca Carige should evaluate the success of this<br />
Internet based business project, to decide if continue it <strong>and</strong> to develop new marketing policies to<br />
enforce the customer’s loyalty.<br />
3.4 Final assessment <strong>and</strong> evaluation<br />
The use of a formal method such as the revisited Henderson <strong>and</strong> Ventrakaman model to support the<br />
strategic alignment between banks strategies <strong>and</strong> the use of Internet permits also to well define<br />
awaited benefits <strong>and</strong> performance indicators, able to assess the effectiveness <strong>and</strong> the success of the<br />
initiative <strong>and</strong> to support decisions for the future of the project.<br />
Banca Carige have been starting the project at the end of 2009, just before the Chistmas period. In<br />
2010 the project has been carrying on, with some interesting results. The evaluation of the whole<br />
initiative is at the moment only partial, but Banca Carige <strong>and</strong> Creditis have all the instruments to<br />
pursue a strategic assessment of their choices.<br />
We can analyse the reached results <strong>and</strong> the performance indicators distinguishing between:<br />
Strategic goals;<br />
Innovation goals;<br />
Economic goals.<br />
The main strategic goals were to catch new customers <strong>and</strong> to introduce consumer credit to old bank<br />
customers. These strategic goals are really easy to measure; the most interesting aspect regards the<br />
segmentation between the two types of customer, old <strong>and</strong> new ones. The statistics demonstrate that<br />
the new customers are more than the old <strong>and</strong> that they really respond to the prospect defined by<br />
Banca Carige. The number of Valesa card issued is judged satisfying in the launch phase of its life<br />
cycle.<br />
The innovation goals especially regard the possibility of <strong>using</strong> Internet to promote <strong>and</strong> further to sell a<br />
new financial product, <strong>and</strong> also the use of Internet <strong>and</strong> web sites to sustain the company br<strong>and</strong> or its<br />
look. To evaluate these apects, specific key performance indicators have benn used, such as<br />
impressions number or direct response. In this case, the indicators show that it is better to create two<br />
web site: the Creditis institutional web sit, with information about the company <strong>and</strong> its products <strong>and</strong><br />
services; <strong>and</strong> the commercial web site Valea, to support the best customisation of the product <strong>and</strong> a<br />
high involvment of each customer in the value chain.<br />
Economic goals are used to underts<strong>and</strong> if revenue deriving from Valea revolving card related to the<br />
cost of the project are positive or negative. The evaluation confirms that Internet is not a good<br />
instrument to increase revenues or to reduce cost; instead it is very powerful if used like a lever to<br />
gain compatitive advantages exploting some distinctive resources such as the br<strong>and</strong>, the retail<br />
network <strong>and</strong> so on. Creditis has been able to calculate the gross margin of its initiative <strong>and</strong> it is<br />
positive. But Banca Carige thinks that the best result has been the number of people entering in touch<br />
with its br<strong>and</strong>, to consolidate its positiningin the Italian bank sector <strong>and</strong> to enforce the trust<br />
traditionally recognise to him by its customers. Banca Carige is a very traditional financial company in<br />
Italy <strong>and</strong> its customers are aged; the use of the Internet is an important media to spread its positive<br />
reputation also between the new generations.<br />
References<br />
Arnold I., van Ewijk S. (2011), “Can pure play internet banking survive the credit crisis?”, Journal of Banking <strong>and</strong><br />
Finance, Vol. 35 Iss 4<br />
Carr N. (2003), IT doesn’t matter, Harvard Business Review, May<br />
Coleman P. <strong>and</strong> Papp R. (2006): “Strategic Alignment: Analysis of Perspectives”, Proceedings of the 2006<br />
Southern Association for <strong>Information</strong> Systems Conference<br />
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Cyree K., Delcoure N., Dickens R. (2009), “An examination of the performance <strong>and</strong> prospects for the future of<br />
internet-primary banks”, Journal of Economics <strong>and</strong> Finance, Vol.33 Iss.2<br />
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technology-enabled bank channels”, The International Journal of Banking Marketing, Vo. 29 Iss. 1<br />
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http://dx.doi.org/10.1787/888938327401<br />
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information technology,” in T. Kochan & M. Unseem, eds, Transforming Organisations, Oxford University<br />
Press, NY, 1992.<br />
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Functionality”, IUP Journal of Bank <strong>Management</strong>, Vol. 10 Iss 1<br />
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Journal of Performance <strong>Management</strong>, Vol. 22 Iss. 3<br />
OECD, <strong>Information</strong> Technology Outlook 2010, Paris<br />
Safeena R., Abdullah, Hema Date, “Customer Perspectives on E-business Value: Case Study on Internet<br />
Banking”, Journal of Internet Banking <strong>and</strong> Commerce, Vol. 15 Iss. 1<br />
Xue M., Hitt L., Chen P. 2011), „ Determinants <strong>and</strong> Outcomes of Internet Banking Adoption“, <strong>Management</strong><br />
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Kybernetes, Vol. 39 Iss. 5<br />
118
ICT <strong>and</strong> PA: A Marriage Made in Heaven?<br />
Maria Concetta De Vivo, Alberto Polzonetti <strong>and</strong> Pietro Tapanelli<br />
University of Camerino, Italy<br />
concetta.devivo@unicam.it<br />
alberto.polzonetti@unicam.it<br />
pietro.tapanelli@unicam.it<br />
Abstract: In the European context, Italian legislation bodies have intervened on several occasions <strong>and</strong> time <strong>and</strong><br />
time again through regulatory interventions aimed at regulating the use of ICT both in the Public Administration<br />
<strong>and</strong> the private sector. The aim of this work is to ascertain why the most advanced regulations <strong>and</strong> most<br />
widespread technologies alone cannot manage to bridge the current <strong>and</strong> verifiable gap between Public<br />
Administration <strong>and</strong> <strong>Information</strong> Communication Technologies. We will firstly address the evolution of the<br />
legislation <strong>and</strong> make particular reference to the Italian situation as well as analyse the European funding<br />
programmes for implementing ICT in the PA <strong>and</strong> we will then study the factors preventing ICT’s real, successful<br />
penetration in the public structure <strong>and</strong> the role of digital culture. For the authors, the lack of an adequate digital<br />
culture for both old <strong>and</strong> new generations of digital citizens is the real reason for the current gap between ICT <strong>and</strong><br />
the PA. Young citizens - Strength: they are included within the definition of digital natives. Using technologies to<br />
communicate-exchange-share comes naturally to them. Weakness: they lack adequate digital education to get<br />
the most out of the tools at their disposal. Result: complete immaturity in the knowledge of their own rights <strong>and</strong><br />
especially their own duties. The old generation of digital citizens - Strength: population of seniors who are<br />
fundamentally curious <strong>and</strong> conscious of ICT news, especially in relation to the PA; confident in a support<br />
essential to simplifying their existence. Weakness: a) distrust often born of false information about new ICT tools<br />
for their benefit; b) incompatibility <strong>and</strong> incommunicability between information systems from various Public<br />
Administrations; c) citizen interoperability procedures/PA sometimes still too conf<strong>using</strong> or unclear <strong>and</strong><br />
characterised by haphazard development, with areas (<strong>and</strong> offices <strong>and</strong>/or local administrations) that are extremely<br />
developed alternated with areas that have remained behind. During this analysis we cannot forget the concept of<br />
broadb<strong>and</strong> internet access as synonymous with fast access to the network. The possibility of use facilitated by a<br />
2.0 internet structure for the citizen. Broadb<strong>and</strong> internet access as a citizen’s right. European <strong>and</strong> national<br />
overview. The difference between the idea of broadb<strong>and</strong> internet access as a citizen’s right in Italy <strong>and</strong> other<br />
European countries will also be explored: in Switzerl<strong>and</strong> (in 2008), in Finl<strong>and</strong> (in 2010, each of the approximately<br />
5 million Finns will have the right to a minimum speed connection of 1Mbps <strong>and</strong> broadb<strong>and</strong>, currently in a<br />
transitional period, that should reach 100 Mbps by 2015); in Spain (in 2011). In Italy: Professor Rodotà recently<br />
spoke of this, in an intentionally defiant tone, so as to unofficially push for a solution to the problem. In fact, our<br />
legal system already guarantees the right to Internet in article 3 of the Italian Constitution. In conclusion, the<br />
characteristics of service providers will be examined as well the reasons for not having an open st<strong>and</strong>ardisation<br />
for internet access as yet another phenomenon to negatively influence the ICT <strong>and</strong> Public Administration<br />
relationship.<br />
Keywords: eGovernment, cloud computing, public administration, open data, open government, interoperability<br />
1. Introduction: How the European Union try to develop ICT<br />
The impact of ICT on various aspects of modern society, including the particularly delicate issue of<br />
data h<strong>and</strong>ling, is undergoing a period of considerable fermentation. One need only consider the now<br />
well-established, although ongoing, internet revolution which has made the wide-scale distribution of<br />
numerous services for both consumers <strong>and</strong> businesses possible; in particular, it is important to<br />
highlight how local government services play an increasingly key part in establishing the role of<br />
citizens in the new information society.<br />
In March 2000 the European Council outlined a “strategic plan for the new decade: the creation of the<br />
information society”, demonstrating the EU’s decisive recognition of the main goals for creating a socalled<br />
economy of knowledge, in order to become a leading power in the age of globalisation in which<br />
knowledge has become an indisputably important economic resource. In fact, as has been frequently<br />
stated, sustainable development depends on knowledge infrastructures which, in the digital age, have<br />
become the real essential requirements for the recovery of the European economy.<br />
The value of information is only rarely limited to the subject by which it is produced, making it<br />
essential to reflect on the rules governing the production of information <strong>and</strong> its subsequent h<strong>and</strong>ling,<br />
in order to make its data contents more reliable <strong>and</strong> easier to use. In particular, ICT is ca<strong>using</strong> an ever<br />
greater gap between the production phase or the original source of information <strong>and</strong> the end user or<br />
access phase: this has resulted in an exceptional expansion of the range of tools available to those<br />
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responsible for making choices or taking decisions, but also in a loss of control over the quality of the<br />
information used (Rifkin 2001).<br />
Today the entire administrative apparatus in each EU member state can count on several financing<br />
sources specifically aimed at helping to achieve the goals promoted <strong>and</strong> sponsored by the European<br />
Commission: for example, the “i2010 European initiative on e-inclusion” <strong>and</strong> the subsequent “Digital<br />
Agenda”.<br />
From the point of view of European legislators, the TLS package aiming to make the electronic<br />
communications sector more efficient (<strong>and</strong> competitive) has become fundamental. It is composed of<br />
the framework Directive 2002/21/EC <strong>and</strong> four specific directives (the “Authorisation Directive”<br />
2002/20/EC, the “Access Directive” 2002/19/EC, the “Universal Service Directive” 2002/22/EC <strong>and</strong><br />
the “Privacy <strong>and</strong> Electronic Communications Directive” 2002/58/EC), in addition to subsequent<br />
integrations <strong>and</strong> modifications. Furthermore, although currently under revision by public consultation,<br />
the 1999/93/EC Directive (“Community framework for digital signatures”) is particularly important in<br />
order to establish the legal requirements for the identification of citizens, in this case, accessing<br />
government services. Directives 95/46/EC <strong>and</strong> 2002/58/EC along with EC regulation 45/2001 are also<br />
fundamental regarding data protection. In this context, Directive 2003/98/EC on the re-use of<br />
information in the public sector (so-called data recycling), also becomes essential.<br />
Final reference, although in reality this should be the starting point, must be made to EU treaties. In<br />
particular, articles 15 <strong>and</strong> 16 of the TFEU (Treaty on the Functioning of the European Union) <strong>and</strong><br />
articles 8 <strong>and</strong> 41 of the Charter of Fundamental Rights of the European Union also play a key role in<br />
establishing the core principles of what has now become a Europe-wide legal framework.<br />
2. Scenario: Italian body of laws related to eGovernment<br />
Italian law has several different references to ICT issues, especially in the context of government<br />
services. The regulations are particularly well structured. The danger of fragmentation <strong>and</strong> division by<br />
sector has been overcome by the practice, implemented by Italian legislators, of creating sectorspecific<br />
Regulations or regulatory bodies capable of gathering the legislation regarding the various<br />
categories in an organised manner.<br />
The most well-known texts are the Digital Administration Law (Italian CAD, Codice<br />
dell’Amministrazione Digitale), the Data Protection Law (Codice della Privacy) <strong>and</strong> the Consumer<br />
Protection Law (Codice del Consumo), all of which were created in compliance with EU requirements.<br />
The CAD (Legislative Decree 82/2005) is considered as the cornerstone of the “Modernisation <strong>and</strong><br />
Digitalisation of Government Services Plan”. The decree’s main aims are: the reorganisation of<br />
government services through the creation of a single office responsible for ICT activities; the<br />
simplification of relations with citizens <strong>and</strong> enterprises through the introduction of online payment<br />
services, the exchange of data between enterprises <strong>and</strong> administration authorities, the promotion <strong>and</strong><br />
use of certified electronic post, access to online services, the use of digital signatures, the<br />
dematerialisation of documents <strong>and</strong> the development of institutional websites; to ensure the security<br />
of data exchanges; to reduce the time necessary for administrative procedures; to reduce the cost of<br />
legal procedures; to reduce the use of paper (Carloni 2009).<br />
The Consumer Protection Law (Legislative Decree 206/2005) is intended to provide consumer<br />
protection even when consumers make use of digital technology <strong>and</strong> environments.<br />
The Data Protection Law (Legislative Decree 196/2003) has several references both to data h<strong>and</strong>ling<br />
<strong>and</strong> computer security.<br />
The areas of intervention by Italian legislators can be divided into groups by sectors:<br />
The Data Protection sector, with reference to the abovementioned Legislative Decree 196/2003;<br />
The infrastructures sector: the unified public authorities network (RUPA) <strong>and</strong> the public<br />
connection system (Sistema Pubblico di Connettività);<br />
The accessibility <strong>and</strong> website sector. In this sector, recent regulations include several specific<br />
decision of administrative authority such as CNIPA (Italian Authority for Informatics in Public<br />
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Administration, now it’s called DigitPA); but the most important is even more the CAD, <strong>and</strong> its<br />
implementation action; <strong>and</strong> the Law no.4/2004 (known as the Stanca Law);<br />
The sectors of electronic documents, signatures, certificates, Electronic Identity Cards (EIC) <strong>and</strong><br />
the National Services Card (Carta nazionale dei servizi). These sectors have a particularly large<br />
number of regulations, including the following selection of some of the most important.<br />
The computer security sector: the CAD <strong>and</strong> the Data Protection Law (Legislative Decree<br />
196/2003).<br />
The open source sector: the main reference for this subject is the CAD; Ministry of Innovation <strong>and</strong><br />
Technology Decree dated 19 December 2003 on “Development <strong>and</strong> use of computer programs<br />
by public administrations”; Ministry for Innovation <strong>and</strong> Technology Decree dated 31 October 2002<br />
on the “Creation of a Commission for open source software in Public Administration”.<br />
In order to fully implement both national <strong>and</strong> European regulations, the EU itself provides financing in<br />
the framework of the FP7, specific Cooperation program, ICT theme <strong>and</strong> the CIP, specific program IT<br />
PSP (Alberti, 2005).<br />
3. The lack of widespread digital culture<br />
From the above, it would appear that the use of ICT is making excellent progress – however, the<br />
reality is rather different. In fact, although the ideas <strong>and</strong> projects financed by the EU itself are both<br />
numerous <strong>and</strong> interesting, it is also true that the definitive push to switch off the old way of accessing<br />
government services is lacking.<br />
Despite an almost complete panorama on a regulatory level, public authorities continue to show little<br />
awareness of the full benefits of <strong>using</strong> ICT. A fundamental role in examining the situation is played by<br />
the Digital Agenda, which provides an absolutely exhaustive analysis of the factors impeding the full<br />
development of a digital culture (Florini 2007).<br />
The areas identified as hostile to e-inclusion are seriously undermining the efforts made to implement<br />
ICT <strong>and</strong> demonstrate the need for a coordinated response on a European level.<br />
In particular, the following issues are analysed:<br />
Fragmentation of digital markets<br />
The study emphasises the excessive fragmentation of national online markets, which prevent citizens<br />
from benefitting from the advantages of a single digital market. In particular, an alignment of national<br />
regulations <strong>and</strong> the implementation of electronic payment <strong>and</strong> invoicing systems, in addition to<br />
dispute resolution systems, could play a key part in developing consumer confidence.<br />
Lack of interoperability<br />
Due attention has yet to be paid to the concept of interoperability.<br />
Increase in computer crime, leading to the risk of falling confidence in networks<br />
Constant attempts at online fraud, especially phishing, threaten consumer confidence in accessing<br />
any service, either public or private, on the web.<br />
Lack of investment in networks<br />
More needs to be done to ensure the installation <strong>and</strong> adoption of broadb<strong>and</strong> available to all, at ever<br />
higher speeds, through both fixed <strong>and</strong> wireless technology. The importance of electronic<br />
communication methods can be compared to the revolutionary impact of the development of<br />
electricity <strong>and</strong> transport networks in the last century.<br />
Insufficient committment to research <strong>and</strong> innovation<br />
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Investment in Europe continues to be insufficient, committment is fragmented, the creativity of SMEs<br />
is underexploited <strong>and</strong> the intellectual advantage of research is not converted into competitive<br />
advantage for the innovations based on the market. More use must be made of research talent.<br />
Lack of digital literacy <strong>and</strong> computer skills<br />
The underlying reason behind the lack of digital culture <strong>and</strong> the slow development of networks.<br />
Although huge progress has been made in the development of ICT, it is not actually accessible,<br />
especially for those who have not yet acquired a certain level of skills relating to the access device.<br />
The complexity of certain procedures can sometimes prevent their practical use.<br />
Missed opportunities in responding to social problems<br />
By fully exploiting the potential of ICT, Europe could resolve some of the most urgent issues facing<br />
the community in a far more efficient manner.<br />
The seven themes mentioned above are, therefore, also relevant to the badly coordinated<br />
development of eGovernment, which suffers in particular from the lack of an adequate network<br />
infrastructure (as the primary problem) <strong>and</strong> the absence of a digital culture, which is often ab<strong>and</strong>oned<br />
to itself without any form of organised <strong>and</strong> structured development.<br />
In fact, access to the internet in Europe is based on first generation structures (copper wiring <strong>and</strong><br />
cable networks), with a growing dem<strong>and</strong> for new generation networks. Unfortunately, however, the<br />
continent is forced simply to follow in the tracks of other countries, in particular Southeast Asian<br />
countries such as Japan <strong>and</strong> Korea which are world leaders in developing fibre optic internet access.<br />
Furthermore, European structures, in Italy for example, are often inefficient <strong>and</strong> with scarce<br />
penetration in the territory: the statistics illustrated in the following chapter demonstrate the clear gap<br />
between northern <strong>and</strong> southern European countries. Let us hope that the Europa 2020 strategy,<br />
which emphasises the importance of the spread of broadb<strong>and</strong> to promote social inclusion <strong>and</strong><br />
competitiveness in the EU, repeating the aim of bringing broadb<strong>and</strong> access to all European citizens<br />
by 2013, does not remain a chimera. This is especially true regarding the aim for all European citizens<br />
to have access to much faster connections of over 30 Mbps, <strong>and</strong> that at least 50% of European<br />
families to have internet connections of over 100 Mbps by 2020.<br />
The additional aspect mentioned above of the absence of a genuine digital culture is closely linked to<br />
the theme of computer literacy. Given that social, economic <strong>and</strong> political activities are ever more<br />
frequently performed online, the use of internet has become an integral part of the daily life of many<br />
Europeans, even though nearly 30% of European citizens have never used the internet. This share of<br />
computer illiterates is composed of people between the age of 65 <strong>and</strong> 74, low income families <strong>and</strong> the<br />
unemployed or people with a low level of education. Although over-simplified, this profile gives a clear<br />
indication of the emarginated social classes of the new millennium (Armbrust 2010).<br />
The importance of a digital culture is also evident in the 2005 UNESCO convention on cultural<br />
diversity, which intends to protect <strong>and</strong> promote global cultural <strong>and</strong> digital diversity, including the<br />
widespread distribution of contents through a previously unimagined range of communication<br />
methods.<br />
4. Broadb<strong>and</strong> accesses: The European Union is going well?<br />
The European Commission has recently drafted the ninth comparative analysis report on the progress<br />
achieved in eGovernment in the EU as a whole. The main conclusions drawn are positive:<br />
More than 80% of fundamental public services are available online. The online availability of 20<br />
fundamental services, such as vehicle registration, tax returns or the registration of a new<br />
company, has reached 82% in Europe as a whole, considerably higher than the 69% recorded in<br />
2009. The best results were achieved in Austria, Irel<strong>and</strong>, Italy, Malta, Portugal <strong>and</strong> Sweden,<br />
where all of these services were entirely available online. The largest improvements over the last<br />
year were made in Bulgaria, Italy <strong>and</strong> Latvia;<br />
The report shows that in Austria, Denmark, Estonia, Irel<strong>and</strong>, Sweden <strong>and</strong> the UK, 55% of the<br />
services necessary to open a company are provided automatically or through a specific portal.<br />
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Nonetheless, only 46% of the services necessary for the unemployed are currently provided<br />
through a specific portal;<br />
For electronic tenders, 70% of public authorities have begun working with this solution, but the<br />
low overall percentage of use (around 5% of all tenders) has not yet allowed for the achievement<br />
of any particular benefits;<br />
Small local authorities are becoming the weak links in eGovernment, providing only half the online<br />
services offered by larger authorities.<br />
Although considerable progress has been made by public authorities, including in Italy, low levels of<br />
access by citizens <strong>and</strong> enterprises continues to be a source of concern, even for the European<br />
Commission itself. The statistics in this area show a rather varied <strong>and</strong> not particularly positive<br />
situation, with excessive disparity between EU states.<br />
For example, the figures relating to families with internet access show the most positive results in<br />
northern Europe (Norway, Sweden, the Netherl<strong>and</strong>s, Denmark <strong>and</strong> Icel<strong>and</strong>) at around 90%, while<br />
Italy, as often occurs, is one of the states with most difficulty. Although 59% of families have access to<br />
the internet, for broadb<strong>and</strong> the percentage falls to only 49%: not even half of Italian families have<br />
broadb<strong>and</strong> access. The figures are better for enterprises, with most EU states over the threshold of<br />
80% (2009 broadb<strong>and</strong> access figures). The figure relating to broadb<strong>and</strong> penetration puts Italy among<br />
the top states in the EU, even in relation to population; however, active broadb<strong>and</strong> lines (almost<br />
12,500,000) are mostly operative in large urbanised areas, with a worrying level of ab<strong>and</strong>on in rural<br />
areas <strong>and</strong> even the suburban surroundings of large metropolitan areas.<br />
Moving on to analyse the figures relating to interaction between citizens <strong>and</strong> public authorities, there<br />
is a sharp fall in the optimism of the European Commission’s report on eGovernment. The average<br />
percentage of EU citizens in 2010 who use the internet to interact with public authorities is of 28.1%,<br />
with the usual peaks in Denmark (68.2%), Sweden (56.9%), Finl<strong>and</strong> (48.6%) <strong>and</strong> Norway (61.8%),<br />
even though it is outside the EU. While 2010 data is not available for Icel<strong>and</strong>, the percentage in 2009<br />
was of 63.3%. Italy remains blocked at 15.9%, while France <strong>and</strong> Germany are both over 30%. The<br />
figures fall again when the interaction with public authorities becomes more “official”, referring to<br />
document downloads <strong>and</strong> uploads. The EU average falls to 17.9% <strong>and</strong> 13.4% respectively, with Italy<br />
recording exceptionally low results of 11.3% <strong>and</strong> even 5.5% for uploading, well below France,<br />
Germany <strong>and</strong> Spain, for example.<br />
Weekly internet access per capita results are no better, with Italy coming in at 48%, still dangerously<br />
far off the EU average of 65% <strong>and</strong> the results achieved by European competitors. The same trend<br />
can be seen in mobile access rates.<br />
The recent (2010) international ranking drafted by the Economist Intelligence Unit (which has<br />
changed name from “e-readiness rankings” to “digital economy rankings”), providing a snapshot of the<br />
state of technology regarding connectivity, e-readiness <strong>and</strong> broadb<strong>and</strong> quality in 70 countries<br />
worldwide, saw Italy fall from 26th to 27th place (the last country in Western Europe), with a score of<br />
6.92 against 7.09 in the previous edition due to the delay in developing the new generation network.<br />
North European countries <strong>and</strong> the US remained stable in top positions in the ranking, which is now<br />
orientated mainly towards evaluating the quality of broadb<strong>and</strong> <strong>and</strong> mobile networks; in this sense,<br />
countries such as Taiwan, Japan <strong>and</strong> South Korea have risen in the highly important ranking thanks<br />
to heavy investment in fibre optics.<br />
With specific reference to broadb<strong>and</strong> access, the so-called TLC package offers some fundamentally<br />
important considerations for underst<strong>and</strong>ing <strong>and</strong> evaluating priorities when facing the challenge of the<br />
new information society. Point 8 of the Introduction to Directive 2002/22/EC, relating to universal<br />
service, specifies that “connections to the public telephone network at a fixed location should be<br />
capable of supporting speech <strong>and</strong> data communications at rates sufficient for access to online<br />
services such as those provided via the public internet. The speed of internet access experienced by<br />
a given user may depend on a number of factors including the provider(s) of internet connectivity as<br />
well as the given application for which a connection is being used. The data rate that can be<br />
supported by a single narrowb<strong>and</strong> connection to the public telephone network depends on the<br />
capabilities of the subscriber’s terminal equipment as well as the connection”, immediately followed by<br />
“for this reason it is not appropriate to m<strong>and</strong>ate a specific data or bit rate at Community level”. It is<br />
therefore clear that m<strong>and</strong>atory access to a functional <strong>and</strong> functioning connection is surrounded by a<br />
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rather vague aura, given that the same point continues by stating that “in specific cases where the<br />
connection to the public telephony network at a fixed location is clearly insufficient to support<br />
satisfactory internet access, Member States should be able to require the connection to be brought up<br />
to the level enjoyed by the majority of subscribers so that it supports data rates sufficient for access to<br />
the internet”. In fact, in addition to the frequently repeated use of the conditional in the point, the<br />
phrasing “sufficient” for access to the internet is open to a range of anything but clear interpretations.<br />
Even though broadb<strong>and</strong> is not mentioned, the point refers to sufficient access which, given the current<br />
state of affairs, cannot be any less than connections meeting certain quality levels (which are no<br />
longer in line with the speed of data transfer in 2002).<br />
The recent communication from the European Commission to the European Parliament, Council,<br />
Economic <strong>and</strong> Social Committee <strong>and</strong> Committee of the Regions regarding the second periodic review<br />
of the contents of universal service in e-communications networks <strong>and</strong> services in compliance with<br />
article 15 of Directive 2002/22/EC, examines the concept of the obligation of universal service (USO)<br />
in the electronic communications sector, in addition to the scope of universal service itself.<br />
Point 2.1, “Introduction”, specifically states that “universal service in electronic communications (ecommunications),<br />
as currently defined, means ensuring that all who so request are provided with<br />
those services essential for participation in society <strong>and</strong> already available to the great majority of<br />
citizens, either by the market or in the case of market failure by public intervention”. In their analysis of<br />
the status quo of broadb<strong>and</strong>, the Commission itself concludes that “coverage of broadb<strong>and</strong> networks<br />
is now very high in most Member States, being available, on average, to 90% of the EU population.<br />
Use of the internet is now approaching the level of a service used by the majority, with 49% of EU<br />
households <strong>using</strong> the internet, 36% of which are on broadb<strong>and</strong>. Although broadb<strong>and</strong> is not yet used<br />
by the majority of consumers (the first of two considerations identified in Annex 5 of the Directive) <strong>and</strong><br />
is therefore not encompassed by the USO as laid down <strong>and</strong> described by the present wording, takeup<br />
is approaching the threshold of use by a majority of consumers. Furthermore, it is reasonable to<br />
anticipate that, in a relatively short horizon of time, narrowb<strong>and</strong> will no longer answer the requirement<br />
of being “sufficient to permit functional internet access”. Thus the situation does need to be kept under<br />
review”. If the situation already needed to be monitored at the end of 2008, doubts are almost<br />
inevitably raised about the functionality of narrow b<strong>and</strong> connections today.<br />
Access to the internet is in any case held to be of vital importance. For example, we refer to Directive<br />
2009/140/EC, in modification of Directives 2002/21/EC, 2002/19/EC <strong>and</strong> 2002/20/EC, which at<br />
introductory point no.4 confirms the essential nature of internet “for education <strong>and</strong> for the practical<br />
exercise of freedom of expression <strong>and</strong> access to information”, to the point that “any restriction<br />
imposed on the exercise of these fundamental rights should be in accordance with the European<br />
Convention for the Protection of Human Rights <strong>and</strong> Fundamental Freedoms”. Incidentally, the failure<br />
of the free market to operate efficiently is revealed in the fact that the investment to guarantee a<br />
public service is no longer profitable. Hence point no.9 of the 2009 Directive, regarding the principle of<br />
non-discrimination, recognises that “despite the general increase in broadb<strong>and</strong> connectivity, access in<br />
various regions is limited on account of high costs resulting from low population densities <strong>and</strong><br />
remoteness. In order to ensure investment in new technologies in underdeveloped regions, electronic<br />
communications regulation should be consistent with other policies, such as State aid policy,<br />
cohesion policy or the aims of wider industrial policy”.<br />
5. Conclusion<br />
Independently from the quality of broadb<strong>and</strong>, which is not considered here, the essential problems are<br />
revealed in particular when considering three factors. Firstly: the scarce penetration of broadb<strong>and</strong><br />
within the territory, especially rural areas, materially preventing users from accessing online services<br />
provided by public authorities, even where a wide range of services are available. It is no longer<br />
conceivable today to talk about narrow b<strong>and</strong> internet access, relying on the traditional fixed telephone<br />
line. Secondly: the absence of a digital culture. The majority of citizens, whether from the older or<br />
younger generation, do not underst<strong>and</strong> the importance <strong>and</strong> potential offered by the window on the<br />
world provided by internet. The fault lies not so much in a lack of interest from citizens, but rather a<br />
scarce level of sensitisation by the political class which should use specific initiatives to promote <strong>and</strong><br />
facilitate digital access to social life. We will not attempt to make a distinct classification between<br />
those who are or are not open to the digital approach, such as a division between older <strong>and</strong> younger<br />
generations, because the difficulty in access is rooted in certain procedures, regardless of the final<br />
user. This is because, very often, traditional procedures are simply replicated on a computer level<br />
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<strong>using</strong> advanced ICT innovations. Hence, real innovation is lacking in the “how” rather than the “what”,<br />
in order to shift the focus onto the procedure rather than the product. This aspect leads onto the third<br />
<strong>and</strong> last negative point which is preventing real growth in eGovernment: interoperability. The lack of<br />
coordinated development of st<strong>and</strong>ards (better if open source to avoid dangerous lock-in phenomena),<br />
effectively limits the scope of innovation, without any actual growth in the surrounding social situation.<br />
Internet has in any case become the main source of digital access – without access, neither the<br />
growth of a digital culture nor a real development of interoperability can take place.<br />
These three aspects show that it’s necessary consider some solutions especially to improve the<br />
broadb<strong>and</strong> penetration with the rural areas. Without an access that is able to use PA services, we<br />
can’t approach the second aspect, about digital culture lack. Each single PA, in particularly we can<br />
talk about municipally that, waiting optical fibre, WiMAX <strong>and</strong> other similar technology, can support<br />
actions oriented to develop, as much as possible, the liberalization of last mile. In this way, also little<br />
internet providers can make business with buying broadb<strong>and</strong>, from national telecommunication<br />
operator (for example Telecom), <strong>and</strong> selling it to consumers. The HIPERLAN (HIgh PErformance<br />
Radio LAN), <strong>and</strong> its development, could be a solution to bring broadb<strong>and</strong> access to rural areas<br />
(Kroes, 2011). When we can materially connect to the web, we must consider the second aspect. The<br />
lack of digital culture can be solved <strong>using</strong> national <strong>and</strong> European financial channel, we talked about<br />
7th framework programme or CIP framework programme for European reality but there many other<br />
solutions, to improve a massive awareness campaign over the real benefit of an advantaged digital<br />
culture. The interoperability, third aspect, instead, can be solved only when the other two aspects are<br />
clear <strong>and</strong> developed. There is already a normative framework, both European <strong>and</strong> national, that is<br />
able to support the raise of st<strong>and</strong>ards of reference interoperability (Pardo 2009).<br />
In conclusion, it is important to note how some EU member states have begun to define access to<br />
broadb<strong>and</strong> as a right. Finl<strong>and</strong>, France, Greece <strong>and</strong> Spain, also thanks to encouragement from the<br />
UN, have already recognised the right to access as a fundamental right; in particular, in Finl<strong>and</strong> it is<br />
obligatory for providers to supply all citizens with a 1Mbps connection which must be increased to<br />
100Mbps by 2014. In France, too, the Constitutional Court has recognised this fundamental right<br />
based on indications in the United Nations Declaration of Human Rights. In Italy, on the other h<strong>and</strong>,<br />
Prof. Stefano Rodotà, a well-known civil law expert <strong>and</strong> ex-president of the Italian Privacy Authority,<br />
has proposed the integration of the Italian Constitution with an article 21-bis, indispensible for<br />
guaranteeing the right to internet access for all citizens.<br />
References<br />
Alberti, C. (2005) E-society e riutilizzo dell'informazione nel settore pubblico. Disciplina comunitaria e riflessi<br />
nazionali, Rivista italiana diritto pubblico comunitario, Vol. 5, pp. 1237-1245.<br />
Armbrust, M., Fox, A., Griffith, R., D. Joseph, A., Katz, R., Konwinski, A., Lee, G., Patterson, D., Rabkin, A.,<br />
Stoica, I., Zaharia, M. (2010), Clearing the clouds away from the true potential <strong>and</strong> obstacles posed by this<br />
computing capability, http://cacm.acm.org/magazines/2010/4/81493-a-view-of-cloud-computing/fulltext.<br />
Carloni, E. (2009) La qualità delle informazioni pubbliche. L’esperienza italiana nella prospettiva comparata,<br />
Rivista trimestrale diritto pubblico, Vol. 1, pp. 155-168.<br />
Digital economy rankings 2010, Beyond e-readiness, 2010,<br />
http://www.eiu.com/site_info.asp?info_name=digitaleconomy_2010&rf=0<br />
Florini, A. (2007) The right to know: Transparency for an open world. Columbia University Press, New York.<br />
Kroes, N. (2011) Towards a European Cloud Computing Strategy, Speech of Vice-President of the European<br />
Commission responsible for the Digital Agenda, World Economic Forum, Davos, 27 January 2011,<br />
http://ec.europa.eu/information_society/newsroom/cf/itemdetail.cfm?item_id=6649&utm_campaign=isp&utm<br />
_medium=rss&utm_source=newsroom&utm_content=tpa-7.<br />
Pardo, A. T., et al. (2009) From ‘‘Need to Know’’ to ‘‘Need to Share’’: Tangled Problems, <strong>Information</strong> Boundaries,<br />
<strong>and</strong> the Building of Public Sector <strong>Knowledge</strong> Networks, Public Administration Review, V. 69, I. 3, pp. 392 -<br />
402.<br />
Rifkin, J. (2001) L’Era Dell’Accesso. La rivoluzione della new economy, Milano.<br />
The “Ministerial Declaration on eGovernment” approved in Malmö, Sweden, on 18 November 2009, Uunder the<br />
Swedish Presidency, by the Ministers responsible for eGovernment policy of the European Union (EU)<br />
Member States, the C<strong>and</strong>idate Countries <strong>and</strong> the European Free Trade Area (EFTA) Countries.<br />
http://www.epractice.eu/files/Malmo%20Ministerial%20Declaration%202009.pdf.<br />
The European Commission “A Digital Agenda for Europe” COM(2010) 245 final/2. http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0245:FIN:EN:PDF.<br />
The European eGovernment Action Plan 2011-2015. Harnessing ICT to promote smart, sustainable & innovative<br />
Government. COM(2010) 743.<br />
http://ec.europa.eu/information_society/activities/egovernment/action_plan_2011_2015/docs/action_plan_e<br />
n_act_part1_v2.pdf.<br />
125
SMEs <strong>and</strong> IT: A Market for Lemons?<br />
Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
Ghent University, Belgium<br />
jan.devos@howest.be,<br />
hendrik.vanl<strong>and</strong>eghem@UGent.be<br />
dirk.deschoolmeester@vlerick.be<br />
Abstract: It is well known that Small- <strong>and</strong> Medium-sized Enterprises (SME) suffer from a lack of IT proficiency<br />
<strong>and</strong> therefore depend heavily on external IT expertise. The acquisition of a strategic IT artefact by an SME is<br />
mainly initiated in a market where Independent Software Vendors (ISV) <strong>and</strong> customers meet. This complex<br />
process is dominated by information asymmetry <strong>and</strong> leads to the ‘lemons’ problem, where low-quality vendors<br />
drive out high-quality vendors as predicted by the Lemon Market Theory (LMT). The diversity in quality makes it<br />
difficult for prospective buyers to evaluate a product or service with complete certainty <strong>and</strong> makes the decision to<br />
acquire risky. According to LMT, there is incentive for vendors selling poor quality, where quality of services is<br />
linked to an entire group rather than to an individual vendor. Although many scholars refer to this phenomenon in<br />
their work, empirical evidence is scarce. In this paper, we present the results of an enquiry into the ‘lemon’<br />
problem within a group of 484 Belgium ISVs that target the SME market. A survey of the websites of the selected<br />
ISVs was conducted, in which we examined the way the products <strong>and</strong> services were presented. This was<br />
followed by six case studies, in which Chief <strong>Information</strong> Officers (CIOs) of SMEs were interviewed about the way<br />
they perceive the services of the ISVs. Our findings suggest that there are elements of a ‘lemons’ market present.<br />
However, there are also indications of a self-cleaning mechanism present in the market within the group of ISVs,<br />
leading to a globally higher degree of quality <strong>and</strong> leading to positive filtering from ‘the buy side’. However, the<br />
strongest conclusion is that some SMEs are encouraged by ISVs to withdraw from progressing further with their<br />
software acquisition process due their inferior IT capabilities <strong>and</strong> practices.<br />
Keywords: SMEs, IT/IS, lemon market theory, ISV<br />
1. Introduction<br />
Small- <strong>and</strong> Medium-sized Enterprises (SMEs) tend to focus on their core business <strong>and</strong> do not always<br />
have the necessary resources <strong>and</strong> capabilities to govern an internal, professional information<br />
technology (IT) department or an information systems’ (IS) function. It is said that SMEs suffer from<br />
resource poverty, not only financially but also in the amount of their internal IT/IS expertise (Thong<br />
2001; Thong, Yap & Raman 1996; Verhees & Meulenberg 2004). Therefore, SMEs depend heavily on<br />
external IT/IS expertise delivered by Independent Software Vendors (ISVs) to develop <strong>and</strong> implement<br />
their strategic IT artefact <strong>and</strong> conduct the indispensable IT projects (Dibbern & Heinzl 2009; Thong,<br />
Yap & Raman 1996; Yap, Soh & Raman 1992). Large Enterprise Resource Planning (ERP)<br />
developers have already been shifting their attention toward SMEs by offering simplified <strong>and</strong> cheaper<br />
solutions, such as SAP Business One <strong>and</strong> Microsoft Dynamics (Microsoft 2011; SAP 2011). The SME<br />
market is very attractive for small ISVs as well as for the business partners of the formerly mentioned<br />
ERP <strong>and</strong> Customer Relation <strong>Management</strong> (CRM) developers. This is due to the large number of the<br />
SMEs all over the world <strong>and</strong> especially in Europe (Commission 2010). However, the implementation<br />
of strategic information systems like ERP <strong>and</strong> CRM is a complicated task, particularly in SMEs, where<br />
the evaluation of the potential benefits are more uncertain (Levy & Powell 1999). The capabilitymaturity<br />
level of the ISV’s organisation is often inadequate to match with the dem<strong>and</strong>s <strong>and</strong> complex<br />
challenges of an IS implementation in an SME environment. Since SMEs are not well informed on the<br />
correct IT/IS capabilities of the ISVs <strong>and</strong> on the broad functionalities of the ERP <strong>and</strong> CRM software<br />
packages in concert with the efforts needed to adapt the software to their specific requirements, a<br />
situation of severe information asymmetry occurs, making room for opportunistic market behaviour<br />
<strong>and</strong> moral hazard. SMEs do not have sufficient internal managerial capabilities <strong>and</strong> practices to<br />
recognize the true intentions of ISVs in the market. This is an ideal environment for a ‘lemon’ market,<br />
since there is incentive for adverse selection on behalf of the SME, <strong>and</strong> a potential for opportunistic or<br />
even unethical behaviour on behalf of the ISV. The ‘lemon’ problem was initially posed by Nobel Prize<br />
winner in economics, Akerlof, in his seminal article of 1970 <strong>and</strong> showed how a market with<br />
unbalanced information or information asymmetry, can eventually complete disappear or offers<br />
products with poor quality where bad products (lemons) wipe out the good ones (Akerlof 1970).<br />
It would be ideal to clearly define a SME before going into research where the unit of analysis is the<br />
SME. Unfortunately, this is not easy, since there are many characteristics that can identify a SME. A<br />
widely accepted working definition of a SME emanates from the 1971 Bolton Committee Report <strong>and</strong><br />
has both qualitative <strong>and</strong> quantitative elements (Bolton 1971). The qualitative elements (e.g., the<br />
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Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
number of employees <strong>and</strong> the turnover) differ amongst countries. The European Commission took the<br />
initiative to define a SME in terms of microeconomic characteristics, such as turnover (not exceeding<br />
€50 million), annual balance sheet total (not exceeding €43 million) <strong>and</strong> headcount (fewer than 250<br />
persons) (Commission 2003). We used the European definition of a SME in this work.<br />
In this paper, we present the results of an enquiry to the ‘lemon’ problem within a group of 484<br />
Belgium ISVs that target the SME-market. We conducted an examination of the websites of the<br />
selected ISVs, looking at how ISVs present their products <strong>and</strong> services. This was followed by six case<br />
studies where CIOs of SMEs were interviewed about the way they perceive the services of the ISVs<br />
in an outsourced IS project environment.<br />
In the next section we present a literature overview, relating to the theory of the market for Lemons<br />
(LMT). In Section 3, we outline the research methodology used to collect data <strong>and</strong> to illustrate the<br />
proposed framework. We present our results in Section 4, followed by a discussion of the findings. In<br />
Section 5, we present the conclusions <strong>and</strong> a summary of the main points raised by this research.<br />
2. Literature overview<br />
The market for lemons (LMT) is a widespread economic theory developed by Akerlof in his seminal<br />
paper of 1970 (Akerlof 1970). According to this theory, there can be incentive for sellers to market<br />
poor quality, resulting in a reduction of the average quality <strong>and</strong> leading to a death spiral <strong>and</strong><br />
eventually, to complete deterioration of the market. The phenomenon of a lemon market arises in<br />
markets where there is information asymmetry between buyer <strong>and</strong> seller <strong>and</strong> where the overall quality<br />
of the goods <strong>and</strong> services offered is reflected on the entire group of sellers rather than on individual<br />
sellers. Lack of differentiation between the sellers can force high-quality sellers to flee the market<br />
because their quality <strong>and</strong> reputation cannot be rewarded. Akerlof demonstrated his theory with<br />
examples from the used car market. Most of the empirical data for bringing evidence to the theory has<br />
come from the used car market (Bond 1982). The theory has certainly gained attention in the str<strong>and</strong><br />
of research on e-commerce, with research topics such as e-markets <strong>and</strong> auctions (Dewan & Hsu<br />
2004; Lee et al. 2010; Pavlou & Gefen 2004).<br />
Devos et al. developed a nomological network for the LMT, which reveals the constructs <strong>and</strong> the<br />
measures used to validate the theory (Devos, Van L<strong>and</strong>eghem & Deschoolmeester 2010). They<br />
consider two groups of transacting parties: buyers (SMEs) <strong>and</strong> sellers (ISVs). The buyer is the less<br />
informed party <strong>and</strong> the seller is the more informed party. The buyer interacts with the seller <strong>and</strong> a<br />
contract of the transaction is negotiated. Christozov et al. see information asymmetry as a natural<br />
property of any communication process between a sender <strong>and</strong> a receiver, when both actors have<br />
different backgrounds <strong>and</strong> expertise, use different “jargon” or possess different information regarding<br />
the content of the communication session (Christozov, Chukova & Mateev 2009). Due to this<br />
information asymmetry, the distribution of information between the transacting parties is unbalanced,<br />
resulting in an imperfect market. This puts one party (the seller) at an advantage while placing the<br />
other (the buyer) at a disadvantage <strong>and</strong> makes the choice of a product risky for a prospective buyer<br />
(Afzal, Rol<strong>and</strong> & Al-Squri 2009). <strong>Information</strong> asymmetry depends upon the different capabilities <strong>and</strong><br />
intellectual levels of the transacting actors <strong>and</strong> is, therefore, considered as a independent construct<br />
for the LMT. Dependent constructs from information asymmetry are trust, adverse selection, <strong>and</strong><br />
moral hazard.<br />
Devos et al also found that Agency Theory (AT) <strong>and</strong> Prospect Theory (PT) are closely related to the<br />
LMT (Devos, Van L<strong>and</strong>eghem & Deschoolmeester 2010). AT is a well-known theory, largely used in<br />
the str<strong>and</strong> of research on IS <strong>and</strong> outsourcing (Dibbern, Goles & Hirschheim 2004). However,<br />
problems of behavioural differences in risk-taking are also important in addition to asymmetric<br />
information <strong>and</strong> goal differences. The implementation of a strategic IT artefact is highly risky since the<br />
outcomes are only partly verifiable <strong>and</strong> not always expressible in easily measurable outputs. The<br />
likelihood of failure looms large because of the uncertainty of the outcome. This gives rise to<br />
entrepreneurial risk, situated initially with the principal. The transfer of that risk to the agent is not<br />
straightforward, since both parties exhibit differences in risk behaviour. The principal is assumed to be<br />
risk neutral (the entrepreneurial risk) <strong>and</strong> the agent to be risk averse (Eisenhardt 1989). However, it is<br />
also assumed that the principal is risk averse when choosing for a ‘buy’ option. When principals are<br />
faced with adverse possibilities there is an overweighting of certainty, also known as the ‘certainty<br />
effect’ (Kahneman & Tversky 1979). The PT offers some explanation of this situation. PT was<br />
developed by Tversky <strong>and</strong> Kahneman (Kahneman & Tversky 1979) as a falsification for the Expected<br />
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Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
Utility Theory (EUT). PT states that decision making is a two-phase process. The first phase is an<br />
editing phase, in which a proposal or tender is framed in either a positive or negative way. The actual<br />
decision making is done in the second phase, which depends largely on the framing of the proposal.<br />
In decision making under risk, where losses loom larger than gains, people tend to search for<br />
certainty. Thus, the positive framing of proposals can greatly influence the decision <strong>and</strong> is assumed to<br />
be noticeable in a lemon market. The implementation of a strategic information system is an<br />
endeavour with a considerable amount of risk involved <strong>and</strong> often leads to a failure (Bartis & Mitev<br />
2008; Goldfinch 2007; Lyytinen & Robey 1999). Since most SMEs depend largely on external agents<br />
for adoption of IT/IS, a process of selection is conducted. SMEs tend to explore the market by RFPs<br />
(Requests for Proposal). Due to information asymmetry, SMEs cannot screen the proposals of ISVs<br />
on their real content <strong>and</strong> quality sufficiently. We argue that the proposals of ISVs are, therefore,<br />
usually framed in an extremely positive way to comply with the certainty effect of the SME-principal.<br />
Devos et al. built a framework to explain the outsourced information system failure (OISF) in a typical<br />
setting of an SME-principal buying a strategic IT artefact from a ISV-vendor (Devos, Van L<strong>and</strong>eghem<br />
& Deschoolmeester 2009). This framework is shown in Figure 1.<br />
Figure 1: The framework of an outsourced IS failure (Devos et al. 2009)<br />
The interrelated constructs of the framework are:<br />
A risk neutral SME-principal with managerial, methodological <strong>and</strong> technological capabilities <strong>and</strong><br />
practices for planning, designing <strong>and</strong> implementing IT artefacts;<br />
A risk adverse ISV-agent with managerial, methodological <strong>and</strong> technological capabilities <strong>and</strong><br />
practices for planning, designing <strong>and</strong> implementing IT artefacts;<br />
A market where SME-principals <strong>and</strong> ISV-agents meet each other;<br />
A meeting of the minds where SME-principals <strong>and</strong> ISV-agents establish a contract;<br />
An IT artefact, which is a human construction, utilitarian <strong>and</strong> not neutral;<br />
The use of the IT artefact, including a development <strong>and</strong> implementation trajectory;<br />
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Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
The impact of the IT artefact, be it direct or indirect, intended or unintended on the organisation.<br />
An outsourced information system failure (OISF) is considered to have an impact on the<br />
organisation.<br />
We focussed here on a market where SME-principals <strong>and</strong> ISV-agents meet <strong>and</strong> we argue that this<br />
market is under tension of forces that cause it to become a lemon market. The conditions for a market<br />
to become a lemon market are 1) information asymmetry, 2) sellers that have no credible way of<br />
disclosing the real quality to buyers, 3) sellers’ quality that is assessed by buyers acting as ‘von<br />
Neumann-Morgenstein maximizers’ of expected utility (Devos, Van L<strong>and</strong>eghem & Deschoolmeester<br />
2010).<br />
3. Research methodology<br />
Our research was focussed on the quest for indications of a lemon market in a setting where a SMEbuyer<br />
buys a strategic IT artefact (ERP, CRM) from an ISV-seller.<br />
The research methodology consisted of a mixture of two data sources. The first data collection was<br />
the screening of the websites of a group of 484 Belgium ISVs that are targeting the SME-market. This<br />
was followed by six case studies in which the CIOs of SMEs were interviewed about the way they<br />
perceive the services of the ISVs.<br />
The group of ISVs was derived from the business directory ICT TOP 1000, edited <strong>and</strong> published by<br />
Datanews in 2008 (Coenjaerts 2008). The directory contained the 1000 largest IT/IS suppliers <strong>and</strong><br />
ISVs in Belgium, according to their published revenues in 2007. We extracted a list of 484 ISVs from<br />
the directory who were appropriate for our research purposes. Only ISVs or business partners from<br />
large software developers, such as Microsoft, Oracle <strong>and</strong> IBM were selected. Telecom operators <strong>and</strong><br />
pure equipment vendors were excluded from the list. Our final list contained a total of 484 ISVs.<br />
3.1 Screening of websites<br />
We choose to investigate the nature of the offerings from ISVs in the way they present themselves<br />
<strong>and</strong> their services on their websites. For each screened website, we defined five checkpoints, which<br />
were scored on a four-point Likert scale. The values followed the scale: 0 - not present; 1 - minimally<br />
present; 2 - moderately present <strong>and</strong> 3 - maximally present. Detailed criteria were defined for each<br />
checkpoint.<br />
The screening was done in two phases. The first phase was individual scoring, prepared by three<br />
researchers, each of them scoring independently. In the second phase, the scoring process was<br />
redone in a group where all of the individual scores of the researchers were brought together. Via<br />
group discussion <strong>and</strong> stepwise refinement, a group score was given on every checkpoint for all<br />
investigated websites. The checkpoints <strong>and</strong> scoring system are shown in Table 1.<br />
Table 1: Checkpoints <strong>and</strong> scores used to evaluate the websites<br />
score 0 1 2 3<br />
Nr Checkpoint Not present Minimally<br />
present<br />
CP1 Direct focus to SMEs<br />
CP2 Positive framing<br />
CP3 Negative framing<br />
CP4 References<br />
CP5 Use of formal methodology<br />
Moderately<br />
present<br />
Maximally<br />
present<br />
The first checkpoint (CP1) investigates the level of targeting of a specific SME audience by the ISV.<br />
The criteria for the score were as follows. Score 0 was given if no trace was found indicating that the<br />
ISV is targeting an SME audience. Score 1 was given if traces were found indicating that the ISV is<br />
targeting an SME audience, but these traces are not reflected in the mission statements nor in<br />
specific product or service offerings. Score 2 was given if traces were found that the ISV is targeting<br />
an SME audience in their product or service offerings but not in their mission statements. Finally,<br />
score 3 was given if traces were found indicating that the ISV is targeting an SME audience in its<br />
mission statements.<br />
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Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
CP2 en CP3 are derived from the PT <strong>and</strong> indicate whether the website of the ISV is framing product<br />
<strong>and</strong> service offerings in a positive way (CP2) or a negative way (CP3). Examples of signs of positive<br />
framing are the mention of the immediate benefits after the implementation of the IT artefact, without<br />
mentioning how these benefits will be measured <strong>and</strong> the offer of fixed prices for projects without<br />
taking into account knowledge of the scope <strong>and</strong> denying the burden of (organizational) change during<br />
the implementation process. Examples of negative framing are the mention of one or more of the<br />
numerous risks that comes along with the implementation of a strategic information system <strong>and</strong> the<br />
necessary maturity level of management needed to conduct such complex projects (Schmidt et al.<br />
2001). However, there are no simple <strong>and</strong> objective rules to define a positive framing nor a negative<br />
one. Therefore, we screened the websites in two converging phases <strong>and</strong> under the supervision of a<br />
very experienced researcher <strong>and</strong> practitioner. We also assumed that within a regular commercial<br />
activity, <strong>and</strong> certainly within a public context, such as a website, the positive framing of products <strong>and</strong><br />
services is common practice <strong>and</strong> part of the commercial game by which ISVs present their daily<br />
business. However, we noticed that some ISVs tend to slow down on the sales talk in their websites<br />
<strong>and</strong> establish a more serious <strong>and</strong> well-balanced image of how they conduct these complex <strong>and</strong><br />
delicate projects.<br />
We attached different scores to CP3 than to CP2. Score 0 was given if no trace was found indicating<br />
a positive/negative framing <strong>and</strong> was identical for both checkpoints. Score 1 was given for CP2 if one<br />
trace (for example, in a sentence, a quote, a header or a paragraph.) of positive framing was found,<br />
score 2 for two traces <strong>and</strong> score 3 for more than two traces. For CP3, score 1 was given if no trace<br />
(for example, in a sentence, a quote, a header or a paragraph.) of an IS risk was found; score 2 for<br />
one trace <strong>and</strong> score 3 for more than one trace.<br />
CP4 investigated if the website of the ISV uses references of successful projects conducted with<br />
SMEs in the past. Score 0 was given if no trace was found of a sales reference. Score 1 was given if<br />
a reference was given without mentioning the nature of the project <strong>and</strong> a contact person. Score 2 was<br />
given if a reference was given that mentions the nature of the project but does not mention a contact<br />
person. Score 3 was given if the conditions of score 2 are fulfilled with a mention of the name <strong>and</strong><br />
address of one or more contact persons. All references have to be to SME organisations.<br />
Finally CP5 investigated the suggestion from the ISV to use a formal project management<br />
methodology (PMM) for conducting IS projects. A score 0 was given if no trace was found indicating<br />
the use of a PMM; score 1 if the website indicates that an IS project has to be conducted in a<br />
controlled environment; score 2 if there are traces on the website telling the user how to conduct an<br />
IS project without mentioning an explicit formal PMM; <strong>and</strong> finally, score 3 was given if the use of a<br />
formal PMM is mentioned by name.<br />
3.2 Interviews related to the case studies<br />
As a second source of data collection, we conducted six interviews with CIOs of SMEs who recently<br />
finished an outsourced, strategic IT project in their organisation. The questions used in the interviews<br />
covered four areas: 1) strategic importance of IT/IS in their organisation, 2) the use of a formal PMM,<br />
3) the success (or failure) of the IT project <strong>and</strong> 4) the relationship of the organisation with the ISV. In<br />
addition to these four areas, we asked questions that were focussed on general company information<br />
<strong>and</strong> on the job content <strong>and</strong> roles of the interviewees.<br />
The interviews were conducted by two people: the interviewer <strong>and</strong> a secretary, both of whom are<br />
researchers. The interviews were tape recorded for backup reasons, written down <strong>and</strong> then sent to<br />
the interviewees for correction <strong>and</strong> feedback. The average time for the interviews was two hours.<br />
4. Findings <strong>and</strong> discussion<br />
The results of the screening of the websites of the ISVs are summarized in Table 2. From the<br />
observations of CP1, we have learned that less than half of the ISVs (38.9%) have a direct focus on<br />
SMEs. Only 11.0% focus only on SMEs <strong>and</strong> state this in their mission statement. Considering the<br />
large number of SMEs in Europe <strong>and</strong> in Belgium, this indicates that the SME sector is not well<br />
serviced by large ISVs. It appears that most ISVs do not want to profile themselves as a ‘SME-only’<br />
seller. It was also noticed that large ISVs do not target SMEs. Since the list of 484 ISVs contains only<br />
the largest ISVs, one-man companies <strong>and</strong> freelancers are not included in the list. One can assume<br />
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Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
that many SMEs are served by micro enterprises <strong>and</strong> probably even by individual, external persons<br />
<strong>and</strong> that some of these do not even have a website.<br />
Table 2: Results of the screening of the websites<br />
Checkpoint Score 0 Score 1 Score 2 Score 3 Median<br />
CP1 Direct focus to SMEs 61.1% 12.7% 15.2% 11.0% 2<br />
CP2 Positive framing 37.8% 40.3% 12.7% 9.2% 1<br />
CP3 Negative framing 96.8% 2.5% 0.7% 0.0% 0<br />
CP4 References 22.6% 28.6% 14.5% 34.3% 1<br />
CP5 Use of formal methodology 41.7% 20.5% 20.1% 17.7% 1<br />
Positive framing of products <strong>and</strong> services is common practice within the ISV community, although<br />
37.9% of the websites of the ISVs show no trace of positive framing. Almost one out of ten (9.2%) use<br />
an intense form of positive framing in which the commercial message on the website tends to mislead<br />
the potential buyer.<br />
Concerning the negative framing, only a very small percentage (3.2%) scored 1 <strong>and</strong> 2 that indicate<br />
that conducting a strategic IS project implies some risks <strong>and</strong> that an effort on behalf of the customer is<br />
needed to succeed. One can expect such a small percentage, keeping in mind that a website is a tool<br />
in the marketing strategy of ISVs.<br />
The use of references is common practice with ISVs. 34.3% of the ISVs use references of former<br />
projects conducted within SME-organisations, giving detailed information about the customer <strong>and</strong> the<br />
project. These references can be checked almost directly since they include the name of a contact<br />
person <strong>and</strong> the necessary contact information (such as, telephone number or e-mail address). The<br />
‘good’ differentiate themselves here substantially from the ‘lemons’ in the market, on the basis of<br />
honest <strong>and</strong> verifiable information.<br />
The use of a formal PMM is not a common practice in SMEs. Almost half of the ISVs (41.7%) do not<br />
even indicate the use of a PMM. The larger the ISV, the more the use of a formal PMM is promoted<br />
on the website. Some of the ISVs even centre their services around the use of a formal PMM. For the<br />
good, the use of a formal PMM is a necessity, but the lemons do not even mention the concept. This<br />
finding corroborates with the expectation that SMEs are mainly served by small companies <strong>and</strong><br />
freelancers that offer services with low quality <strong>and</strong> that are mainly focussed on technology<br />
(programming, installing, configuring, etc.).<br />
From the interviews in the cases studied, we could deduce that the CIOs consider IT/IS for their<br />
organization more important than the CEOs. Thus, the IS function in their organization does not get<br />
as much attention by the CEO as other major business processes, such as marketing, manufacturing<br />
or sales. Although we used the title of CIO for the interviewees, such a function does not really exist in<br />
most SMEs. Our interlocutors were mainly performing some roles or partial roles of CIOs, such as IT<br />
project management, <strong>and</strong> budget <strong>and</strong> expenditure control. The IT management role of the CIO in a<br />
SME can be seen as a temporary role, often combined with the role of operator/programmer. In the<br />
latter role, they keep track of the daily IT issues (e.g., backups). The managerial level of the CIOs in a<br />
SME can also vary from the strategic level, as the assistant of the CEO <strong>and</strong> involved in important<br />
decision making to the operational level. This is not always straightforward since both levels of<br />
competence are needed in SMEs. For strategic IS projects, the managerial skills of the CIO are<br />
challenged. However, such complex systems also give rise to the need for more advanced technical<br />
skills. Some of the CIOs try to fill in these technical needs by themselves, since this is something the<br />
CEO is expecting from his CIO. However, the need for external, specialized IT expertise was<br />
expressed by all of the interviewees.<br />
All outsourced IT projects were managed by the CIOs in collaboration with a project leader from the<br />
ISV. Four of the six interviewees were not familiar with a PMM to conduct an IT project in their<br />
organisation. Only one (of the six) actually used a PMM <strong>and</strong> only the basic concepts were respected,<br />
such as the establishment of a steering committee <strong>and</strong> the organisation of periodic progress<br />
meetings. The CIOS clearly lacked sufficient knowledge to use more of the tools <strong>and</strong> concepts of a<br />
PMM.<br />
131
Jan Devos, Hendrik Van L<strong>and</strong>eghem <strong>and</strong> Dirk Deschoolmeester<br />
All of the interviewees had past experiences with failed IT projects. However, only one of the CIOs<br />
had terminated a project before it was finished. The main reason mentioned by CIOs for failure – <strong>and</strong><br />
then becoming an OISF - was the erroneous proposal the ISV made before the project began.<br />
Promises on budget, time <strong>and</strong> quality were made that could not be kept in reality. During the course of<br />
the project, it became clear that all of the ISVs had underestimated the budget <strong>and</strong> the timing of the<br />
project. Some of them even lacked the necessary skills to complete the project. The majority of the<br />
CIOs had less severely negative experiences, but made complaints that all ISVs offered proposals<br />
that were too optimistic in terms of budget <strong>and</strong> time needed to implement the IT artefact. One of the<br />
CIO’s negotiated a contract with his ISV in which he anticipated problems from a previously failed IT<br />
project <strong>and</strong> included penalties for late deliveries.<br />
Trust between SME <strong>and</strong> ISV is considered to be one of the most important factors for IT success.<br />
Three of the interviewees chose to do business in the future with their ISV on the basis of trust that<br />
was carefully built up during a past project. However, the other three CIO’s chose not to work in the<br />
future with the ISV who conducted their last IT project. A lack of trust <strong>and</strong> a feeling of deception were<br />
given as reasons.<br />
All of the interviewees had their own way of selecting an ISV, but all of them went to colleagues (<strong>and</strong><br />
sometimes even to competitors) to ask for real references for the selected ISVs. The interviewees<br />
were all aware that the market is not transparent <strong>and</strong> that these checks are necessary to reveal the<br />
real capabilities of an ISV.<br />
5. Conclusion<br />
The evidence from this study leads us to the following conclusions. First, we have confirmed the<br />
expectation that ISVs <strong>and</strong> SMEs meet each other in a market that reveals elements of a lemon<br />
market. Although many ISVs focus specifically on SMEs, others, mostly larger ISVs, do not. Thus,<br />
SMEs are mainly serviced by small ISVs. The larger the ISV organization, the more sophisticated the<br />
services offered, implying that a well matured SME organisation is essential to the capture the real<br />
value of these services.<br />
This study has some major limitations. First, data has been collected only in Belgian ISVs. However,<br />
Belgium is a country many SMEs <strong>and</strong> is, in that sense, quite representative of most of the European<br />
countries. Cultural differences could play a role but were not investigated in this research. In addition,<br />
government initiatives taken by many European countries to support SMEs could lead to different<br />
behaviour of ISVs in the different European domestic markets. In the Benelux <strong>and</strong> in France, regional<br />
governments have already started to introduce ethics charter programmes for ISVs that target the<br />
SME market (eTIC 2010).<br />
Another very important issue that should be raised is the size of the organization of the SME. Since<br />
Europe, <strong>and</strong> particularly Belgium, uses a more limited definition of a SME in terms of size of the<br />
organisation than the United States, the phenomenon of the lemon market may appear differently on<br />
the two continents. We hope that our findings stimulate others to investigate these related research<br />
questions.<br />
Second, it is difficult to reveal relevant data that investigates signs of a lemon market. ISVs are not<br />
cooperative in sharing information about their (possibly unethical) behaviour in the SME market. We<br />
are fully aware that websites possibly offer a biased picture of the services <strong>and</strong> quality of the ISVs.<br />
This is the reason why we decided to use multiple sources of data <strong>and</strong> to include data from the<br />
interviews.<br />
Finally, it could observed that there are indications of a self-cleaning mechanism present in the<br />
market within the group of ISVs, leading to a higher degree of quality <strong>and</strong> also leading to positive<br />
filtering from ‘the buy side’. However, the strongest conclusion is that some SMEs are indirectly<br />
encouraged by ISVs to withdraw from the finalisation of the software acquisition process due to their<br />
inadequate inferior IT capabilities <strong>and</strong> practices. This indicates that the lemon market for outsourced<br />
strategic IS projects is steered by a bidirectional mechanism, contributed to by both the buyer <strong>and</strong> the<br />
seller.<br />
132
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133
Authenticity of Digital Records: An Archival Diplomatics<br />
Framework for Digital Forensics<br />
Luciana Duranti <strong>and</strong> Adam Jansen<br />
University of British Columbia, Vancouver, Canada<br />
luciana.duranti@ubc.ca<br />
adam@dkives.com<br />
Abstract: The field of forensic analysis of digital records is undergoing a rapid maturation process in order to<br />
maintain pace with the change of technology. The evolving best practices in digital forensic investigation that<br />
concern collection, h<strong>and</strong>ling, examination <strong>and</strong> presentation of evidence are predominantly practitioner driven,<br />
with little research directed towards the issues surrounding the maintenance <strong>and</strong> long term preservation of the<br />
authenticity of the evidence collected. Yet, the authenticity of such evidence is essential to the judicial process<br />
for, without authentic evidence, determination of guilt or innocence cannot be certain. As evidence is increasingly<br />
in digital form, higher st<strong>and</strong>ards of conduct are dem<strong>and</strong>ed of those examining <strong>and</strong> preserving it. An<br />
interdisciplinary approach to the digital forensic processes involving the use of archival diplomatics can assist<br />
forensic experts in the determination of the authenticity of digital evidence that has the nature of records, as well<br />
as the identification of key attributes that must be preserved over the long term to demonstrate <strong>and</strong> maintain the<br />
records continuing authenticity. The scientific rigor of archival diplomatics would allow forensic experts <strong>and</strong> the<br />
custodians of collected evidence to demonstrate, over the long term <strong>and</strong> through system <strong>and</strong> technical<br />
migrations, the continuing authenticity of both the records they have collected from a crime scene as evidence<br />
<strong>and</strong> the records they have produced during the examination, submission <strong>and</strong> maintenance of such evidence.<br />
Through an overview of a research project carried out at the University of British Columbia, this paper discusses<br />
how the concepts of archival diplomatics, digital forensics <strong>and</strong> the law of evidence can be integrated to form the<br />
theoretical framework of the new discipline of Digital Records Forensics.<br />
Keywords: digital forensics, digital preservation, archival diplomatics, records, authenticity<br />
1. Introduction<br />
“Without the rigorous process that leads to proven scientific discovery, decision-makers<br />
in the courts <strong>and</strong> elsewhere are left to rely on supposition or worse yet intuition in the<br />
pursuit of justice.” (DFRWS, 2001)<br />
The increased use of technology in the creation <strong>and</strong> management of information in institutions of all<br />
sizes, both public <strong>and</strong> private, has resulted in a greater reliance upon computer-generated <strong>and</strong> stored<br />
materials as evidence This exponential growth has resulted in a rapid maturation of the field of digital<br />
forensics to address the immediate needs of forensics investigators. However, the majority of the<br />
published research in the field has focused on the practitioner driven processes of collection,<br />
h<strong>and</strong>ling, analysis <strong>and</strong> presentation of evidence. As a result, little attention has been paid to the<br />
longer-term issues of the maintenance <strong>and</strong> preservation of evidence <strong>and</strong> the theory, principles, <strong>and</strong><br />
methodological concepts on which these forensic processes should be based. This paper provides an<br />
overview of a research project carried out at the University of British Columbia that addresses the<br />
issues of managing <strong>and</strong> maintaining digital materials produced <strong>and</strong>/or collected during forensic<br />
examinations for as long as needed, <strong>and</strong> presents selected concepts from archival diplomatics that<br />
can contribute to the articulation of the theoretical <strong>and</strong> methodological framework required to develop<br />
strategies <strong>and</strong> procedures for the preservation of authentic digital evidence. The need for a deeper<br />
underst<strong>and</strong>ing of what authenticity means in the digital environment <strong>and</strong> in relation to long term<br />
preservation is increasingly important as cases involving digital evidence are becoming larger <strong>and</strong><br />
more complex <strong>and</strong> the time between initial incident <strong>and</strong> final resolution of court cases is taking longer,<br />
often lasting a decade or more (Jansen, 2010).<br />
The lack of a rigorous, scientific approach to the management <strong>and</strong> maintenance over the long term of<br />
forensic evidence for the support of investigations, along with the absence of consistent terminology<br />
has been highlighted by several of the leading judicial <strong>and</strong> forensic experts. In testimony before the<br />
US Senate, Chief Judge Emeritus Harry Edwards provided testimony on the “paucity of<br />
interdisciplinary scientific research to support forensic disciplines” <strong>and</strong> “the absence of solid scientific<br />
<strong>and</strong> applied research focused on new technology <strong>and</strong> innovation” (Edwards, 2009: 2). The first Digital<br />
Forensics Research Workshop (DRFWS) emphasized the need to “establish a research community<br />
that would apply the scientific method in finding focused near-term solutions driven by practitioner<br />
requirements <strong>and</strong> addressing longer term needs” (DRFWS, 2001: iii). Sujeet Shenoi, in his opening<br />
address to the 2011 International Federation for <strong>Information</strong> Processing (IFIP) Working Group 11.9 on<br />
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Luciana Duranti <strong>and</strong> Adam Jansen<br />
Digital Forensics conference, challenged the participants to conduct <strong>and</strong> publish more peer-reviewed<br />
research in order to advance the field. Already Eoghan Casey had raised concerns about digital<br />
forensics being “a nebulous discipline that lacks st<strong>and</strong>ards or even clear definitions of fundamental<br />
terminology” (Casey, 2004).<br />
In the United States, adding to this need for a consistent theoretical approach to the forensic<br />
processes is the increased application of the ‘Daubert rules’ to determine the admissibility of expert<br />
testimony (Kenneally, 2001). These rules are four general guidelines established in Daubert v. Merrell<br />
Dow Pharmaceuticals, 509 US 579 (1993) to assist judges in determining whether the methodologies<br />
<strong>and</strong> techniques employed to identify scientific evidence were sound <strong>and</strong> widely accepted. They<br />
essentially stated that an inference of a valid process could be made if:<br />
The theory, procedure or process has been tested <strong>and</strong> the test is valid <strong>and</strong> repeatable<br />
It has been subjected to peer review or publication (st<strong>and</strong>ard)<br />
Its known or potential error rate is acceptable<br />
It is generally accepted within the relevant scientific community<br />
These guidelines are of particular concern to the forensics field in the US as Kumho Tire Company v.<br />
Carmichael 526 U.S. 137 (1999) extended them to include expert testimony in other technical <strong>and</strong><br />
specialized fields (Meyers, 2004). Application of the concepts introduced by the Daubert rules is<br />
however spreading well beyond the jurisdiction in which they were first articulated <strong>and</strong> requires the<br />
development of an overarching intellectual framework within which all forensic processes can be<br />
situated <strong>and</strong> articulated as an internally consistent system of ideas <strong>and</strong> practices. This requires<br />
interdisciplinary research in areas of established knowledge capable of supporting the purposes of<br />
forensic activity.<br />
2. The Digital Records Forensics project<br />
The Digital Records Forensics (DRF) project of the University of British Columbia (UBC) was<br />
developed in 2008 to begin addressing the need for an interdisciplinary body of theory <strong>and</strong> methods<br />
supporting the digital forensics processes. The DRF project is a collaboration among the UBC School<br />
of Library, Archival <strong>and</strong> <strong>Information</strong> Studies, the UBC Faculty of Law <strong>and</strong> the Vancouver Police<br />
Department. The project has used multiple methodologies to underst<strong>and</strong> the depth <strong>and</strong> breadth of the<br />
challenges of managing <strong>and</strong> maintaining digital evidence currently faced by the forensics community,<br />
including:<br />
A comparative analysis of existing literature in the fields of computer science, evidence law <strong>and</strong><br />
archival diplomatics,<br />
Analysis of the case law in North American,<br />
Case studies, <strong>and</strong><br />
Semi structured interviews of forensics professionals, lawyers, judges, <strong>and</strong> records managers,<br />
<strong>using</strong> the ethnographic approach.<br />
To address the issues evidenced by its findings, the DRF project is integrating concepts <strong>and</strong> methods<br />
from archival diplomatics, digital forensics <strong>and</strong> the law of evidence to build up the core body of<br />
knowledge of a new scientific discipline called Digital Records Forensics. This discipline will also<br />
leverage on twelve years of research into the long term preservation of the authenticity of digital<br />
records conducted by the International research on Permanent Authentic Records in Electronic<br />
Systems (InterPARES) project, (also based at UBC).<br />
The very first obstacle the DRF project encountered was a need for reconciliation across domains of<br />
the terminology that is at the core of the project itself. For example, while all disciplines involved in the<br />
research deal with “preservation”, they define it quite differently. Most digital forensic models identify<br />
preservation as one of the steps in the forensic process. Carrier’s model refers to preservation as<br />
isolation <strong>and</strong> collection (Carrier, 2003). Reith, Carr, <strong>and</strong> Gunsch define the preservation activity as to<br />
“isolate, secure <strong>and</strong> preserve the state of physical <strong>and</strong> digital evidence,” including “preventing people<br />
from <strong>using</strong> the digital device or allowing other electromagnetic devices to be used within an affected<br />
radius” (Reith et al., 2002: 4). DFRWS recognizes the need for preservation, but does not provide any<br />
significant detail on what preservation means with regards to digital evidence; rather, its model<br />
describes the relevant issues as case management, imaging technologies, chain of custody <strong>and</strong> time<br />
synchronization. The archival view of digital preservation is quite different, as it involves the whole of<br />
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Luciana Duranti <strong>and</strong> Adam Jansen<br />
the principles, policies, strategies <strong>and</strong> activities designed to ensure the physical <strong>and</strong> technological<br />
stabilization of records for the purpose of extending indefinitely their life <strong>and</strong> protecting the accuracy<br />
<strong>and</strong> authenticity of <strong>and</strong> maintaining the accessibility to their intellectual content. Thus, preservation<br />
includes, among many other activities, description, which provides an account of the context,<br />
attributes, <strong>and</strong> relationships of the documents, <strong>and</strong> the development <strong>and</strong> maintenance of retrieval<br />
systems. The continuing authenticity of records has relied for centuries on the concept of an unbroken<br />
chain of custody. However, as the long term storage <strong>and</strong> retrieval of digital objects require both<br />
“physical <strong>and</strong> representational transformations, the traditional concept of an unbroken chain of<br />
custody needs to be exp<strong>and</strong>ed to encompass the processes that are necessary to ensure that an<br />
electronic record is transmitted over time without inappropriate alteration” (Preservation Task Force,<br />
2001: 8). Integrating the archival underst<strong>and</strong>ing of preservation into the forensic models will bring a<br />
more sophisticated underst<strong>and</strong>ing of what is required to effectively preserve evidence over the long<br />
term, an underst<strong>and</strong>ing that heavily relies on the archival diplomatics concept of authenticity.<br />
3. Traditional diplomatics<br />
The first scientific method for establishing the authenticity of records of questionable origin was<br />
developed by the French Benedictine monk Dom Jean Mabillon, who in 1681 wrote De re Diplomatica<br />
libri VI, which analyzed medieval charters in relation to others of similar type looking for deviations<br />
from the routines used by the entities they claimed to be authored by. Mabillon penned his<br />
masterwork in response to a challenge by the Jesuit Boll<strong>and</strong>ist Daniel van Papenbrock questioning<br />
the authenticity of the charters on which the French Abbey of Saint Denis based its patrimonial rights<br />
(Skemer, 1989). However, the scientific validity of the methodology he developed <strong>and</strong> the theoretical<br />
framework that he built for it were recognized by van Papenbrock <strong>and</strong> were used for centuries in<br />
judicial disputes about the authenticity of documentary evidence, which were called “Bella<br />
Diplomatica” or “wars about records”, from the title of Mabillon’s book. From the second half of the<br />
18 th century, the concepts <strong>and</strong> methods of diplomatics were taught in the faculties of law of all major<br />
European universities <strong>and</strong> became the foundation of the law of evidence as we know it today.<br />
Over the centuries, as the introduction of new technologies (e.g. the printing press, photocopiers)<br />
exp<strong>and</strong>ed the creation <strong>and</strong> use of records, the body of knowledge of diplomatics continued to evolve<br />
to accommodate the development of new record types, records creation processes, etc. while<br />
continuing to maintain the ability of its concepts <strong>and</strong> methods to determine the capacity of a record to<br />
st<strong>and</strong> as evidence of the action in the course which it was created. The postulate on which<br />
diplomatics is based is that “regardless of differences in nature, provenance or date, from a formal<br />
point of view all records are similar enough to make it possible to conceive of one typical, ideal<br />
documentary form containing all possible elements of a record” (Duranti <strong>and</strong> Thibodeau, 2006: 16). In<br />
the course of the InterPARES project, researchers proved that the process of decomposing records<br />
into their constituent components <strong>and</strong> analyzing each component independently of the record’s<br />
content in order to determine the authenticity of the whole is as applicable to today’s digital records as<br />
it was to medieval documents. However, as contemporary records are much more dependent on their<br />
context than their medieval counterparts, the theory of archival science was integrated by InterPARES<br />
researchers into diplomatic theory, <strong>and</strong> this resulted in a new discipline that was called archival<br />
diplomatics.<br />
4. When a digital entity is a record<br />
Archival diplomatics is the integration of traditional diplomatic concepts <strong>and</strong> methods with modern<br />
archival theory “based on jurisprudence, the history <strong>and</strong> theory of administration, <strong>and</strong> an extensive<br />
<strong>and</strong> centuries old body of written reflection <strong>and</strong> experience about the nature of records <strong>and</strong> recordkeeping<br />
practices in bureaucratic organizations” (MacNeil, 2004: 205). It is defined as “the discipline<br />
which studies the genesis, forms, <strong>and</strong> transmission of archival documents [or records], <strong>and</strong> their<br />
relationship with the facts represented in them <strong>and</strong> with their creator, in order to identify, evaluate, <strong>and</strong><br />
communicate their true nature “(Duranti, 1989a:17). Like diplomatics, archival diplomatics emphasizes<br />
the importance of identifying records among other kinds of information, because they are considered,<br />
in civil law countries, the “perfect” form of proof of actions <strong>and</strong> transactions, <strong>and</strong>, in common law<br />
countries, an exception to the hearsay rule, which precludes admissibility of any other kind of<br />
documents as evidence. Archival diplomatics has been refined over the course of the InterPARES<br />
research project (1998-2012) <strong>and</strong> continues to evolve with the DRF project. One of the key outcomes<br />
of this process of refinement was the breaking down of the ‘ideal’ digital record into its constituent<br />
parts, all considered requirements for the existence of a record:<br />
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Luciana Duranti <strong>and</strong> Adam Jansen<br />
A stable content <strong>and</strong> a fixed form, meaning that the entity’s content must be stored so that it<br />
remains complete <strong>and</strong> unaltered, <strong>and</strong> its message can be rendered with the same documentary<br />
form or presentation it had when first set aside;<br />
Explicit linkages to other records within or outside the digital system, through a classification code<br />
or other unique identifier;<br />
An identifiable legal-administrative, provenancial, <strong>and</strong> procedural context;<br />
An identifiable author (i.e. the person or organization issuing the record), addressee (i.e., the<br />
person or organization for whom the record is intended), <strong>and</strong> writer (i.e. the person responsible for<br />
the articulation of content);<br />
An action, in which the record participates or which the record supports either procedurally or as<br />
part of the decision making process ; <strong>and</strong><br />
A medium, that is a support or carrier to which the record is affixed (Duranti <strong>and</strong> Thibodeau 2006,<br />
MacNeil, 2000).<br />
On the basis of the diplomatics fundamental assumption that the elements of a record form or<br />
documentary presentation (e.g. the elements of a letter, a memo, a report, a GIS) reveal the presence<br />
of its necessary components listed above <strong>and</strong> their meaning, the InterPARES project developed a<br />
Diplomatic Template of Analysis (IP2, 2008) that identifies all the possible elements of a record’s<br />
external <strong>and</strong> internal form <strong>and</strong> allows for a quick <strong>and</strong> accurate identification of written information as a<br />
record<br />
5. Documentary form <strong>and</strong> authenticity<br />
Archival diplomatic theory states that when a record is proven authentic, one can presume that its<br />
integrity has been maintained (MacNeil, 2004). The opposite however is not true. While authenticity<br />
implies integrity, integrity does not imply authenticity – one can preserve the integrity of a forgery, yet<br />
doing so does not make of it an authentic record. Therefore, there exists another characteristic of a<br />
record that, when combined with integrity, allows for the validation of its authenticity: identity. The<br />
identity of a digital record comprises the whole of the distinguishing attributes that together uniquely<br />
characterize it <strong>and</strong> differentiate it from other records. In order to prove the authenticity of a digital<br />
record, it is necessary to establish its continuing identity <strong>and</strong> demonstrate its integrity. Identity allows<br />
the examiner to differentiate one record from another; to determine the who, what, where, when, why,<br />
<strong>and</strong> to establish the degree of perfection of the record, that is, whether it is a draft, an original or a<br />
copy <strong>and</strong>, if the latter, what type of copy <strong>and</strong> what version of it. From a diplomatic perspective, the<br />
identity of a record is revealed by its documentary form or presentation.<br />
The documentary form of a record is the expression of a set of rules of representation that are meant<br />
to convey a message <strong>and</strong> is composed of both extrinsic elements <strong>and</strong> intrinsic elements. The extrinsic<br />
elements define the appearance of the record; while the intrinsic elements articulate its content by<br />
providing its structure. Together, they reveal its legal, administrative, provenancial, procedural <strong>and</strong><br />
documentary context. From a conceptual viewpoint, “intrinsic elements of form are those which make<br />
a document complete, <strong>and</strong> extrinsic elements are those which make it perfect, that is, capable of<br />
accomplishing its purpose,” (Duranti, 1991: 6).<br />
The InterPARES Diplomatic Template for Analysis identified among the extrinsic elements of digital<br />
records presentation features (i.e., general characteristics, like text, graphics, images or sound, <strong>and</strong><br />
specific characteristics, such as fonts, colors, hyperlinks, layouts, <strong>and</strong> resolution/scale/sample rate),<br />
electronic signatures, digital time stamps, <strong>and</strong> special signs (identifiers denoting the persons involved<br />
in the origination or execution of the record, like digital watermarks <strong>and</strong> logos) (IP1, 2000). Intrinsic<br />
elements establishing the identity of digital records include date, superscription (i.e., the mention of<br />
the name of the author in the upper part of the record, as in an e-mail header), inscription (i.e., the<br />
mention of the name of the addressee), subject, salutation, preamble, subscription, etc.<br />
It is not the purpose of this paper to sum up the concepts of archival diplomatics but to give a sense of<br />
the level of detail diplomatic analysis relies upon, which is not limited to the form of the record, but<br />
concerns the persons (or actors, being participant in the action that the record puts into being or<br />
participate in), the action to which the record relates, by putting it into being (i.e. dispositive record,<br />
like a contract), proving it after it occurred (i.e. probative record, like a certificate), supporting it with<br />
information (i.e. supporting record, like a GIS), discussing it (i.e. narrative record, like a report),<br />
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Luciana Duranti <strong>and</strong> Adam Jansen<br />
guiding it (i.e. instructive record, like a score or a digital form), or enabling it (i.e. enabling record, like<br />
a digital workflow); the procedure or process in which the record takes part, the behaviour of different<br />
types of records (e.g. dynamic, interactive, experiential) <strong>and</strong> the different types of trustworthiness (i.e.<br />
reliability, accuracy <strong>and</strong> authenticity) a record needs to be tested for (Duranti <strong>and</strong> Thibodeau, 2006;<br />
Duranti, 2007; Duranti, 2009, Duranti, 2010).<br />
To assist in the establishment of the identity of a record, InterPARES further developed the concept of<br />
record profiles, which had been previously introduced in the first iteration of the DoD5015.2 st<strong>and</strong>ard<br />
by Duranti <strong>and</strong> Eastwood (Duranti, Eastwood <strong>and</strong> MacNeil, 2002). Record profiles document the<br />
identity of digital records by linking context <strong>and</strong> form in an inextricable way,<br />
6. Authenticity <strong>and</strong> preservation<br />
Custodians can only preserve records as trustworthy (i.e. reliable, accurate <strong>and</strong> authentic) as they are<br />
when first created. It is therefore the custodian’s responsibility to establish the identity of the records<br />
prior to acquiring them <strong>and</strong> to maintain that identity, together with their integrity, afterwards (MacNeil,<br />
2004). In the digital environment, this is a tall order, because it is not possible to preserve digital<br />
records; it is only possible to preserve the ability to reproduce them (Duranti <strong>and</strong> Thibodeau, 2006).<br />
As it will always be necessary to retrieve the binary bits <strong>and</strong> process those bits through the use of<br />
intermediaries (i.e. hardware <strong>and</strong> software) in order to render the evidence into a human readable<br />
format, it falls upon the custodian to ensure that the necessary intermediaries will exist when needed.<br />
To render representations with an accuracy that is able to withst<strong>and</strong> a diplomatic analysis requires the<br />
custodian to store the binary content of the record, including indicators of all the elements of<br />
documentary form necessary to convey the essence of the record, in a manner that ensures the<br />
record will be rendered with the same presentation <strong>and</strong> in the same context that gave it meaning.<br />
Because of technological obsolescence, the conversion <strong>and</strong> migration processes required to preserve<br />
the records will undeniably alter the underlying bits that ‘make’ the record, but here the force of the<br />
archival diplomatics theory comes into play. In fact, such theory allows for the authenticity of the<br />
record to become an inference that one draws from the documentation that is maintained by the<br />
custodian about its components, characteristics, creation, maintenance <strong>and</strong> preservation. This<br />
inference would be supported by the identity <strong>and</strong> integrity metadata included in the record profile that<br />
would be an integral part of any record that is presumed authentic.<br />
7. Conclusion<br />
In the more than three hundred years since its origin, diplomatics has been widely used by European<br />
archivists as a dependable, tested methodology for determining the authenticity of a record. Over the<br />
past ten years, InterPARES has extended diplomatic theory, principles <strong>and</strong> methods to digital records,<br />
integrating them with archival science to form archival diplomatics in order to establish the means of<br />
preserving the authenticity of digital records over the long term. More recently, the DRF project has<br />
tested the concepts of archival diplomatics on the digital forensic process, bringing an<br />
interdisciplinary, academic research-based rigour to the practice of digital forensics, thereby<br />
addressing some of the concerns raised by Edwards, Casey, <strong>and</strong> Shenoi. The research conducted by<br />
InterPARES <strong>and</strong> DRF should support digital forensic work with regard to at least two of the four<br />
Daubert guidelines, by providing a theoretical framework that has been tested <strong>and</strong> has a wide-spread<br />
acceptance within the scientific community, <strong>and</strong> meets international st<strong>and</strong>ards. Further research <strong>and</strong><br />
implementation of archival diplomatic concepts, principles <strong>and</strong> methods within the computer forensics<br />
domain will be necessary not only to meet all the requirements of the Daubert test but also, <strong>and</strong> more<br />
importantly, to ensure that authentic digital evidence is preserved for as long as needed with its<br />
identity <strong>and</strong> integrity intact.<br />
The body of knowledge built by the DRF project through the integration of archival diplomatics, digital<br />
forensics <strong>and</strong> the legal principles underlying the law of evidence is being articulated in a number of<br />
courses at the University of British Columbia School of Library, Archival <strong>and</strong> <strong>Information</strong> Studies<br />
(SLAIS) as part of a newly proposed stream within the Master of Archival Studies program. The<br />
proposed courses will cover the theoretical <strong>and</strong> methodological content of a new discipline called<br />
“digital records forensics” <strong>and</strong> will contribute to the formation of a new kind of archival <strong>and</strong> forensic<br />
professional, able to rely on an established body of concepts, principles <strong>and</strong> methods to continuously<br />
develop new practices capable of dealing with new <strong>and</strong> emerging technologies <strong>and</strong> permanently<br />
preserve the authenticity of the records that they generate.<br />
138
References<br />
Luciana Duranti <strong>and</strong> Adam Jansen<br />
Casey, E. (2004) “The Need for <strong>Knowledge</strong> Sharing <strong>and</strong> St<strong>and</strong>ardization”, Digital Investigation, No. 1, pp.1-2.<br />
Carrier, B. (2003) “Getting Physical with the Digital Investigative Process”, International Journal of Digital<br />
Evidence, Vol. 2, No. 2, pp 1-20.<br />
Daubert v. Merrell Dow Pharmaceuticals, Inc. Daubert (1993) 509 U.S. 579.<br />
Digital Forensics Research Workshop (2001) DTR-T001-01 Final: A Roadmap for Digital Forensic Research –<br />
Report from the First Digital Forensic Workshop (DFRWS), [online] http://www.dfrws.org/2001/dfrws-rmfinal.pdf.<br />
Duranti, L. (1989) “Diplomatics: New Uses for an Old Science, Part I”, Archivaria, Summer, No. 28, pp.7-27.<br />
Duranti, L. (1989) “Diplomatics: New Uses for an Old Science, Part II”, Archivaria, Fall, No. 29, pp.4-17.<br />
Duranti, L. (1999) “Concepts <strong>and</strong> Principals for the <strong>Management</strong> of Electronic Records, or Records <strong>Management</strong><br />
Theory is Archival Diplomatics”, Records <strong>Management</strong> Journal, Vol. 9, No. 3, pp. 148-171.<br />
Duranti, L. (2007) “The InterPARES 2 Project (2002-2007): An Overview”, Archivaria, No. 64, pp. 113-121.<br />
Duranti, L. (2009) “From Digital Diplomatics to Digital Records Forensics”, Archivaria, No. 68, pp. 39- 66.<br />
Duranti, L. (2010) “Concepts <strong>and</strong> Principles for the <strong>Management</strong> of Electronic Records, or Records <strong>Management</strong><br />
Theory is Archival Diplomatics”, Records <strong>Management</strong> Journal, Vol. 20, No. 1, pp. 78-95.<br />
Duranti, L., Eastwood, T. <strong>and</strong> MacNeil, H. (2002) Preservation of the Integrity of Electronic Records, Kluwer<br />
Academic Publishers, Norwell, Massachusetts.<br />
Duranti, L. <strong>and</strong> Thibodeau, K. (2006) "The Concept of Record in Interactive, Experiential <strong>and</strong> Dynamic<br />
Environments: The View of InterPARES", Archival Science, Vol. 6, no. 1, pp 13-68.<br />
Edwards, H. (18 Mar 2009) Strengthening Forensic Science in the United States: A Path Forward. Statement<br />
before the United State Senate Committee on the Judiciary. [online] http://judiciary.senate.gov/pdf/09-03-<br />
18EdwardsTestimony.pdf.<br />
Gerber, M. <strong>and</strong> Leeson, J. (2004) “Formalization of Computer Input <strong>and</strong> Output: The Hadley Model”, Digital<br />
Investigation, No.1, pp. 214-224.<br />
Jansen, A. (2010) “Digital Records Forensics: Ensuring Authenticity <strong>and</strong> Trustworthiness of Evidence over Time”,<br />
Proceedings of the Fifth International Workshop on Systematic Approaches to Digital Forensic Engineering,<br />
pp. 84-88.<br />
InterPARES 1 (IP1) Authenticity Task Force (2000) “Appendix 1: Template of Analysis”, The Long Term<br />
Preservation of Authentic Electronic Records: Findings of the InterPARES Project, University of British<br />
Columbia, [online] http://www.interpares.org/book/interpares_book_j_app01.pdf.<br />
InterPARES 1 (IP1) Preservation Task Force (2001) “Appendix 6: How to Preserve Authentic Electronic<br />
Records”, The Long Term Preservation of Authentic Electronic Records: Findings of the InterPARES<br />
Project, University of British Columbia, [online]<br />
http://www.interpares.org/book/interpares_book_o_app06.pdf.<br />
InterPARES 2 (IP2) (2008) Luciana Duranti <strong>and</strong> R<strong>and</strong>y Preston, eds., International Research on Permanent<br />
Authentic Records in Electronic Systems (InterPARES) 2: Experiential, Interactive <strong>and</strong> Dynamic Records<br />
Appendix 7: Diplomatic Analysis Template, [online], University of British Columbia, [online]<br />
http://www.interpares.org/ip2/display_file.cfm?doc=ip2_book_appendix_07.pdf.<br />
Kenneally, E. (2001) “Gatekeeping Out of the Box: Open Source Software as a Mechanism to Assess Reliability<br />
for Digital Evidence”, Journal of Law <strong>and</strong> Technology, Vol. 6, No. 13, [online]<br />
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Kumho Tire Co. v. Carmichael, (97-1709) 526 U.S. 137 (1999) 131 F.3d 1433, reversed.<br />
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51, pp. 81-111.<br />
MacNeil, H. (2000) “Providing Grounds for Trust: Developing Conceptual Requirements for the Long-Term<br />
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MacNeil, H. (2004) “Contemporary Archival Diplomatics as a Method of Inquiry: Lessons learned from Two<br />
Research Projects”, Archival Science, No. 4, pp. 199-232.<br />
Meyers, M. <strong>and</strong> Rogers, M. (2004) “Computer Forensics: The Need for St<strong>and</strong>ardization <strong>and</strong> Certification”,<br />
International Journal for Digital Evidence, Vol. 3, No. 2.<br />
Reith, M, Carr, C <strong>and</strong> Gunsch, G. (2002) “An Examination of Digital Forensic Models”, International Journal of<br />
Digital Evidence, Vol. 1, No. 3 [online]<br />
http://www.utica.edu/academic/institutes/ecii/ijde/articles.cfm?action=issue&id=3.<br />
Skemer, D. (1989) “Diplomatics <strong>and</strong> Archives”, American Archivist, Vol. 52, Summer, pp. 376-382.<br />
139
A Reflective Framework for Successful IS Implementation<br />
in Healthcare: Applying Theories From IS Innovation <strong>and</strong><br />
Implementation Research<br />
Kate Dymoke-Bradshaw 1 <strong>and</strong> Ann Brown 2<br />
1<br />
Centre for Health Informatics, City University London, UK<br />
2<br />
Cass Business School, London, UK<br />
A.P.Brown@city.ac.uk<br />
Abstract: Healthcare delivery is a complex, collaborative exercise <strong>and</strong> the introduction of a new information<br />
system into this tightly interrelated network can have an impact that is then felt throughout the environment.<br />
There are many factors to be considered <strong>and</strong> in some cases these may be in conflict requiring trade-offs to be<br />
made. What is successful in one setting may not work in another <strong>and</strong> vice versa, so that organisational specifics<br />
need to be carefully considered. This paper presents a comprehensive framework (A Reflective Framework for<br />
Successful IS Implementation) that can be used to manage this type of IS implementation project. It builds on<br />
Greenhalgh et al.’s (2008) diffusion of innovation (DoI) model for complex innovations in health services. This<br />
model has a number of strengths that make its application to IS innovation projects in healthcare valuable: it<br />
provides a good, comprehensive framework <strong>and</strong> a multi-level approach to the analysis of success factors for IS<br />
innovation projects; it takes into account the complexities of the healthcare environment; <strong>and</strong> it provides a<br />
rationale for why various factors are important to success. It was, however, originally designed to be used in a<br />
different context <strong>and</strong> this paper therefore extends the original model by drawing on a number of supplementary<br />
concepts <strong>and</strong> theories from IS innovation <strong>and</strong> implementation research to develop a tool for prospective use in<br />
the implementation of a complex new large scale IS within a single healthcare organisation such as a hospital. In<br />
developing the reflective framework, a key additional component has been added to the nine original components<br />
of Greenhalgh et al.’s model: the adaptation process by which a good fit is developed between the information<br />
system <strong>and</strong> the organisation that will use it. Critical success factors identified for this process include strong user<br />
participation, minimal customisation, appropriate use of consultants <strong>and</strong> testing, training <strong>and</strong> support covering<br />
both technology <strong>and</strong> associated processes. The framework was developed as part of research conducted in the<br />
early stages of a project to introduce electronic prescribing <strong>and</strong> medicines management into an NHS acute trust<br />
as part of the NHS Connecting for Health National Programme for IT.<br />
Keywords: healthcare, IS implementation, frameworks<br />
1. Introduction<br />
The delivery of healthcare is a complex, collaborative exercise. As Berg (1999) has described, the<br />
roles <strong>and</strong> tasks of doctors <strong>and</strong> nurses are interwoven both with each other <strong>and</strong> with tools, documents<br />
<strong>and</strong> machines; the work is fluid in nature <strong>and</strong>, although much of it follows routine paths, it is also<br />
common for sudden events <strong>and</strong> contingencies that require ad hoc <strong>and</strong> pragmatic responses to arise;<br />
decision making is often distributed with many different individuals involved. Introducing a new<br />
information system (IS) or other new element into this tightly interrelated network, or removing an<br />
existing element, can have an impact that is then felt throughout the healthcare environment. There<br />
are many factors to be considered <strong>and</strong> in some cases these may be in conflict requiring trade-offs to<br />
be made. What is successful in one setting may not work in another <strong>and</strong> vice versa, so that<br />
organisational specifics need to be carefully considered.<br />
Additionally, the consequences of getting it wrong can be significant. A new IS may be expected to<br />
improve patient care <strong>and</strong> safety by making more accurate <strong>and</strong> up-to-date information available to<br />
support clinical decision making or by eliminating errors (e.g. NHS Connecting for Health, 2010a;<br />
2010b). If, however, there are problems with the implementation there may be a risk that patient care<br />
<strong>and</strong> safety are adversely impacted as a consequence.<br />
Since 2003, the UK Department of Health has run a major programme, the Connecting for Health<br />
(CFH) National Programme for IT (NPfIT), to deliver new computer services <strong>and</strong> applications to the<br />
National Health Service (NHS) in Engl<strong>and</strong>. This programme has had an erratic record. It has cost far<br />
more than originally budgeted. It has taken far longer than originally planned, but is now beginning to<br />
deliver some of the promised technology <strong>and</strong> benefits. Obtaining the full benefits of this programme<br />
within the health sector <strong>and</strong> particularly hospitals has become an important objective for the whole<br />
sector.<br />
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Kate Dymoke-Bradshaw <strong>and</strong> Ann Brown<br />
The problem that this paper addresses is how to implement a complex new large scale IS<br />
successfully within an individual hospital. The approach taken has been to develop a reflective<br />
framework to be used as a tool by the Project Manager of an IS implementation project. The<br />
framework (A Reflective Framework for Successful IS Implementation) can be used to assess the<br />
risks involved in the implementation <strong>and</strong> to identify the issues that look likely to be important for<br />
successful exploitation. This should enable the Project Manager to better manage the risks, plan the<br />
project steps <strong>and</strong> monitor progress. The framework is in the form of a set of questions for the Project<br />
Manager to address. It draws on a number of theories including that of innovation diffusion (Cooper<br />
<strong>and</strong> Zmud, 1990; Fichman, 1992; Rogers, 2003; Swanson <strong>and</strong> Ramiller, 2004), but owes much of its<br />
final form to the pioneering work of Greenhalgh et al. (2008). The framework was developed as part of<br />
research work carried out during the early stages of a project to introduce electronic prescribing <strong>and</strong><br />
medicines management into an NHS acute trust as part of the NHS Connecting for Health National<br />
Programme for IT.<br />
Section 2 of the paper introduces Greenhalgh’s model. Section 3 presents the framework together<br />
with the reasoning on which it is based.<br />
2. The contribution of the diffusion of innovation model by Greenhalgh et al.<br />
This paper is concerned with complex IS innovation projects, new to the adopting organisation<br />
(Rogers, 2003; Swanson <strong>and</strong> Ramiller, 2004) – the type of IS that will typically be implemented into<br />
the core of the healthcare organisation’s operations <strong>and</strong> will have a direct impact on clinical care. Of<br />
Fichman’s (1992) four different adoption contexts within his framework this is clearly a cell 4<br />
application, i.e. adopted at the organisational level, imposing a heavy knowledge burden on adopters<br />
<strong>and</strong> having a significant impact on business processes <strong>and</strong> workflows.<br />
We took as the starting point for our reflective framework Greenhalgh et al.’s diffusion of innovation<br />
(DoI) model for complex innovations in health services (Greenhalgh et al., 2008). This model, shown<br />
in Table 1, is based on an extensive literature review (Greenhalgh et al., 2004) to address how<br />
innovations in health service delivery <strong>and</strong> organisation can be spread <strong>and</strong> sustained <strong>and</strong> it identifies<br />
nine interacting components that affect success in adopting complex innovations.<br />
The model has a number of strengths that make its application valuable to IS innovation projects in<br />
healthcare:<br />
It provides a good, comprehensive framework <strong>and</strong> a multi-level approach to the analysis of<br />
success factors for IS innovation projects, developed through a systematic review of<br />
approximately 600 sources;<br />
It was designed to be applied to a large NHS new technology project involving the implementation<br />
of a complex healthcare information system (Fichman cell 4 type applications);<br />
It takes into account the complexities of the healthcare environment; <strong>and</strong><br />
It provides a rationale for why various factors are important to success.<br />
It was, however, designed for use in a different context to that which we are interested in <strong>and</strong> has<br />
some different underlying assumptions.<br />
It was designed to be applied to a case study which examined the diffusion process by which a fully<br />
developed summary care record service (SCR) was adopted across a number of different<br />
organisations, which included GP practices, out-of-hours clinics, walk-in centres <strong>and</strong> emergency<br />
departments. We are interested in the innovation process within a single organisation.<br />
Also, use of the SCR was optional: participation by GP sites in loading data into the SCR was<br />
optional; patients could choose to opt out if they did not wish to have a record; <strong>and</strong> individual<br />
clinicians working in emergency <strong>and</strong> unscheduled care situations were able to choose whether or not<br />
to access the SCR on a patient by patient basis. We are interested in situations where use of the new<br />
IS will usually be m<strong>and</strong>ated.<br />
Cooper <strong>and</strong> Zmud (1990) propose that IS implementation projects, once the adoption decision has<br />
been taken, typically consist of four stages: adaptation, where the IS is adapted to meet the<br />
organisation’s needs, organisational procedures are revised <strong>and</strong> developed incorporating its use, <strong>and</strong><br />
staff are trained both in the new procedures <strong>and</strong> the use of the system; acceptance, where the IS is<br />
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Kate Dymoke-Bradshaw <strong>and</strong> Ann Brown<br />
employed in organisational work; routinisation, where use of the IS becomes established as normal<br />
activity <strong>and</strong> it is no longer perceived as something out of the ordinary; <strong>and</strong> infusion, where the IS is<br />
used within the organisation to its highest potential. Greenhalgh et al. focused purely on the<br />
implementation <strong>and</strong> routinisation process in their case study as the way in which the SCR <strong>and</strong> the<br />
processes for <strong>using</strong> it had been designed <strong>and</strong> developed was beyond their scope. We are also<br />
interested in the adaptation process within the adopting organisation.<br />
Table 1: Components of the diffusion of innovation model for complex innovations in health services<br />
(Greenhalgh et al., 2008)<br />
1. Material properties of the technology<br />
To be successfully <strong>and</strong> widely adopted, a technology must include key functionality <strong>and</strong> work smoothly <strong>and</strong><br />
efficiently under real conditions of use<br />
2. Attributes of the technology as an innovation<br />
To be successfully <strong>and</strong> widely adopted, a technology must be seen by potential adopters as having<br />
Relative advantage (that is, clear benefits over existing technologies)<br />
Simplicity<br />
Compatibility with existing values <strong>and</strong> ways of working<br />
Trialability (can be tried out on a limited basis "without obligation")<br />
Observability (benefits can be seen directly)<br />
Potential for reinvention (capacity for users to customise <strong>and</strong> adapt it)<br />
3. Concerns of potential adopters<br />
Adoption is a process, not a one-off event, <strong>and</strong> is influenced by concerns, including<br />
Before adoption—what are its properties <strong>and</strong> potential benefits?; what will it cost me?<br />
During early use—how do I make it work?; when <strong>and</strong> how should I use it?<br />
During established use—how can I alter or improve it?<br />
4. Communication <strong>and</strong> influence<br />
A person’s decision to adopt an innovation is influenced by<br />
Mass media (press, mail shots), which can raise awareness<br />
Interpersonal influence (by champions, opinion leaders, for example), which can change people’s attitudes<br />
towards adoption<br />
5. Organisational antecedents for innovation<br />
Organisations may be more or less innovative. Differences are explained by several factors:<br />
Absorptive capacity for new knowledge<br />
Leadership <strong>and</strong> management<br />
Risk taking climate<br />
Effective data capture systems<br />
Slack resources<br />
6. Organisational readiness for innovation<br />
An organisation must be "ready" for a specific innovation. Readiness includes<br />
Innovation-system fit<br />
Tension for change<br />
Balance between supporters <strong>and</strong> opponents<br />
Specific preparedness<br />
7. The implementation <strong>and</strong> routinisation process<br />
Implementing a complex innovation, <strong>and</strong> making sure it becomes business as usual, is a highly non-linear<br />
process, typically characterised by shocks <strong>and</strong> setbacks. Critical success factors include<br />
Appropriate change model (balance between "make it happen" <strong>and</strong> "let it emerge")<br />
Good project management<br />
Autonomy of frontline teams<br />
Human resource factors, especially the selection, retention, continuity, <strong>and</strong> training of staff<br />
Alignment between new <strong>and</strong> old routines<br />
8. Linkage<br />
Innovation is more likely when there is<br />
Early <strong>and</strong> ongoing dialogue between the developers of the innovation, the change agents charged with<br />
promoting its adoption, <strong>and</strong> the end users<br />
Communication within the organisation <strong>and</strong> between similar organisations<br />
9. The wider environment<br />
Innovation in organisations is more likely when a "following policy wind," a conducive socio-political climate,<br />
<strong>and</strong> specific incentives <strong>and</strong> m<strong>and</strong>ates at national level are present<br />
Finally, Greenhalgh et al. applied their model retrospectively to interpret <strong>and</strong> explain their<br />
observations. We are interested in developing a framework that can be applied prospectively to an IS<br />
implementation project to identify risks <strong>and</strong> issues <strong>and</strong> support successful implementation.<br />
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In consequence, some components of the DoI model do not go into the detail needed in addressing<br />
how to implement a complex new IS successfully within an individual health care organisation such as<br />
a hospital, or are based on assumptions that are not fully valid in the situations that we are interested<br />
in.<br />
The IS innovation <strong>and</strong> implementation literature has a number of useful concepts <strong>and</strong> theories that do<br />
apply to these situations, in particular those based on research into the implementation of enterprise<br />
resource planning (ERP) systems. Although commercially available healthcare records systems, such<br />
as the CRS, <strong>and</strong> ERP systems are targeted at very different markets, there are a number of<br />
similarities which make the findings from ERP applicable to healthcare records systems:<br />
Both are complex packaged solutions<br />
Both require the organisation to change <strong>and</strong> integrate its processes to fit the software<br />
Both produce <strong>and</strong> access information in a real-time environment<br />
Both have proved challenging to implement successfully in practice (Berg, 2001; Car et al., 2008;<br />
Coiera, 2003; Nah et al., 2001; Robey et al., 2002)<br />
We have therefore adapted the model <strong>and</strong> supplemented it with a number of additional theories to<br />
form our reflective framework. Specific areas we have drawn on include mindful innovation (Swanson<br />
<strong>and</strong> Ramiller, 2004), commitment to the project (Kim <strong>and</strong> Kankanhalli, 2009; Nah et al., 2001), user<br />
involvement <strong>and</strong> participation (Robey et al., 2002; Vaughan, 2001), managing resistance (Kim <strong>and</strong><br />
Kankanhalli, 2009; Vaughan, 2001) <strong>and</strong> building clinical engagement (Kaplan <strong>and</strong> Harris-Salamone,<br />
2009; NHS Institute for Innovation <strong>and</strong> Improvement, 2008; Siriwardena, 2009), overcoming<br />
knowledge barriers (Robey et al., 2002), managing change (Nah et al., 2001), minimising<br />
customisation (Nah et al., 2001), <strong>and</strong> managing process redesign (Berg, 2001; Heeks, 2006).<br />
3. A reflective framework for successful IS implementation<br />
The framework is organised into ten components, nine of which are exactly the same as those that<br />
Greenhalgh identified. We have added one key additional component (item 3.7 below) – the<br />
adaptation process by which a good fit is developed between the information system <strong>and</strong> the<br />
organisation that will use it. The framework takes the form of a series of questions that the Project<br />
Manager needs to address.<br />
The numbering does not denote an ordering of the components. Although some components need to<br />
be settled early in the project life cycle (for example 3.1 Material properties of the technology <strong>and</strong> 3.9<br />
Linkage), most components need to be addressed in parallel from the beginning of the project. Indeed<br />
many of the components raise issues that need active managing long after the initial successful<br />
installation if the hospital is to reap the full benefit of the new IS <strong>and</strong> reach Cooper <strong>and</strong> Zmud’s (1990)<br />
final stage of infusion.<br />
Mindful innovation (Swanson <strong>and</strong> Ramiller, 2004) can be thought of as an overarching principle for<br />
the successful implementation of IS innovations in healthcare <strong>and</strong> is a fundamental concept<br />
underpinning many of the components of the framework. Successful implementation cannot be<br />
achieved without careful reflection on what is appropriate in a given situation. A mindful approach<br />
takes account of the specifics of the complex healthcare environment with its many relationships <strong>and</strong><br />
interactions <strong>and</strong> with the need to respond to unexpected events. It investigates <strong>and</strong> addresses<br />
problems <strong>and</strong> risks, recognising different perspectives <strong>and</strong> conflicting needs, <strong>and</strong> it is flexible in<br />
situations that may be inherently uncertain <strong>and</strong> subject to crisis.<br />
The key aspects of each component are presented <strong>and</strong> explained below.<br />
3.1 Material properties of the technology<br />
Are the key functional requirements well understood? How have they been / will they be documented?<br />
What are the key use cases? How well are they understood / defined?<br />
Which functional requirements cannot be fully met by the system? Where are the most serious gaps? How can<br />
these be worked around?<br />
Are non-functional requirements (e.g. system capacity, performance, access <strong>and</strong> security, availability, backup<br />
operation in the event of outages) well understood?<br />
What additional hardware/networking will be required to support use of the system?<br />
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To be successful, the IS must include key functionality <strong>and</strong> work smoothly <strong>and</strong> efficiently under real<br />
conditions of use (Greenhalgh et al., 2008). These questions probe the extent to which the<br />
organisation’s key requirements are understood <strong>and</strong> how well they are met by the technology,<br />
identifying potential problems <strong>and</strong> issues <strong>and</strong> allowing any significant gaps to be addressed early on.<br />
3.2 Attributes of the technology as an innovation<br />
What are the main benefits of the new system over current practice? Are these benefits clear to the users of<br />
the system?<br />
Are there any groups who will not gain benefits directly? Are the overall benefits clear to them?<br />
Will the project be able to take an incremental approach to implementation, keeping each stage as simple as<br />
possible?<br />
What can be done to make the system easy to learn <strong>and</strong> to use?<br />
What are the changes to existing values <strong>and</strong> ways of working for different stakeholder groups? Where will most<br />
change be required? How can these changes be best managed?<br />
How can the new system <strong>and</strong> ways of working be tried out <strong>and</strong> if necessary modified<br />
(a) before initial implementation<br />
(b) during roll-out<br />
What plans are there to demonstrate the new system <strong>and</strong> ways of working more widely before it is<br />
implemented?<br />
What steps will be taken to demonstrate that benefits are being achieved in practice once the system is in use?<br />
What potential is there to configure the system to the needs of individual users?<br />
It will be easier to adopt a new IS where its benefits are clear <strong>and</strong> can be directly observed.<br />
Emphasising the benefits of implementing the IS to patients <strong>and</strong> to the delivery of healthcare is an<br />
important factor in building clinical engagement (Siriwardena, 2009). Healthcare IS projects are more<br />
likely to be successful if they can be delivered in incremental steps, minimising the amount of change<br />
required at once, keeping processes <strong>and</strong> procedures involving use of the system as simple as<br />
possible <strong>and</strong> allowing for learning from one step to the next (Heeks, 2006). A new IS is also more<br />
likely to be successfully adopted if it can be tried out in a meaningful way before it is implemented,<br />
<strong>and</strong> there is capacity for individual users to configure it to their own needs (Greenhalgh et al., 2008).<br />
3.3 Concerns of potential adopters<br />
How are the concerns of key stakeholders <strong>and</strong> stakeholder groups being identified?<br />
What are the main concerns of the key stakeholder groups at the moment? How will these concerns be verified<br />
<strong>and</strong> how will they be addressed by the project?<br />
How will concerns continue to be identified <strong>and</strong> addressed as the project progresses from initiation through to<br />
initial implementation <strong>and</strong> roll-out?<br />
How will experiences <strong>and</strong> issues encountered (<strong>and</strong> addressed) in other healthcare organisations adopting<br />
similar systems be used by the project <strong>and</strong> shared with stakeholders?<br />
The political nature of IS implementation in healthcare needs to be managed in order to avoid failure<br />
“through ‘resistance’ <strong>and</strong> even ‘sabotage’ by users who are not taken seriously” (Berg, 1999). It is<br />
therefore important underst<strong>and</strong> <strong>and</strong> address the concerns of users <strong>and</strong> other stakeholders, so that<br />
participants can see tangible outcomes as a result of their engagement not only initially but also over<br />
time (CRG Research Limited <strong>and</strong> Cardiff University Centre for Health Sciences Research, 2008).<br />
3.4 Communication <strong>and</strong> influence<br />
What plans are there to raise <strong>and</strong> maintain awareness of the project?<br />
What are current attitudes towards the project? Are expectations realistic? How will the project manage<br />
attitudes <strong>and</strong> expectations?<br />
Who are the champions <strong>and</strong> opinion leaders who could change people’s attitudes to adoption? How can they<br />
be used most effectively?<br />
General communication (presentations, newsletters, system demonstrations, etc.) <strong>and</strong> the<br />
interpersonal influence of project champions, opinion leaders <strong>and</strong> others (Greenhalgh et al., 2008)<br />
can be used to help reduce resistance to the new IS <strong>and</strong> to improve engagement.<br />
3.5 Organisational antecedents for innovation<br />
What is the organisation's previous experience with IS implementation? Has it previously been successful in<br />
implementing projects of similar size <strong>and</strong> complexity?<br />
Is the organisation used to working in ways that this project requires (e.g. in interprofessional teams, across<br />
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clinical <strong>and</strong> management boundaries)?<br />
Is there strong leadership, a clear strategic vision <strong>and</strong> good managerial relations? Are visionary staff in pivotal<br />
positions?<br />
Is the climate conducive to experimentation? Is the organisation experienced in risk management?<br />
Are sufficient resources available for the project <strong>and</strong> for implementation <strong>and</strong> roll-out?<br />
There are a number of factors that affect an organisation’s ability to innovate: its previous experience<br />
in innovation, leadership <strong>and</strong> management, a risk-taking climate, <strong>and</strong> availability of resources (time,<br />
money <strong>and</strong>/or expertise) (Greenhalgh et al., 2008). If the organisation does not have sufficient<br />
experience in implementing this type of project, it should consider ways of acquiring relevant<br />
expertise, e.g. by employing an experienced project manager or change manager, or by making use<br />
of external consultancy (Robey et al., 2002). Good risk management is needed, looking carefully at<br />
the possibility of failure <strong>and</strong> learning through improvisation <strong>and</strong> experimentation (Heeks, 2006;<br />
Swanson <strong>and</strong> Ramiller, 2004). The availability of clinical staff resources can be a particular issue for<br />
many projects: finding ways of involving clinical <strong>and</strong> other user representatives, <strong>using</strong> their insights<br />
<strong>and</strong> knowledge to improve the effectiveness of the project team <strong>and</strong> helping to identify <strong>and</strong> avoid<br />
problems is essential (Robey et al., 2002; Vaughan, 2001).<br />
3.6 Organisational readiness for innovation<br />
How well does the new system fit with existing values, strategies <strong>and</strong> goals?<br />
How well does the new system fit with the current skill mix?<br />
How well does the new system fit with the existing IT infrastructure <strong>and</strong> other information systems?<br />
Why does the current situation need to be improved? Do staff underst<strong>and</strong> <strong>and</strong> support this?<br />
Is there good support <strong>and</strong> advocacy for the project? Where are there gaps?<br />
Where is there resistance to the project? How will this be managed?<br />
What mechanisms will there be to monitor <strong>and</strong> evaluate both anticipated <strong>and</strong> unanticipated impacts of the<br />
system once it is in operational use?<br />
A number of factors need to be assessed in considering organisational readiness for innovation.<br />
These include: the extent to which the new IS fits with the organisation’s existing values, goals, skill<br />
mix, supporting technologies <strong>and</strong> ways of working; the strength of perception that the current situation<br />
must be changed; strong support <strong>and</strong> advocacy for the project; <strong>and</strong> the capacity to evaluate the<br />
innovation (Greenhalgh et al., 2004). For any aspect where there is poor organisational readiness<br />
needs to be investigated carefully to determine how best to address it.<br />
3.7 The adaptation process<br />
Will the project have a carefully selected, representative <strong>and</strong> committed core team of users empowered to act<br />
on behalf of their colleagues?<br />
How will the relevant information required for system configuration be gathered? Who will be involved in this<br />
process?<br />
How will the need for process changes be assessed <strong>and</strong> new ways of working designed? Who will be involved<br />
in this?<br />
Will any customisation of the technology be required? If so, how will this be minimised?<br />
What consultancy/external expertise will be available to the project? How will this be used?<br />
What sort of test environment will be available? Will it include realistic test data?<br />
How will the system be tested to ensure it includes all necessary functionality?<br />
How will the system be tested against non-functional requirements?<br />
How will new processes <strong>and</strong> ways of working be tested?<br />
How will training be developed? Will it be audience-specific? Will it cover both processes <strong>and</strong> use of the<br />
software? Will it include opportunities for h<strong>and</strong>s-on practice?<br />
What sort of training environment be available? Will it include realistic test data?<br />
What mechanisms will be in place to support users as they start to use the system in a live environment?<br />
We have added this component to the framework to cover the adaptation process (Cooper <strong>and</strong> Zmud,<br />
1990) in more detail. Strong, representative user participation is needed both in the configuration of<br />
the technology <strong>and</strong> in the design of associated processes (Berg, 2001; Heeks, 2006; Nah et al., 2001;<br />
Robey et al., 2002; Vaughan, 2001). An iterative approach, learning through improvisation <strong>and</strong><br />
experimentation, will make it easier for "design-reality gaps" to be identified <strong>and</strong> closed at an early<br />
stage (Heeks, 2006). Where a software package is being implemented, minimising system<br />
customisation (Nah et al., 2001) will enable the organisation to take advantage of newer versions <strong>and</strong><br />
releases more easily, <strong>and</strong> appropriate use of consultants <strong>and</strong> experts can help determine how best to<br />
configure the technology for the organisation's particular environment (Robey et al., 2002). Both<br />
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testing <strong>and</strong> training should cover changes in ways of working as well as the technical use of the<br />
system, <strong>using</strong> as realistic an environment as possible (Nah et al., 2001; Robey et al., 2002) <strong>and</strong><br />
training should be audience-specific, allowing sufficient time <strong>and</strong> practice for users to become familiar<br />
with new ways of working (Kim <strong>and</strong> Kankanhalli, 2009; Vaughan, 2001). A support organisation to<br />
meet users’ needs after installation also needs to be put in place (Nah et al., 2001).<br />
3.8 The implementation <strong>and</strong> routinisation process<br />
How will top management support for <strong>and</strong> commitment to the implementation process be built <strong>and</strong> maintained?<br />
What implementation approach will the project take, e.g. “big bang”, phased roll-out, incremental delivery of<br />
functionality, pilot <strong>and</strong> scale-up?<br />
How will the implementation of process <strong>and</strong> other business changes be monitored <strong>and</strong> managed?<br />
How will system problems <strong>and</strong> issues arising during implementation be identified <strong>and</strong> resolved?<br />
How will training be managed <strong>and</strong> delivered over time as the system is rolled out <strong>and</strong> from initial<br />
implementation through to routine use?<br />
How will support for users be managed over time as the system is rolled out <strong>and</strong> from initial implementation<br />
through to routine use?<br />
Will there be difficulties in aligning new <strong>and</strong> old routines? How will these be managed?<br />
Top management support <strong>and</strong> commitment is needed throughout the project life cycle (Kim <strong>and</strong><br />
Kankanhalli, 2009) <strong>and</strong> it is important to maintain this through the implementation <strong>and</strong> routinisation<br />
process. Incremental implementation is more likely to be successful than a “big bang” approach; this<br />
could be achieved by introducing the system to one healthcare function at a time, through delivery of<br />
functionality in a series of steps or by <strong>using</strong> a pilot-<strong>and</strong>-scale-up approach (Heeks, 2006). However<br />
carefully implementation is planned <strong>and</strong> prepared for, unexpected problems <strong>and</strong> issues are likely to<br />
arise (Berg, 2001). It is important that these are identified <strong>and</strong> addressed quickly to minimise any<br />
adverse impact. High levels of support are likely to be needed initially, with a strong support presence<br />
as users start to use the system for real (Nah et al., 2001). Other factors affecting the success of the<br />
implementation <strong>and</strong> routinisation process include human resource factors including the selection,<br />
retention, continuity <strong>and</strong> training of staff, <strong>and</strong> alignment between new <strong>and</strong> old routines (Greenhalgh et<br />
al., 2008).<br />
3.9 Linkage<br />
How will relationships with suppliers be built <strong>and</strong> managed?<br />
How will champions <strong>and</strong> opinion leaders be used to promote the adoption of the technology?<br />
How will ongoing communication about the project, based on a shared language for describing the innovation<br />
<strong>and</strong> its impact, be developed?<br />
How will links with other healthcare organisations adopting similar systems be developed <strong>and</strong> experiences<br />
shared?<br />
Greenhalgh et al. (2008) consider early <strong>and</strong> ongoing dialogue between developers, change agents<br />
<strong>and</strong> end users to be an important factor in successful innovation, along with communication both<br />
within the organisation <strong>and</strong> between similar organisations. Building close communications with<br />
suppliers will enable the project to make use of their expertise. The influence of champions <strong>and</strong><br />
opinion leaders can change people's attitudes to adoption. Clear communication with consistent<br />
messages will help build <strong>and</strong> maintain clinical engagement. Using <strong>and</strong> sharing knowledge of other<br />
organisations' experiences can be extremely valuable <strong>and</strong> a good way of addressing concerns.<br />
3.10 The wider environment<br />
How extensive is the use of this type of system in other healthcare organisations?<br />
What is the national policy towards adopting the technology? Are there any specific incentives or m<strong>and</strong>ates for<br />
its use?<br />
What are the media <strong>and</strong> public perspectives on the technology?<br />
There are a number of factors in the wider environment that affect how attractive the new IS is to the<br />
organisation. These include the direction of official policy (e.g., in the UK, from the Department of<br />
Health), the general socio-political climate <strong>and</strong> specific m<strong>and</strong>ates <strong>and</strong> incentives (Greenhalgh et al.,<br />
2008).<br />
4. Conclusion<br />
This is a framework intended for use in the early, planning stages of a project, helping to shape<br />
project plans <strong>and</strong> identify potential risks <strong>and</strong> issues. However it identifies issues that should be<br />
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addressed throughout the project life cycle. It has been designed primarily for use in the following<br />
circumstances:<br />
In a complex IS innovation project where technology with a high knowledge burden or high user<br />
interdependencies is to be adopted within an organisation<br />
Where the innovation is to be implemented within the technical core of the organisation. In the<br />
case of healthcare, this means to support core clinical processes, not just administrative<br />
processes.<br />
Where use of the innovation is likely to be m<strong>and</strong>ated within the organisation.<br />
Where an externally provided service or packaged solution is to be implemented <strong>and</strong> control over<br />
design is therefore significantly constrained, i.e. it is applicable to a service or product<br />
implementation project rather than to a “traditional” IS development project.<br />
This approach is particularly appropriate in a healthcare environment where patient safety is critical<br />
<strong>and</strong> the consequences of getting it wrong could cause significant harm. It should also be applicable to<br />
IS innovation projects in other sectors where the general context is similar, although the relative<br />
importance of different success factors may vary. Further research is needed to test the model in the<br />
healthcare sector.<br />
References<br />
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147
The Effectiveness of EBSE in Modifying Professional<br />
Practice – an Experimental Protocol <strong>and</strong> Study<br />
Graham Fletcher <strong>and</strong> Marie Cahillane<br />
Cranfield University, Shrivenham, UK<br />
g.p.fletcher@cranfield.ac.uk<br />
m.cahillane@cranfield.ac.uk<br />
Abstract: This paper reports on an experiment to investigate if evidence based systematic reviews have the<br />
power to modify people’s opinion. A blind, primary study, was conducted indicating that there are statistically<br />
significant differences between people’s opinions when compared with coving the same material in an<br />
unstructured manner.<br />
Keywords: evidence based research, evaluation, education<br />
1. Introduction<br />
Evidence based software engineering (EBSE) is the extension of evidence based scientific principles<br />
into the field of software engineering. Evidence based science comes primarily from medical research<br />
where it was discovered that following the recommendations of systematic reviews provides better<br />
results than those achieved by following expert advice alone (Antman 1992). The process of<br />
systematic review is central to EBSE. In one of the first published papers to propose the concept<br />
Kitchenham et. al. state<br />
“...some aspects of EBSE are essentially low risk <strong>and</strong> should be adopted as soon as<br />
possible, such as the development <strong>and</strong> adoption of guidelines for systematic<br />
reviews.”(Kitchenham 2004)<br />
Since 2004 a significant amount of research effort has gone into the development of systematic<br />
reviews in a wide range of software engineering topics (Kitchenham 2009). However, the point of a<br />
systematic review is to affect practice. There is little point in completing work that has little or no effect<br />
on the software engineering practitioners that use <strong>and</strong> implement research output. In their paper on<br />
the teaching of EBSE Jrgensen et. al. state<br />
“We cannot claim that we have demonstrated that teaching EBSE has a significant<br />
positive effect on real world software development work.... ....There are no scientific<br />
studies on the effects of EBSE. The empirical evidence regarding its effectiveness is<br />
constituted only by our own practice....” (Jorgensen 2005)<br />
They argue that by analogy to medical sciences, teaching of EBSE techniques should have a small<br />
but positive impact on the quality of software engineering practice. This may or may not be true;<br />
however, it is not an argument for producing EBSE reviews as inputs into professional decision<br />
making. There is a significant difference between a professional engineer underst<strong>and</strong>ing the concepts<br />
of EBSE <strong>and</strong> performing systematic reviews when faced with a complex decision <strong>and</strong> the same<br />
engineer accepting the findings of externally produced reviews. We argue that medical science faces<br />
the same issues. In the UK this has been addressed by the formation of the National Institute for<br />
Clinical Excellence. This statutory body is embarking on a process of m<strong>and</strong>ating practice according to<br />
fixed guidelines <strong>and</strong> is forcing the adoption of systematic review findings.<br />
Without a statutory body to enforce the adoption of findings it is necessary to underst<strong>and</strong> the power of<br />
EBSE to affect practice. In particular we wish to know if systematic reviews have the ability to affect<br />
practice. If not, should we concentrate our efforts in teaching the general techniques to engineers <strong>and</strong><br />
allow them to perform their own analysis.<br />
There are many complex issues to address in this area. This paper describes a protocol we have<br />
adopted to measure the effectiveness of a systematic literature review in affecting the opinion,<br />
confidence level <strong>and</strong> plans of decision makers within the UK Ministry of Defence (UK MoD).<br />
The hypotheses for our research questions are as follows:<br />
Exposure to a systematic review has the power to change the opinion of knowledgeable<br />
participants.<br />
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Systematic reviews produce a narrower range of opinion than those formed by participants only<br />
exposed to primary material.<br />
Exposure to a professionally completed systematic review increases the perceived confidence<br />
participants have in their opinions.<br />
2. Experimental protocol<br />
We use a modern <strong>and</strong> much discussed proposal in software engineering as our research tool, pair<br />
programming. The concept of pair programming is that two people will share one terminal <strong>and</strong> work<br />
together to increase quality, reduce faults <strong>and</strong> depending on the research project even reduce<br />
elapsed time <strong>and</strong> total cost. We selected this topic as it is controversial, the subject of many primary<br />
studies <strong>and</strong> has been used as a topic for systematic literature review (Hannay 2009).<br />
Our experiment is a primary study that investigates the affect of the independent variable of exposure<br />
/ non-exposure to a systematic review” on the following dependant variables <strong>using</strong> a within-subjects,<br />
before <strong>and</strong> after group design:<br />
Efficacy: The participant’s opinion of the utility of pair programming.<br />
Confidence: The confidence level that the participants have in their underst<strong>and</strong>ing of pair<br />
programming.<br />
This design allows the comparison of the data from the pre-exposure measure of the dependent<br />
variables with the post-exposure measure of the dependent variables. Within group differences were<br />
controlled, allowing any change in the dependent variables to be identified.<br />
2.1 Procedure<br />
Independently <strong>and</strong> with no knowledge of this study by either the participants or the trainer, the<br />
participants were introduced to pair programming. All the background material on pair programming<br />
used by Hannay et. al. (Hannay 2009) was presented <strong>and</strong> formed the basis of a discussion on the<br />
utility of pair programming. This training is a normal part of the staff development provided by the UK<br />
MoD <strong>and</strong> was presented by a leading exponent of pair programming.<br />
Fourteen days after the initial training the participants were asked to complete a questionnaire which<br />
provided a measure of their opinions on pair programming. The participants were also asked to rate<br />
how confident they were in the responses they had given in the questionnaire.<br />
The participants were then introduced to the concepts of EBSE <strong>and</strong> systematic review. As part of this<br />
introduction several concepts were revisited, including pair programming. The participants were asked<br />
to review the way they had formed their initial opinions by rating their level of confidence in their<br />
responses to items in the questionnaire used earlier.<br />
During the last stage, the participants were exposed to a professionally completed systematic<br />
literature review (Hannay 2009) <strong>and</strong> it’s findings were analysed <strong>and</strong> discussed. The questionnaire<br />
completed during the initial participant training phase was re-completed, <strong>and</strong> again, as at stages two<br />
<strong>and</strong> three, the participants were asked to rate their level of confidence in their responses to the<br />
questions. Participants were asked to voluntarily submit their results to the study after the completion<br />
of the third stage of the study.<br />
The following questions form the questionnaire completed by participants:<br />
1. Is pair programming a worthwhile methodology?<br />
2. Does pair programming effect software quality?<br />
3. Does pair programming effect speed?<br />
4. Does pair programming effect costs?<br />
5. In what situation is pair programming particularly effective?<br />
6. In what situation is pair programming particularly in-effective?<br />
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Data was initially collected as h<strong>and</strong> written questionnaires <strong>and</strong> collected so that the participants were<br />
not aware of the study during its operation, but they become fully informed before agreeing to submit<br />
their results. Answers submitted by participants were coded so that it was not possible to identify<br />
individuals or to identify which subjects declined to include their results. A nine point likert scale was<br />
used for answers to all questions except 5 <strong>and</strong> 6 which have free form answers. An Independent<br />
analysis committee, blind to the hypotheses, performed a thematic analysis of the free form answers.<br />
The categories were then mapped to nine point likert scale answers by subject experts who were<br />
asked to score each category as indicative of an answer to the question “Is pair programming a<br />
worthwhile methodology?. Most of the themes were scored remarkably consistently by the expert<br />
panel as indicated by very low st<strong>and</strong>ard deviations. Where there was no consistent opinion of the<br />
meaning of a category, indicated by a st<strong>and</strong>ard deviation of above 1.5, the answers falling into this<br />
category were removed from the study.<br />
The following dependant variables were derived from the data gathered.<br />
Efficacy: The expressed opinion on the efficacy of pair programming as a technology. Calculated<br />
as the average likert score from questions 1 to 6. In the open questions (5 <strong>and</strong> 6) the Likert<br />
scores were derived by the thematic analysis <strong>and</strong> independent analysis.<br />
Confidence: The expressed confidence, on the same 9 point likert scale, of the validity of the<br />
subjects answers.<br />
Intent: The expressed intent to deploy pair programming on the projects or programme for which<br />
the subject is responsible. Responses are on the 9 point likert scale. Where no response was<br />
given then the subject was omitted from the study for the elements that require this variable.<br />
2.2 Data analysis procedures<br />
In this section we detail our approach to analysing our data in preparation for <strong>and</strong> demonstrate how<br />
this data is used to answer our research hypotheses. The overall analysis procedure was to use<br />
statistical bootstrapping techniques to calculate the probability that the data sets gathered before <strong>and</strong><br />
after exposure to systematic reviews were from different populations. This class of statistical resampling<br />
techniques provides a robust method of evaluating the statistical significance of any<br />
changes to the variables in the before <strong>and</strong> after populations.<br />
2.2.1 Hypothesis 1: Exposure to a systematic review will change the opinion of knowledgeable<br />
participants<br />
In this question we are looking at the population of subjects. We wish to know if exposure to a<br />
systematic review has the power to change the opinion of the group by a measurable, significant<br />
amount. In this question we are dealing with perceived efficacy <strong>and</strong> confidence. I.e. we see a change<br />
of efficacy <strong>and</strong> confidence as equally important.<br />
Expressed <strong>and</strong> true efficacy values are assumed to differ according to a st<strong>and</strong>ard distribution, with the<br />
expressed value at the centre of the distribution <strong>and</strong> the confidence related to the deviation. The<br />
distributions are calculated <strong>using</strong> the probability density function for a st<strong>and</strong>ard distribution,<br />
normalised such that the probability falling in the likert range (1-9) is 1. Table 1 <strong>and</strong> Figure 1 set out<br />
the st<strong>and</strong>ard deviations used for each expressed certainty.<br />
The probability distributions of a population of participants can be summed to produce a graph<br />
representative of the whole population. Each of the individual graphs has an area under the curve of<br />
1, summing n graphs gives a “probability distribution curve” representative of n answers with an area<br />
under the graph of n. Given 2 ”population curves” <strong>and</strong> integrating the absolute distances between<br />
them over the valid likert responses gives a distance between the populations as required by the<br />
statistical resampling.<br />
This technique has several major advantages. Two participants giving expressed efficacies of 5 <strong>and</strong> 6<br />
will be much closer than responses of 1 <strong>and</strong> 9. A straight histogram would show them as equally<br />
distant. It also quantifies the difference between efficacies of 5 expressed at different confidences.<br />
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2.2.2 Hypothesis 2: Systematic reviews produce a narrower range of opinion than those formed by<br />
participants only exposed to primary material<br />
If exposure to a systematic review had an effect on opinion <strong>and</strong> more specifically that the opinions of<br />
participants become more consistent is tested. This prediction is based on the premise that if the<br />
participants find the evidential basis of a formalised review compelling then their opinions should<br />
migrate toward the findings of that review <strong>and</strong> thus become more consistent.<br />
Again the boot strapping approach is used in the analysis of this data. However in answering this<br />
question instead of looking at the absolute differences between the graphs we compare several<br />
measures of statistical deviation ( St<strong>and</strong>ard deviation, Average deviation <strong>and</strong> Median average<br />
deviation). The distance measure being the sum of these deviation measures.<br />
2.2.3 Hypothesis 3: Exposure to a professionally completed systematic review increases the<br />
perceived confidence participants have in their opinions<br />
This hypothesis relates to the effect of a systematic review on the strength of opinion <strong>and</strong> tests<br />
whether participants are more confident in their opinions after viewing a systematic review. I.e. Is the<br />
population of confidences after exposure to a systematic review different to the population of<br />
confidences before exposure? The data collated to test this hypothesis is prepared <strong>and</strong> analysed<br />
<strong>using</strong> the same boot strapping techniques, but applied solely to the expressed confidences. In this<br />
case the distance measure is the same three measures of statistical deviation but applied only to the<br />
expressed confidence.<br />
Table 1: The st<strong>and</strong>ard deviations implied by expressed certainties<br />
Expressed<br />
certainty<br />
1<br />
2<br />
3<br />
4<br />
5<br />
6<br />
7<br />
8<br />
9<br />
Implied normalised<br />
st<strong>and</strong>ard deviation<br />
2.997<br />
1.347<br />
0.605<br />
0.272<br />
0.122<br />
0.055<br />
0.025<br />
0.011<br />
0.005<br />
Implied st<strong>and</strong>ard deviation<br />
over 9 point<br />
likert scale<br />
26.97<br />
12.12<br />
Figure 1: The probability density functions for an estimate of 5 based on expressed certainties of 4 for<br />
the flattest curve up to 8 for the steepest curve, certainties of 1 to 3 are not shown as they<br />
are indistinguishable from 4, 9 is also omitted as it is functionally equivalent to 8<br />
151<br />
5.45<br />
2.45<br />
1.10<br />
0.49<br />
0.22<br />
0.10<br />
0.04
3. Results<br />
Graham Fletcher <strong>and</strong> Marie Cahillane<br />
The results section follows the methodology as detailed above. 51 subjects followed the protocol in 3<br />
groups. 4 Subjects declined to be included in the study, leaving 47 data sets to be analysed. In some<br />
instances questions were not answered or marked as “not applicable” by the subjects. Where this has<br />
reduced the sample size for a calculation this has been noted in the results below.<br />
3.1 Thematic analysis of open questions<br />
Two of the questions on the surveys were open:<br />
5) In what situation is pair programming particularly effective?<br />
6) In what situation is pair programming particularly in-effective?<br />
Independent experts were used, firstly to define classes of answers <strong>and</strong> then to assign the quantative<br />
answers to these classes. The classes were derived independently of the question for which the<br />
answer was given. A further <strong>and</strong> mutually exclusive set of experts assigned scores on the 9 point<br />
likert scale for each of these classes for both of the open questions. The classes <strong>and</strong> the number of<br />
answers in each class, mean <strong>and</strong> st<strong>and</strong>ard deviation for the likert score assigned to each score are<br />
shown in table 2. We applied a st<strong>and</strong>ard deviation threshold of 1.5 amongst the opinion of the<br />
experts, answers falling into these categories were substituted by the likert score from table 2. Other<br />
answers were not included in the analysis as there was no consensus as to their meaning amongst<br />
the expert panel.<br />
Table 2: The results of the thematic analysis of the open questions<br />
Question 5 Question 6<br />
Mean Std. Dev. Mean Std. Dev.<br />
Middle Sized projects 6.46 2.67 2.02 3.92<br />
No Cost Overhead 5.18 3.22 4.14 2.02<br />
High end 8.01 1.02 3.09 0.80<br />
Outline requirements 7.34 0.82 5.40 1.99<br />
Rapid development 8.82 0.92 4.51 1.60<br />
Small groups of experienced programmers 3.71 1.34 5.34 2.90<br />
Inexperienced programmers 2.66 0.93 4.71 2.04<br />
Low complexity systems 6.00 3.39 6.02 1.88<br />
High complexity systems 7.10 1.62 7.83 2.89<br />
Large systems 8.91 0.81 1.80 0.62<br />
High requirement of success 6.02 2.02 3.90 1.04<br />
Complex unknown team 2.00 2.99 2.07 3.99<br />
Simple problem 1.04 .040 5.17 1.80<br />
Most situations 9.00 0.00 1.00 0.00<br />
3.2 Questionnaire data<br />
Table 3 shows the average <strong>and</strong> st<strong>and</strong>ard deviation for the answers to questions 1 to 4 <strong>and</strong> for the<br />
scores derived from the open questions. Figure 1 shows the same data, but here it had been<br />
converted into probability distribution curves <strong>using</strong> the methodology discussed in section 2.2.1.<br />
Table 3: Mean <strong>and</strong> st<strong>and</strong>ard deviation for the answers to the questionnaire<br />
After Study Before Study<br />
Mean Std. Dev. Mean Std. Dev.<br />
1 7.10 1.59 7.15 1.32<br />
2 7.20 1.54 7.54 1.29<br />
3 6.72 1.90 6.00 2.19<br />
4 5.4.3218 1.56 5.18 2.82<br />
5 & 6 6.63 2.11 5.12 2.19<br />
Confidence 6.18 1.40 3.90 1.64<br />
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Figure 2: The sum of the probability distributions for the before <strong>and</strong> after data sets, the grey area<br />
highlights the difference or “distance” measure used in the statistical bootstrapping<br />
analysis, the x axis is each of the possible questionnaire answers in likert form, the y axis<br />
is the sum of the probability distribution curves for each participant<br />
Figure 3: Probability distributions for one example of data sets created by r<strong>and</strong>om mixing as required<br />
by the statistical boot strapping analysis, the grey area highlights the difference or<br />
“distance”, the x axis is each of the possible questionnaire answers in likert form, the y axis<br />
is the sum of the probability distribution curves for each participant<br />
3.2.1 Hypothesis 1: Exposure to a systematic review will change the opinion of knowledgeable<br />
participants.<br />
The data gathered when investigating this hypothesis falls into two populations, before <strong>and</strong> after. The<br />
null hypothesis is that these populations are subsets of the same population. I.e. that exposure to the<br />
study has not changed opinion.<br />
The efficacy <strong>and</strong> confidence were calculated for each subject, both before <strong>and</strong> after the study. These<br />
values were used to produce a probability distribution curve representative of the 2 populations.<br />
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Figure 2 shows the curves <strong>and</strong> highlights the difference or distance between them which is used in<br />
the bootstrapping analysis.<br />
100,000 r<strong>and</strong>om mixings of the two populations were tested. In each case probability distribution<br />
curves representative of the two r<strong>and</strong>om populations were calculated <strong>and</strong> their distance measured.<br />
Figure 3 shows once such measure between two r<strong>and</strong>om mixings of the before <strong>and</strong> after populations.<br />
3804 of these r<strong>and</strong>om mixings gave distance in excess of the one measured. Therefore, if the null<br />
hypothesis were true we would have expected to see an answer as extreme as the one we derived<br />
3.804% of the time.<br />
The null hypothesis associated with hypothesis 1 is shown to be false with a P value of 0.038,<br />
providing good evidence for accepting hypothesis 1 as true.<br />
3.2.2 Hypothesis 2: Systematic reviews produce a narrower range of opinion than those formed by<br />
participants only exposed to primary material.<br />
The calculated efficacies of the before <strong>and</strong> after populations were used to test the null hypothesis,<br />
that “Exposure to the study does not cause a narrowing of opinion”. The fall in st<strong>and</strong>ard deviation,<br />
average deviation <strong>and</strong> median average deviation was measured between the two populations.<br />
100,000 r<strong>and</strong>om mixings of the two populations where then measured <strong>and</strong> any fall in st<strong>and</strong>ard<br />
deviation, average deviation <strong>and</strong> median average deviation recorded. Of the 300,000 measurements<br />
82952 recoded a fall greater than the ones between the original populations. Therefore, if the null<br />
hypothesis were true we would have expected to see an answer as extreme at the one we derived<br />
27.65% of the time.<br />
The experiment provides little evidence for the null hypothesis <strong>and</strong> no indication for the validity of<br />
hypothesis 2.<br />
3.2.3 Hypothesis 3: Exposure to a professionally completed systematic review increases the<br />
perceived confidence<br />
The confidence of the participants in the before <strong>and</strong> after populations were used to evaluate the null<br />
hypothesis, that “Exposure to the study does not cause confidence to rise”. The rise in mean, median<br />
<strong>and</strong> mode of the expressed confidence was measured between the two populations. 100,000 r<strong>and</strong>om<br />
mixings of the two populations where then measured <strong>and</strong> any raise in mean, median <strong>and</strong> mode<br />
recorded. Of the 300,000 measurements 2907 recoded a rise greater than the ones between the<br />
original populations. Therefore, if the null hypothesis were true we would have expected to see an<br />
answer as extreme as the one we derived 0.96% of the time.<br />
The null hypothesis associated with hypothesis 3 is shown to be false with a P value of 0.01,<br />
providing excellent evidence for the assumption that hypothesis 3 is true.<br />
4. Discussion<br />
This paper reports an experiment that investigated the effects of exposing practicing engineers to<br />
evidence based literature reviews. We want to underst<strong>and</strong> if these reviews have the power to effect<br />
practice without their findings being m<strong>and</strong>ated. Work in the medical sciences has shown that there is<br />
a small, but positive effect (Antman 1992) <strong>and</strong> researchers in EBSE have argued that there should be<br />
a similar change for practising software engineers. It could even be argued that the effects should be<br />
stronger in this field. EBSE is a method for constructing an argument based on evidence derived from<br />
primary studies. Computer scientists <strong>and</strong> software engineers have training that is highly logical <strong>and</strong><br />
the discipline attracts people with a logical thought process. Shouldn’t the logic of EBSE be more<br />
attractive <strong>and</strong> therefore have more effect on the discipline’s practitioners?<br />
Our goal is to underst<strong>and</strong> if practice is changed. To address this question directly would take a<br />
longitudinal study where we investigate the outcomes of projects <strong>and</strong> the long term adoption or<br />
rejection of the findings of studies. Here we meet probably the most complex issue faced by EBSE,<br />
the lack of repeatable projects to trial our ideas. Unlike medicine, the software industry has a relatively<br />
small number of large projects, which makes the statistical analysis <strong>and</strong> double blind trial<br />
methodology impossible. Without the ability to directly test our objective, we approach the next best<br />
question; does EBSE effect opinion? The assumption that we are making is that if opinion is effected<br />
then practice will be effected when these engineers return to their projects. One future line of enquiry<br />
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will be to look for differences in adoption of technologies between groups that received the EBSE<br />
training <strong>and</strong> those that did not. However, we hold a low expectation that sufficient subjects will be<br />
available to produce a statistical significant result.<br />
The discussion is split into two sections, a discussion of the result <strong>and</strong> one on the methodology. We<br />
believe that both are novel <strong>and</strong> warrant a detailed analysis.<br />
4.1 Discussion on results<br />
Our experiments provide excellent evidence that systematic reviews have the power to change<br />
opinion, even amongst mid career engineers who have already been fully briefed on the technologies<br />
being discussed in the review. Anecdotally, the subjects referred to the systematic review as neutral<br />
rather than as partisan. It was this neutrality <strong>and</strong> the logical laying out of the evidence in both<br />
directions that was appealing, rather than the statistical analysis performed by the EBSE authors.<br />
While a positive result, the feedback brings into question the value of the EBSE study. It appears to<br />
have been received more as a laying out of the evidence than as an objective analysis. However,<br />
there is little doubt that the opinions were effected by the EBSE study, which validates the efforts of<br />
the software engineering community to produce these studies.<br />
The experiment also showed that exposure to the EBSE study made a large impact on the confidence<br />
of the participants in their own underst<strong>and</strong>ing. We believe that this is a major outcome of both the<br />
EBSE studies <strong>and</strong> this experiment. While very few peoples opinion moved hugely, many people<br />
become confident in their underst<strong>and</strong>ing to the point where their ability <strong>and</strong> willingness to adopt the<br />
technologies reached a threshold level. Again, in feedback after the last phase of the project, several<br />
participants commented that they understood the opinion of the research community before the study,<br />
that their initial training had delivered the facts. But, that the EBSE work had reinforced their<br />
conclusions <strong>and</strong> bolstered their confidence to the point where they now planned to attempt to use it<br />
rather than consider the technology as another ”academic idea with little real life relevance”<br />
We also expected the study to show that opinion narrowed as a result of the study. I.e. that everybody<br />
would move closer to the conclusions of the study. However, we were surprised that this did not<br />
appear to be the case. The graphs showed that prior to the study there was a uni-modal distribution to<br />
the opinion, largely driven by the low levels of confidence. After the study opinion had hardened <strong>and</strong><br />
became bi-modal in distribution. On reflection there are several reasons that could explain this. Firstly,<br />
pair programming is a hotly debated technique <strong>and</strong> all opinion is divided. Even the systematic review<br />
does not give a definitive answer. Secondly, we believe that, the subjects fell into two categories,<br />
people who see pair programming as a useful tool but not relevant to their projects <strong>and</strong> those that see<br />
it as directly relevant to their projects. Either or both of these reasons could account for the lack of a<br />
narrowing of opinion.<br />
4.2 Discussion on method<br />
The methods we have adopted in analysing our findings bears some discussion. The use of Likert<br />
scales in questionnaires is a common technique when measuring opinion <strong>and</strong> attitudes (Dawes<br />
2008). Neuman argues that its popularity may be due to the ease in which these scales are<br />
developed (Neuman 1994) <strong>and</strong> a body of research which has demonstrated that these scales tend to<br />
be more reliable than some other scales with the same number of items. However, in the present<br />
study we were interested in the confidence that participants had when expressing their answers in<br />
terms of how certain they were of the answers expressed. To our knowledge there is no work<br />
available within the field of psychology that provides a model of how confidence in people’s answers<br />
to questions can be represented. That is, we could find no model that integrated a representation of<br />
certainty into a test that could be applied to a hypothesis. As a result we have developed our own<br />
model of confidence <strong>and</strong> built the analysis of our findings around it.<br />
The finding of most interest here is that on a nine point scale the participants were really working on<br />
at most five points. Responses given in the range of one to four were functionally equivalent, in that<br />
there was little discrimination between the possible values <strong>and</strong> this was also the case for responses of<br />
eight <strong>and</strong> nine on a nine-point scale. Therefore, it is not clear what the difference is between a<br />
participant giving 8/9 or 9/9 as an expressed level of confidence. Though this was only when<br />
expressing confidence, this could call into question research whose experimental basis is the analysis<br />
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of data captured <strong>using</strong> Likert scales. These numerical scales represent one type of response scale.<br />
Also common are scales that use only verbal anchors. The findings suggest that the adoption of a<br />
Likert scale with a smaller range of numerical responses i.e. a five-point or seven-point scale may be<br />
more reliable in measuring efficacy, where each value along the scale is mapped onto a single verbal<br />
response. For example, a scale of one to five may reflect Strongly agree (1), agree (2), neither agree<br />
nor disagree (3), disagree (4) <strong>and</strong> strongly disagree (5).<br />
5. Conclusions<br />
Kitchenham et. al. stated in a very early paper introducing EBSE that systematic review should be<br />
quickly adopted within software engineering (Kitchenham 2004) . Jrgensen et. al. agreed (Jorgensen<br />
2005), but admit that while evidence based science has been shown to improve outcomes in<br />
medicine, there is no direct evidence for its effects in software engineering. This paper has shown that<br />
EBSE does have a real <strong>and</strong> measurable effect on practicing engineers.<br />
Our conclusions can be summarised as follows:<br />
Showing a systematic review to an experienced engineer can change their opinion, even if they<br />
have direct experience <strong>and</strong> training on the subject of the review.<br />
Reviews mostly change opinion by improving confidence in the subjects rather by making large<br />
changes to their base opinion. This then supports the engineer in adopting or rejecting the<br />
technology in an active manner.<br />
References<br />
Antman, E.M., Lau,J., Kupelnick,B., Mosteller,F. <strong>and</strong> Chalmers,T.C. (1992) A comparison of results of metaanalysis<br />
of r<strong>and</strong>omized controlled trials <strong>and</strong> recommendations of clinical experts. JAMA-Journal of the<br />
American Medical Association, 268:240–248.<br />
Dawes,J. (2008) Do data characteristics change according to the number of scale points used? an experiment<br />
<strong>using</strong> 5-point, 7-point <strong>and</strong> 10-point scales. International journal of Marke Research, 50(1).<br />
Hannay,J.E., Dyb,T., Arisholm,E., <strong>and</strong> Sjberg,D.I.K.(2009). The effectiveness of pair programming: A metaanalysis.<br />
<strong>Information</strong> <strong>and</strong> Software Technology, 51(7):1110 – 1122. Special Section: Software Engineering<br />
for Secure Systems.<br />
Jorgensen,M., Dybo,T., <strong>and</strong> Kitchenham,B. (2005) Teaching evidence-based software engineering to university<br />
students. Software Metrics, IEEE International Symposium on, 0:24.<br />
Kitchenham, B., Brereton,O.P., Budgen, D., Turner, M., Bailey,J., <strong>and</strong> Linkman,S. (2009) Systematic literature<br />
reviews in software engineering - a systematic literature review. <strong>Information</strong> <strong>and</strong> Software Technology,<br />
51(1):7 – 15<br />
Kitchenham, B., Dyba, T. <strong>and</strong> Jorgensen,M (2004) Evidence-based software engineering. In ICSE ’04:<br />
Proceedings of the 26th International Conference on Software Engineering, pages 273–281,Washington,<br />
DC, USA. IEEE Computer Society.<br />
Neuman, W.L. (1994) Social Research Methods: Qualitive <strong>and</strong> Quantitative Approaches. USA:Allyn & Bacon.<br />
156
How Open Source Software Products: Can Support<br />
Teaching in Italian Schools<br />
Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
University of Insubria, Como, Italy<br />
chiarafriso@unicatt.it<br />
valentina.lenarduzzi<br />
davide.tabi<br />
davide.tosi]@uninsubria.it<br />
Abstract: In Italy, the adoption of modern software technologies is strongly limited by the current critical<br />
economic situation. The adoption of Open Source Software (OSS) solutions can mitigate this problem because of<br />
the nature of OSS products that helps to cut down on costs by providing modern <strong>and</strong> flexible products. However,<br />
very often school managers <strong>and</strong> teachers are unaware about the availability of powerful OSS tools that can<br />
support teachers <strong>and</strong> school managers in their daily work. In this paper we provide a literature survey about the<br />
available experiences <strong>and</strong> projects on the adoption of OSS solutions started in Italian schools <strong>and</strong> we list a set of<br />
available OSS digital class rolls already experimented in Italian schools. The two surveys aim at suggesting how<br />
to start new projects avoiding common risks <strong>and</strong> how to exploit the potentialities of OSS solutions for didactical<br />
purposes. In this paper, we also qualitatively assess the listed OSS class rolls with our OP2A methodology in<br />
order to suggest which tool is the best choice for the adoption.<br />
Keywords: open source software, primary schools, high level schools, systematic survey, OP2A, OSS quality,<br />
OSS trustworthiness, digital class rolls<br />
1. Introduction<br />
The current critical economic situation in Italy is impacting on how primary <strong>and</strong> high-level schools can<br />
exploit the usage of software <strong>and</strong> modern technologies to support both teaching <strong>and</strong> internal<br />
administration <strong>and</strong> management. This can stimulate schools to evaluate the potentialities provided by<br />
Open Source Software (OSS) solutions because of the nature of OSS products that helps to cut down<br />
on costs by providing modern <strong>and</strong> flexible products. However, the vast majority of school managers<br />
<strong>and</strong> teachers can face with three types of problems: the first one is related to the school managers<br />
<strong>and</strong> teachers’ unawareness about OSS solutions; the second one is related to the reluctancy normal<br />
people have about OSS products, due to the wrong idea that they may have on the quality of OSS<br />
products; the last one refers to the difficulties in choosing the best solution that fits specific<br />
requirements.<br />
The usage <strong>and</strong> adoption of ICT technologies in Italian schools is very poor. In a survey conducted by<br />
the Italian Osservatorio TEcnologico (OTE) in 2005, the number of schools that adopted a Linux<br />
distribution for their personal computers was limited to 1000 (Battistoni, 2008). If compared to the total<br />
number of Italian schools (at the time of writing, 60000), the ratio is worrying. Moreover, projects<br />
about the adoption of new software technologies are not systematic <strong>and</strong> come from the rare initiative<br />
of teachers that are privately interested in technologies (Battistoni, 2008). The Regione Autonoma<br />
Valle d’Aosta <strong>and</strong> the Provincia di Bolzano are two exceptions in Italy (Rossi et al., 2006). These<br />
realities started two pioneer projects to completely migrate their schools from proprietary software to<br />
OSS solutions (FUSS, 2005).<br />
Unfortunately, the vast majority of Italian schools do not have the economical possibility to invest in<br />
the adoption of new software solutions. However, a plethora of OSS solutions, which can support<br />
managers, teachers <strong>and</strong> students in the educational work, are currently available online for free. For<br />
example, a quick look at the web portal www.sourceforge.net can confirm this statement: the portal<br />
lists more than 450 OSS projects related to education.<br />
This paper tries to help school managers <strong>and</strong> teachers to underst<strong>and</strong> how OSS solutions can actually<br />
improve their management <strong>and</strong> teaching activities <strong>and</strong> suggests a set of OSS products for their daily<br />
work. The paper provides a survey on how OSS is used in some Italian schools to report on success<br />
stories <strong>and</strong> to suggest how to adopt successfully OSS avoiding critical risks. The paper gives a review<br />
about past <strong>and</strong> still active Italian projects on the adoption of OSS products. The survey has been<br />
conducted by investigating <strong>and</strong> analyzing both projects with the purpose of developing OSS products<br />
specifically designed for schools, <strong>and</strong> also experiences in adopting OSS products.<br />
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Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
Moreover, the paper provides an investigation on a set of available OSS products for digital class<br />
rolls. The paper reports on the Italian laws that regulate the usage of digital class rolls <strong>and</strong> describes<br />
the most interesting <strong>and</strong> wide adopted solutions <strong>and</strong> their characteristics. The identified OSS<br />
solutions are also analyzed to highlight points in favor <strong>and</strong> points against in their adoption.<br />
These OSS products have been quantitatively evaluated by following the requirements <strong>and</strong><br />
indications provided by the Open source Product Portal Assessment (OP2A) model (Basilico et al.,<br />
2011). OP2A is a model for assessing the quality of web portals that publish OSS products. OP2A<br />
can be used as the starting point for certifying objectively the quality of OSS products. The model is<br />
built upon the results of a survey that the authors of this paper conducted in the context of the<br />
European project QualiPSo carried out to (1) identify the factors most commonly used to assess the<br />
trustworthiness <strong>and</strong> the quality of an OSS product, <strong>and</strong> (2) underst<strong>and</strong> the reasons <strong>and</strong> motivations<br />
that lead software users to adopt or reject OSS products. In this way, we are able to assess<br />
objectively the quality level of the analyzed OSS products, thus suggesting popular <strong>and</strong> also trusted<br />
OSS solutions for schools.<br />
2. Experiences <strong>and</strong> projects in adopting OSS in Italian schools<br />
In this section, we report on some experiences <strong>and</strong> projects about the adoption of OSS solutions in<br />
Italian schools with the aim of stimulating teachers <strong>and</strong> school managers in starting new projects<br />
related to OSS.<br />
2.1 Planning the survey<br />
We followed a systematic literature review (Biolchini et al., 2007) to survey the projects <strong>and</strong> the<br />
experiences about the adoption of OSS solutions in Italian schools. In this paper for space reason, we<br />
do not formally describe the steps we followed during the systematic review, but we describe only the<br />
objective of the survey, the research questions we wished to answer, the search strings <strong>and</strong> criteria<br />
we used, the electronic sources we surveyed, <strong>and</strong> the dimensions used to classify the primary<br />
studies.<br />
The survey was planned with the aim of identifying meaningful projects <strong>and</strong> experiences about the<br />
adoption of OSS solutions in Italian schools. This objective led us to define a set of questions that we<br />
hope answer throughout the survey:<br />
Q1: are projects <strong>and</strong> experiences available in Italian schools?<br />
Q2: are the identified projects <strong>and</strong> experiences collaborative or limited to single schools?<br />
Q3: are the identified projects <strong>and</strong> experiences a good starting point for other projects?<br />
The survey has been conducted <strong>using</strong> the following search strings <strong>and</strong> criteria:<br />
Open source <strong>and</strong> Italian schools<br />
Didactics <strong>and</strong> open source software<br />
Experiences open source for Italian schools<br />
Projects open source for Italian schools<br />
Open source Italian schools<br />
OSS <strong>and</strong> floss for Italian schools<br />
We used both keywords in English <strong>and</strong> also in Italian, <strong>and</strong> we manipulated the strings with logical<br />
operators (<strong>and</strong>, or).<br />
We used the following electronic resources:<br />
Search engines (such as google <strong>and</strong> yahoo)<br />
sourceforge (www.sourceforge.net) <strong>and</strong> schoolforge (www.schoolforge.net)<br />
OW2 (www.ow2.org)<br />
osor (www.osor.eu)<br />
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Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
ote (www.osservatoriotecnologico.eu)<br />
indire (www.indire.it)<br />
dienneti (www.dienneti.it)<br />
lpi (http://scuola.lpi-italia.org)<br />
dschola (www.dschola.it)<br />
In order to answer the previous questions, we identified a set of inclusion <strong>and</strong> exclusion criteria <strong>and</strong> a<br />
set of dimensions for the classification. The inclusion <strong>and</strong> exclusion criteria were defined in order to<br />
filter properly the whole set of projects <strong>and</strong> experiences identified during the first round of search. With<br />
relation to the projects, we decided to include in our primary set of results only:<br />
Projects with a specific didactic-pedagogical merit started with the precise aim to use OSS<br />
solutions for teaching <strong>and</strong> learning purposes;<br />
Projects designed not only from the technological but also from the didactic point of view,<br />
Projects still active, with a well-defined methodology that makes the experience reproducible;<br />
We excluded from our set, all the projects that, even though largely spread <strong>and</strong> supported by<br />
outst<strong>and</strong>ing partners, lack a specific didactic finality, but aim only at projects encouraging the<br />
spreading of OSS in schools.<br />
We considered five dimensions for the analysis of each project: 1) description; 2) objectives; 3)<br />
solutions provided; 4) methodology followed; 5) schools involved.<br />
As for experiences we decided to include in our primary set of results only: experiences of schools<br />
that have decided to introduce OSS in class not only for economical or practical purposes, but for<br />
educational reasons; traceable online experiences. We considered four dimensions for the analysis of<br />
each experience: 1) description; 2) solutions; 3) methodology; 4) evaluation.<br />
2.2 Survey results<br />
The survey has been conducted with the search criteria <strong>and</strong> by querying the electronic resources<br />
identified in Section 2.1. After these steps, we retrieved 13 OSS projects <strong>and</strong> 14 experiences. We<br />
then reduced the number of the identified OSS projects from 13 to 3 primary projects <strong>and</strong> the number<br />
of OSS experiences from 14 to 3 primary experiences, by applying the inclusion <strong>and</strong> exclusion criteria<br />
of Section 2.1. Table 1 summarizes the primary set of projects <strong>and</strong> experiences identified during our<br />
survey <strong>and</strong> the dimensions of the analysis.<br />
The results of the survey suggest that a limited number of projects <strong>and</strong> experiences is available for<br />
Italian schools. The reported projects <strong>and</strong> experiences involve several schools in a collaborative<br />
manner <strong>and</strong>, due to the popularity <strong>and</strong> the positive results they achieved, can be used as starting<br />
point for other initiatives.<br />
3. A survey of OSS digital class rolls for schools<br />
In this section, we survey some specific OSS tools that replace traditional paper class rolls <strong>and</strong> school<br />
registers.<br />
The first tedious task a teacher must accomplish every morning in his/her class is to fill-in the class<br />
roll. In the last few years, some Italian schools are experimenting the use of digital class rolls instead<br />
of traditional paper class rolls in order to speed-up <strong>and</strong> simplify the fill-in task, to reduce the amount of<br />
paper waste, <strong>and</strong> to minimize the waste of space taken by archives.<br />
The Italian law regulates the usage <strong>and</strong> adoption of digital supports. Specifically, the D. Lgs. n. 59<br />
Article 15 Paragraph 2 (March 15, 1997) defines the official validity of digital documents for private<br />
users <strong>and</strong> for public administrations. The DPR n. 381 (July 28, 1999) regulates what was introduced<br />
in the D. Lgs. n. 59 by defining how to manipulate private <strong>and</strong> sensible data. Following these law <strong>and</strong><br />
decree, other decrees have been released during the last years, such as the DPR n. 428 (October 20,<br />
1998), the DPCM (October 31, 2000), the DL n.196 (June 30, 2003), <strong>and</strong> the CNIPA resolution<br />
(February 19, 2004).<br />
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Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
The digital class roll provides a lot of advantages such as the possibility of:<br />
Cataloging data year by year or month by month following specific criteria defined by the teacher;<br />
Filling-in the class roll outside the school schedule;<br />
Updating or modifying data in case of typos or compilation errors immediately;<br />
Saving data quickly <strong>and</strong> searching information by keywords or by specific filtering criteria;<br />
Customizing the area of the class roll, for example differentiating the area for marks from the one<br />
for didactical activities.<br />
Currently, the reference closed-source tool for digital class rolls in Italy is the Silente Registro<br />
Elettronico (URL: http://silente.trendcom.it/) developed by TrendCom <strong>and</strong> sponsored by MIUR. Silente<br />
is a SaaS (Software as a Service) tool that provides abilities for managing class rolls <strong>and</strong> registers in<br />
a digital way, for monitoring school activities, <strong>and</strong> informing students, parents <strong>and</strong> teachers about<br />
students’ absences, marks, advices, <strong>and</strong> meetings. Unfortunately, Silente costs 900,00 euros for the<br />
version limited to 5 classes (with a renewal subscription of 250,00 euros per year) or 2800,00 euros<br />
for the version without restrictions (with a renewal subscription of 600,00 euros per year). These<br />
prices can have a real impact on the financial budget of the Italian public schools, thus pushing OSS<br />
developers into developing equivalent OSS solutions.<br />
Table 1: Description of the primary set of projects <strong>and</strong> experiences on OSS adoptions<br />
1) Project Name: Cinema at School (URL: www.g-raffa.eu/Cinema_a_Scuola)<br />
Description: the project started in 2006 to make one-reelers <strong>and</strong> short films in the primary school starting from<br />
the storyline, production, <strong>and</strong> also post-production. All the phases have been implemented <strong>using</strong> open source<br />
software solutions <strong>and</strong> the films are released under the Creative Commons BY-NC-SA 2.5 Italia license.<br />
Objectives: in addition to didactical <strong>and</strong> educational objectives, the project aims at make aware students <strong>and</strong><br />
parents about the potentialities offered by free <strong>and</strong> open source software solutions.<br />
Solutions: the project does not implement <strong>and</strong> develop new solutions or software but exploits the Operating<br />
System GNU/Linux Ubuntu, Luciole (http://festival.inattendu.org/Luciole-Linux) <strong>and</strong> Stopmotion<br />
(http://stopmotion.bjoernen.com/) to create animation movies, CinelerraCV (http://cinelerra.org/) for video<br />
editing, <strong>and</strong> ZYnAddSubFX (http://zynaddsubfx.sourceforge.net/), Rosegarden (www.rosegardenmusic.com/)<br />
<strong>and</strong> Audacity (http://audacity.sourceforge.net/) for audio editing.<br />
Methodology: the project is based on a well-defined methodology that describes all the activities <strong>and</strong> phases<br />
of the project, thus simplifying the reproducibility of the experience. The main phases are: identification of<br />
Open Source Software solutions able to support video/audio pre- <strong>and</strong> post-production; hardware <strong>and</strong><br />
computers adaptation to support complex <strong>and</strong> resource-consuming operations; teachers training about these<br />
software solutions.<br />
Schools Involved: Scuola Primaria "Marconi" di Roncaglia (prof. Raffaella Traniello)<br />
2) Project Name: Zoomlinux (URL: http://sodilinux.itd.cnr.it/zoomlinux)<br />
Description: the project started in 2008 for the development of a suite of didactical tools for partially sighted<br />
school-boys <strong>and</strong> girls. The suite has been developed by the CNR Technological Institute for Didactic.<br />
Objectives: develop an accessible suite of tools that can simplify the school integration of partially sighted<br />
school-boys/girls<br />
Solutions: the Zoomlinux suite, the documentation that supports teachers in installing <strong>and</strong> <strong>using</strong> the suite, <strong>and</strong><br />
a collection of didactical flyers to introduce teachers to the problem of partially sighted <strong>and</strong> blind school-boy<br />
<strong>and</strong> girl<br />
Methodology: the project is a research <strong>and</strong> development project supported by CNR <strong>and</strong> AICA. The two<br />
partners followed a rigorous methodology to achieve the goals of the project: definition of the project<br />
requirements in cooperation with teachers, students <strong>and</strong> parents; development of the suite; extensive<br />
experimentation of the suite with the ONLUS “D. Chiossone”.<br />
Schools Involved : AICA <strong>and</strong> the ONLUS “Istituto per ciechi D. Chiossone"<br />
3) Project Name: Wii4dida (URL: www.wiild.it)<br />
Description: the project started in 2010 for integrating the Linux-based Wiimote Digital Blackboard with<br />
traditional didactical methodologies. The project is supported by the Innovation, Research <strong>and</strong> ICT Department<br />
of the Provincia Autonoma di Trento.<br />
Objectives: exploit the potentialities of digital blackboards, with open source technologies <strong>and</strong> software, in<br />
primary <strong>and</strong> high-level schools<br />
Solutions: the WiiLD digital blackboard is a hardware platform that integrates a Wiimote with a PC to provide<br />
digital blackboard features. During the project, a lot of OSS tools, which support teachers <strong>and</strong> school<br />
managers, have been experimented <strong>and</strong> developed with WiiLD (e.g., python-whiteboard, Ardesia, Jarnal, Vue,<br />
Geogebra, Wxmaxima, Solfege).<br />
Methodology: the project is a research <strong>and</strong> development project supported by several schools, the Research<br />
<strong>and</strong> ICT Department of the Provincia Autonoma di Trento <strong>and</strong> the University of Trento. The partners followed a<br />
rigorous methodology to achieve the goals of the project: identify the didactical role of WiiLD; experiment<br />
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Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
WiiLD with a subset of teachers with skilled abilities in adopting technology; compare the expensive LIM<br />
(Lavagna Interattiva Multimediale) with the open source based WiiLD; identify a set of OSS tools to provide a<br />
suite that completely support teachers <strong>and</strong> school managers in their daily work; engineer <strong>and</strong> develop new<br />
OSS solutions; create a community around WiiLD.<br />
Schools Involved : 40 schools are experimenting the WiiLD<br />
1) Experience Name: Istituto Statale di Istruzione Superiore “P. Paschini” (Udine)<br />
(URL: www.paschinimarchi.it/dokuwiki/doku.php/aula_di_informatica)<br />
Description: the experience started in 2002 <strong>and</strong> it is based on the adoption of Linux OS for all the PCs of the<br />
school, not only for economical reasons but also for ethical <strong>and</strong> technological motivations (e.g., manage in a<br />
simpler way remote students’ accesses <strong>and</strong> permissions)<br />
Solutions: the adoption of the Linux Terminal Server Project (LTSP) to centralize data, accesses <strong>and</strong> software<br />
tools. A set of diskless clients are remotely connected to the server to virtually boot the Operating System.<br />
Methodology: the experience is based on the individual work of a teacher of the school. He identified the<br />
LTSP, studied the Linux OS, collaborated with an external company for the installation <strong>and</strong> configuration of the<br />
client-server network<br />
Evaluation: the promoter of the experience reports a lot of advantages <strong>and</strong> none disadvantages in the<br />
adoption of Linux.<br />
2) Experience Name: Istituto Tecnico Commerciale Statale “Odorico Mattiussi” (Pordenone)<br />
(URL: www.itcmattiussi.it, www.mattiussilab.net/content)<br />
Description: the experience started in 2001 <strong>and</strong> it is based on the adoption of several OSS solutions to<br />
support high-level students in their business course of studies, not only for economical reasons but also for the<br />
large set of OSS tools available for business people.<br />
Solutions: the adoption of a Linux distribution, the use of OpenOffice, GIMP, FireFox, gcc, netfilter, samba,<br />
squid <strong>and</strong> the apache web server; the experimentation of the Moodle e-learning platform; the development of<br />
OSS solutions to support school-managers <strong>and</strong> administrative tasks.<br />
Methodology: the experience started in an unstructured manner with the collaboration of two teachers,<br />
technical staff <strong>and</strong> some motivated students.<br />
Evaluation: the promoters of the experience reported the difficulties encountered to motivate some students in<br />
the adoption of OSS solutions.<br />
3) Experience Name: Istituto Comprensivo “G. Toniolo” (Pisa)<br />
(URL: http://ictoniolopisa.it)<br />
Description: the experience started in 2009 <strong>and</strong> it is based on the migration from the Microsoft OS to the<br />
Linux OS, not only for economical reasons but also for ethical <strong>and</strong> didactical motivations (e.g., provide a large<br />
set of tools <strong>and</strong> solutions to improve the students’ critical ability).<br />
Solutions: migration from proprietary software to OSS solutions with the adoption of a Linux distribution <strong>and</strong> a<br />
set of tools to innovate the didactic (Innovascuola).<br />
Methodology: the experience is based on a first partial migration where each PC was able to boot in dual<br />
mode (both Microsoft <strong>and</strong> Linux), followed by a total migration to Ubuntu. An external company has supported<br />
the installation <strong>and</strong> configuration of 6 new laboratories <strong>and</strong> also the training of teachers <strong>and</strong> school managers.<br />
Evaluation: the promoter of this experience reports a lot of advantages in adopting Linux <strong>and</strong> few<br />
disadvantages such as the opposition of some teachers <strong>and</strong> the huge number of hours spent after working<br />
time for conducting the experience.<br />
3.1 Planning the survey<br />
Also in this case, we followed a systematic literature review (Biolchini et al., 2007) to survey the<br />
available OSS tools for digital class rolls. The survey was planned with the aim of identifying the OSS<br />
tools developed by communities or private developers related to digital class rolls. This objective led<br />
us to define a set of questions that we hope answer throughout the survey:<br />
Q1: are OSS tools for digital rolls available?<br />
Q2: are the available OSS tools for digital rolls experimented in real domains?<br />
Q3: what kind of support can actually provide the adoption of these OSS tools?<br />
The survey has been conducted <strong>using</strong> the following search strings <strong>and</strong> criteria:<br />
Open source tools for schools<br />
Digital class rolls<br />
Digital class registers<br />
OSS <strong>and</strong> floss solutions for didactic<br />
OSS <strong>and</strong> floss solutions for schools<br />
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OSS <strong>and</strong> floss products for teaching<br />
We used both keywords in English <strong>and</strong> also in Italian, <strong>and</strong> we manipulated the strings with logical<br />
operators (<strong>and</strong>, or) <strong>and</strong> we searched the electronic resources listed in Section 2.1.<br />
In order to answer the three previous questions, we identified a set of inclusion <strong>and</strong> exclusion criteria<br />
<strong>and</strong> a set of dimensions for the classification. The inclusion <strong>and</strong> exclusion criteria were defined in<br />
order to filter properly the whole set of tools identified during the first round of search. We decided to<br />
include in our primary set of tools only the tools with the availability of the translation in Italian. We<br />
included not only OSS tools but also free tools because the availability of a lot of tools that do not<br />
need the installation of the application but they are provided online as web applications, thus they are<br />
not released with their source code. We also selected the tools characterized by an active community<br />
around the project <strong>and</strong> we discarded tools <strong>and</strong> projects that are not still alive or supported. We<br />
considered four dimensions for the analysis of each tool: 1) version <strong>and</strong> license type; 2) features<br />
provided; 3) expertise needed for its use/installation; 4) advantages/disadvantages in its adoption.<br />
3.2 Survey results<br />
The survey has been conducted with the search criteria defined in Section 3.1 <strong>and</strong> by querying the<br />
electronic resources identified in Section 2.1. After these steps, we retrieved 56 OSS tools. We then<br />
reduced the number of the identified tools from 56 to 7 primary OSS tools by applying the inclusion<br />
<strong>and</strong> exclusion criteria of Section 3.1. Table 2 lists the primary set of tools identified during our survey<br />
<strong>and</strong> summarizes for each tool the four dimensions of the analysis. Engrade is a tool that we discarded<br />
from the primary set of tools because it does not respect an inclusion criterion (i.e., it is currently<br />
available in English <strong>and</strong> does not have an Italian translation yet). In any case, we decided to also<br />
report Engrade in the primary list because of its popularity (at the time of writing, 2560751 people are<br />
members of Engrade), its maturity (available from 2003) <strong>and</strong> its provided features (gradebook,<br />
messaggining support, homework calendar, quizzes, discussions).<br />
Summarizing, we can state that, from a quantitative point of view, a good set of OSS tools for digital<br />
class rolls is available. These tools have been experimented extensively in some Italian schools <strong>and</strong><br />
they are currently under evaluation. The adoption of these tools can actually simplify <strong>and</strong> speed-up<br />
the fill-in task of the register, can support teachers <strong>and</strong> school managers in filing <strong>and</strong> searching into<br />
old registers, <strong>and</strong> can improve the communication among teachers, students <strong>and</strong> parents. In the next<br />
section, we will report on the results obtained by applying our OP2A model to assess the quality <strong>and</strong><br />
maturity of the portal that store these tools. The assessment provides the way to underst<strong>and</strong> whether<br />
each portal supports final users (i.e., teachers, managers, parents) during the choice of the digital<br />
class roll that best fits their requirements <strong>and</strong> during the adoption of the selected product.<br />
Table 2: Description of the primary set of OSS tools for digital class rolls<br />
Tool Name Version<br />
,<br />
Il registro del prof.<br />
G. Piotti<br />
(Piotti, 2011)<br />
Il registro del prof.<br />
M. Sechi<br />
(Sechi, 2011)<br />
License<br />
n.a.<br />
free<br />
V2011<br />
n.a.<br />
Features Expertise<br />
Requireme<br />
- classes <strong>and</strong> disciplines<br />
management<br />
- students info <strong>and</strong> statistics<br />
- absences <strong>and</strong> students’<br />
marks<br />
- archive of past years<br />
- classes <strong>and</strong> disciplines<br />
management<br />
- students info <strong>and</strong> statistics<br />
- absences <strong>and</strong> students’<br />
marks<br />
- archive of past years<br />
- reports for assessments,<br />
evaluations, course work,<br />
boarding school, meetings<br />
- notification messages via<br />
email/sms to teachers,<br />
students <strong>and</strong> parents<br />
162<br />
nt<br />
- Windows<br />
XP<br />
Advantages (A)<br />
Disadvantages (D)<br />
A: simple to install <strong>and</strong> use<br />
A: register export in .pdf file<br />
D: only for Windows O.S.<br />
D: no data about its<br />
adoption<br />
D: access limited to teacher<br />
n.a. A: simple to install <strong>and</strong> use<br />
A: register export in .pdf file<br />
A: notification messages<br />
A: web <strong>and</strong> mobile phone<br />
access<br />
D: no data about its<br />
adoption
Il giornale elettronico<br />
(Trivella, 2011)<br />
Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
V2010<br />
free<br />
Tool Name Version<br />
,<br />
Teach2000<br />
St<strong>and</strong>ard Ed.<br />
(Montebovi, 2011)<br />
i-Class<br />
(Pian, 2011)<br />
Hermes<br />
(Forlano, 2011)<br />
ClaSS<br />
(Class, 2011)<br />
Engrade Online<br />
Gradebook<br />
(Engrade, 2011)<br />
License<br />
V1.0<br />
free<br />
V3.2<br />
free<br />
V4.2<br />
GPL<br />
V0.9.4<br />
GPL<br />
n.a.<br />
free<br />
- simple .doc file to trace<br />
students ratings, home works,<br />
final assessments, parents<br />
talks<br />
Features Expertise<br />
Requireme<br />
- advanced software for<br />
programming <strong>and</strong> monitoring<br />
teaching activities<br />
- calendar management<br />
- work planning via Gantt<br />
diagrams<br />
- automatic generation of<br />
statistical data<br />
- reports <strong>and</strong> exports in .pdf<br />
files<br />
- archive of past years<br />
- vocal notes<br />
- classes <strong>and</strong> disciplines<br />
management<br />
- students info <strong>and</strong> statistics<br />
- absences <strong>and</strong> students’<br />
marks<br />
- archive of past years<br />
- reports for assessments,<br />
evaluations, course work,<br />
boarding school, meetings<br />
- classes <strong>and</strong> disciplines<br />
management<br />
- students info <strong>and</strong> statistics<br />
- absences <strong>and</strong> students’<br />
marks<br />
- notification messages via<br />
sms to teachers, students <strong>and</strong><br />
parents<br />
- info <strong>and</strong> marks book<br />
- reports book<br />
- automatic generation of<br />
curricula<br />
- reports, imports <strong>and</strong> exports<br />
from/to several data format<br />
- gradebook for students<br />
management<br />
- messaging <strong>and</strong> notifications<br />
- homework calendar<br />
- quizzes<br />
- discussions<br />
- wikis<br />
- flashcards<br />
- attendance<br />
- students <strong>and</strong> parents online<br />
access<br />
163<br />
- MS Office D: limited features<br />
D: only for MS Word<br />
nt<br />
- expert<br />
users<br />
- no<br />
expertise<br />
required<br />
- no strong<br />
requiremen<br />
ts<br />
- Expert<br />
user<br />
- it requires<br />
PHP,<br />
MySQL<br />
<strong>and</strong> Web<br />
space<br />
- Expert<br />
user<br />
- It requires<br />
a Web<br />
Server<br />
- no<br />
expertise /<br />
requiremen<br />
ts required<br />
Advantages (A)<br />
Disadvantages (D)<br />
A: several advanced<br />
features<br />
A: well designed <strong>and</strong><br />
developed<br />
A: access for parents <strong>and</strong><br />
students<br />
A: data export in .pdf file<br />
A: quality label by INDIRE<br />
<strong>and</strong> the Italian Ministry<br />
A: active community of<br />
users<br />
A: up-to-date with the<br />
Italian law<br />
D: based on Access DB<br />
D: not designed for primary<br />
schools<br />
A: simple to install <strong>and</strong> use<br />
A: available for Mac, Win<br />
<strong>and</strong> Linux<br />
A: nice GUI<br />
A: data import from html, txt<br />
<strong>and</strong> rtf<br />
A: access for parents <strong>and</strong><br />
students<br />
D: limited features<br />
A: designed for parents,<br />
students, managers <strong>and</strong><br />
teachers<br />
A: notification messages<br />
D: the download is<br />
available after registration<br />
D: the tool does not have its<br />
own web page but a simple<br />
forum<br />
A: international product with<br />
multi lingual support<br />
A: OSI certified<br />
A: several Operating<br />
Systems supported<br />
A: access for parents,<br />
students, managers<br />
A: web application<br />
D: documentation in<br />
English<br />
D: not compliant with Italian<br />
law <strong>and</strong> regulations<br />
A: internationally<br />
recognized<br />
A: strong community of<br />
developers <strong>and</strong> users<br />
A: a lot of advanced<br />
features<br />
A: online access<br />
D: Italian language not yet<br />
supported<br />
D: not compliant with Italian<br />
law <strong>and</strong> regulations
Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
4. OP2A evaluation of the OSS digital class rolls<br />
The adoption of a new OSS tool is not a trivial task. Usually, when users face with the adoption of a<br />
new product, they surf on search engines <strong>and</strong> look for the product that best fits their requirements.<br />
In (Basilico et al., 2011), Basilico et al. defined OP2A (Open source Product Portal Assessment), a<br />
method for evaluating the quality of the information provided by the websites that host OSS products.<br />
Unlike other evaluation methods, OP2A evaluates the website instead of the product quality <strong>and</strong> aims<br />
at ensuring both the availability of information <strong>and</strong> also its accessibility. OP2A evaluation is based on<br />
the simulation of the assessment of a new OSS product. During the simulation, an assessor will fill in<br />
a checklist by looking for a list of information provided. The OP2A method is based on the percentage<br />
of information provided <strong>and</strong> it scores the availability of the information by means of a weighted sum.<br />
On January 2011, OP2A website scores 20 evaluated projects while at the time of writing there are<br />
more than 60 evaluated projects. This highlights the activity of the community in evaluating products<br />
<strong>and</strong> sharing opinions on the evaluations itself.<br />
We applied the OP2A checklist to the tools identified in Section 3.2. Table 3 summarizes the results of<br />
the assessment providing, for each OP2A section, the percentage of information available on the<br />
website. Each information category is divided in sub category. For example, the “requirement”<br />
category, is composed by disk usage, Memory usage, Min CPU required, Other HW requirements,<br />
Supported operative systems, <strong>and</strong> Required 3rd parties components.<br />
Table 3: Assessments of the OSS digital class rolls with the OP2A methodology<br />
<strong>Information</strong> Il Registro Registro del ClaSS Teach2000 i-Class<br />
Professore<br />
Overview 56.4% 56.4% 85.2% 77.8% 77.8%<br />
Requirements 83.3% 16.6% 66.6% 0% 0%<br />
License 0% 0% 48.3% 51.6% 0%<br />
Documentation 11.5 11.5% 23% 8.63% 2.87%<br />
Downloads 75 25% 100% 75% 74%<br />
Quality Reports 36.3 27.2% 0% 0% 27.2%<br />
Community <strong>and</strong> support 0% 9.59% 58.6% 52.9% 49.4%<br />
We didn’t analyzed “Silente registro elettronico”, Hermes <strong>and</strong> Engrade because OP2A can analyze<br />
only OSS products. In this case, “Silente is a closed source product, Engrade is a SaaS <strong>and</strong> does not<br />
provide the tool itself, while Engrade website is very trivial <strong>and</strong> does not provide enough information<br />
even to start the OP2A evaluation. The experimentation shows that the quality of the analyzed portals<br />
is not adequate in general, thus needing a strong refactor of the portal itself to achieve an acceptable<br />
level of quality so as to allow users to easily adopt the products. The vast majority of the tools do not<br />
allow to evaluate requirements, do not specify the type of license <strong>and</strong> any information about the<br />
usage in other schools. These data suggest that, very often, these tools are developed by private<br />
users without specific skills instead of by a structured community of developers.<br />
Detailed results on all evaluations can be found on the OP2A website (www.op2a.org)<br />
5. Conclusions<br />
In this paper we report on two literature surveys we conducted about the availability of experiences<br />
<strong>and</strong> projects focused on OSS solutions for the Italian schools, <strong>and</strong> the availability of OSS digital class<br />
rolls. The literature surveys can provide a lot of interesting suggestions to simplify the start of new<br />
projects <strong>and</strong> new experiences in adopting OSS solutions in Italian schools.<br />
References<br />
Basilico, G., Lavazza, L., Morasca, S., Taibi, D., Tosi D. (2011) OP2A: Assessing the Quality of the Portal of<br />
Open Source Software Products, In Proceedings of the 7 th International Conference on Web <strong>Information</strong><br />
Systems <strong>and</strong> Technologies, Netherl<strong>and</strong>s, May.<br />
Battistoni, M., (2008) Open Source Software Survey in Italian Schools. Web published. www.osor.eu.<br />
Accessed: March 2011.<br />
Biolchini J., Mian P.G., Natali A.C., Conte T.U., Travassos G.H., (2007) Scientific research ontology to support<br />
systematic review in software engineering. Advanced Engineering Informatics 21(2): 133-151<br />
164
Chiara Friso, Valentina Lenarduzzi, Davide Taibi <strong>and</strong> Davide Tosi<br />
Class (2011) ClaSS Student System. Web published. http://laex.org/ class/ Accessed: March 2011.<br />
Engrade (2011) Engrade Online Gradebook. Web published. www.engrade.com/ Accessed: March 2011.<br />
Forlano, L. (2011) Hermes. Developed by L. Forlano, Web published: http://ln x.sinapsi.org/forum/ Accessed:<br />
March 2011.<br />
FUSS (2005) Free Upgrade in South Tyrol’s Schools. Web published. www.fuss.bz.it Accessed: March 2011.<br />
Montebovi, D. (2011) Teach2000. Developed by D. Montebovi, Web published: www.oversoft.it/ Accessed:<br />
March 2011.<br />
Pian, A. (2011) i-Class. Developed by A. Pian, Web<br />
published: http://web.mac.com/arakhne//Download/Applicazioni/Voci/2010/9/17_iClass_3.2a.html<br />
Accessed: March 2011.<br />
Piotti, G. (2011) Il registro della scuola secondaria di primo grado. Developed by prof. G. Piotti, Web<br />
published: www.webalice.it/gpiotti/Registro_secondaria/ Accessed: March<br />
2011<br />
Rossi, B., Scotto, M., Sillitti, A., Succi G., (2006) An Empirical Study on the Migration to OpenOffice.org in a<br />
Public Administration, International Journal of <strong>Information</strong> Technology <strong>and</strong> Web Engineering.<br />
Sechi, M. (2011) Il registro del professore. Developed by prof. M. Sechi, Web<br />
published: www.brescianet.com/registroprofe/brochurenew.htm Accessed: March<br />
2011.<br />
Trivella, T. (2011) Il giornale elettronico dell’insegnante elementare. Developed by prof. T. Trivella, Web<br />
published: www.nonsoloscuola.org/nuoverisorse.htm Accessed: March 2011<br />
165
Cyber University - a Future for Online Education<br />
Yuwanuch Gulatee 1 <strong>and</strong> Barbara Combes 2<br />
1 Nakhon Phanom University, Thail<strong>and</strong><br />
2 Edith Cowan University, Perth, Australia<br />
y_gulatee@hotmail.com<br />
b.combes@ecu.edu.au<br />
Abstract: This paper will discuss the benefits that can be achieved by <strong>using</strong> visuals <strong>and</strong> animation in virtual<br />
environments for online study. It reviews the potential of <strong>using</strong> virtual worlds as tools in online learning to create<br />
social networks <strong>and</strong> communities, aspects of the learning environment that have been associated with the<br />
motivation <strong>and</strong> retention of students in higher education. Barriers <strong>and</strong> enablers for effective online learning<br />
environments will also be discussed. The technology used for virtual worlds <strong>and</strong> animated simulation provide<br />
another dimension to online courses of study. This paper will propose that this extension of the online learning<br />
environment is one way to engage students <strong>and</strong> create a sense of belonging <strong>and</strong> being an active participant in a<br />
learning community. Using the Cyber Classroom model to create community <strong>and</strong> a sense of belonging is one<br />
possible future for online education.<br />
Keywords: eLearning, distance learning, online learning, cyber classroom, virtual environment, simulation,<br />
animation, social barriers, enablers<br />
1. Introduction<br />
The provision of learning materials online or eLearning has become increasingly popular as an<br />
alternative delivery mode in higher education (Allen & Seaman, 2007; Wagner, 2006; Salimi, 2007;<br />
Kazmer & Haythornthwaite, 2005; Kim, Bonk, & Zeng, 2005). Since the mid to late 1990s, the World<br />
Wide Web has been used as a distributed learning mechanism, enhancing the digital learning<br />
environment to support distance <strong>and</strong> on campus students. Web technology has been adopted to<br />
assist learners with real-time studying at a distance. Learning online is a new way of receiving the<br />
knowledge <strong>and</strong> skills traditionally taught face-to-face. To be really effective, online learning<br />
environments need to be more than just websites that contain educational content or linear drill <strong>and</strong><br />
practice with computer software (Gulatee & Combes, 2008). Good online curriculum should include<br />
<strong>and</strong> make use of the full potential of the electronic delivery mode <strong>and</strong> the range of technologies<br />
currently available. So watching an educational video; <strong>using</strong> a digital camera or a computer to edit<br />
pictures, text or sounds for a presentation or project; or <strong>using</strong> an interactive online whiteboard in a<br />
lesson; utilising chat <strong>and</strong> real time communications alongside asynchronous communication such as<br />
email <strong>and</strong> discussion forums; can all be considered implementations of eLearning (2010b). In the<br />
research literature eLearning has been variously described as learning <strong>using</strong> a range of different<br />
delivery technologies <strong>and</strong> methods such as Computer Based Training (CBT), Web Based Training<br />
(WBT), electronic performance support systems, webcasts, listservs <strong>and</strong> learning management<br />
systems (LMS) (Brown, 2006). According to these definitions, eLearning is much more than just the<br />
delivery of content online. It attempts to emulate the learning environment found in the traditional<br />
classroom. While online education has been available for some time at most universities, research is<br />
only now producing evidence that this is a new <strong>and</strong> totally different teaching <strong>and</strong> learning paradigm<br />
that has experienced mixed success (Werry, 2002; Zemsky & Massey, 2004, Gulatee, 2010). While<br />
some researchers believe advances in technology can overcome the separation between students<br />
<strong>and</strong> staff (Wagner & Rachael K. F., 2009), other research indicates that this physical separation leads<br />
to a disconnect between learners, their peers <strong>and</strong> the instructor (Mark, Sibley, & Arbaugh, 2005;<br />
Peltier, Schibrowsky, & Drago, 2007; Deek & Espinosa, 2005; Alex<strong>and</strong>er, 2001).<br />
Research by Gulatee (Gulatee, Brown & Combes, 2009) makes it clear that the online delivery mode<br />
is challenging for both staff <strong>and</strong> students. There are considerable barriers posed by the technical<br />
environment <strong>and</strong> the physical separation of staff from their students. How staff <strong>and</strong> students perceive<br />
the online teaching <strong>and</strong> learning environment, <strong>and</strong> the perceived differences between the on campus<br />
<strong>and</strong> online learning experience also creates a barrier to effective learning. Indeed, these social<br />
barriers to learning can have a significant impact on the online learner who is studying in isolation,<br />
removed from their peers <strong>and</strong> have no sense of belonging to a learning community. Online students<br />
experience feelings of anxiety, frustration <strong>and</strong> often lack motivation as a result (Combes & Anderson,<br />
2006). Even when universities put into place a range of measures to facilitate the development of<br />
good online courses, attrition rates amongst online students is still twice as high as on campus<br />
students (Gulatee, Brown, & Combes, 2008).These barriers to learning in the online environment are<br />
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Yuwanuch Gulatee <strong>and</strong> Barbara Combes<br />
psychological rather than a set of physical challenges to be overcome. The Cyber Classroom tool<br />
which enables students to interact synchronously with their classmates <strong>and</strong> the lecturer as well as the<br />
online environment <strong>and</strong> their course materials, is one way educators can create that sense of<br />
community that is a major part of the traditional classroom experience.<br />
2. Social barriers <strong>and</strong> enablers<br />
ELearning should be considered as a new paradigm for teaching <strong>and</strong> learning, rather than a<br />
substitute for the traditional, face-to-face classroom experience (Gulatee et al., 2008). Certainly online<br />
learners are faced with challenges when operating in the virtual environment that requires a range of<br />
different skills to engage with <strong>and</strong> interrogate eLearning materials. Clearly, students <strong>and</strong> instructors<br />
also need to approach this learning experience differently. Interacting <strong>and</strong> engaging with learning<br />
presented in this medium is very different from face-to-face instruction <strong>and</strong> curriculum should be<br />
designed so that learning materials are rich, varied <strong>and</strong> provide students with support structures to<br />
ensure that successful <strong>and</strong> deep learning takes place (Duderstadt, Wulf, & Zemsky, 2005).<br />
A major aspect of eLearning environments is collaboration. “Education practitioners <strong>and</strong> theorists<br />
have long recognized that education is a social activity where people make sense of information<br />
through interactions that support internalization <strong>and</strong> externalization” (Amelung, (2007, p. 501).<br />
According to research by Kreijnsa, Kirschnerb et al. (2003, p.3) “collaborative learning leads to deeper<br />
level learning, critical thinking, shared underst<strong>and</strong>ing <strong>and</strong> long term retention of the learned material.”<br />
Using collaborative learning techniques is currently recognized in both education <strong>and</strong> the workplace<br />
as a method to assist students to share information <strong>and</strong> be more successful in their overall learning<br />
(Eom, 2006).<br />
Many eLearning courses use collaborative learning experiences to also build a sense of community<br />
for their online students. According to Salmon:<br />
… many students are concerned about working online. They see reduced social contact<br />
in learning contexts as a real threat. They are anxious about the lack of stimulus <strong>and</strong> fun<br />
from their ‘buddies’ <strong>and</strong> on the potential loss of a special relationship with their lecturers,<br />
trainers <strong>and</strong> professors (Salmon, 2002. p. 5).<br />
Students often work online with materials that are restricted to text with the occasional inclusion of<br />
asynchronous communication via email, even in institutions where an effort has been made to provide<br />
eLearning materials that make the most of a range of technologies (Gulatee & Combes, 2007).<br />
Establishing a sense of identity <strong>and</strong> community is a difficult task that requires time. Tu <strong>and</strong> Corry<br />
(2001) suggest that there is a threshold of familiarity when studying with computers. Students need<br />
time to establish an online self <strong>and</strong> an online social presence. Salmon also tells us that “experienced<br />
participants introduced to an unfamiliar online learning platform will still go through a familiarisation,<br />
access <strong>and</strong> motivation stage” (Salmon, 2002, p. 12). For students studying entirely online,<br />
establishing a personal identity <strong>and</strong> feeling part of the university community is an ongoing issue that is<br />
revisited every time they begin a new unit with a different set of individuals.<br />
Self-motivation has also been identified as an important prerequisite for success when studying online<br />
(Allen & Seaman, 2007; Yukselturk, 2009). Other enablers for success in the online environment are<br />
the amount of time students commit to their study, the acquisition of study skills, access to <strong>and</strong> prior<br />
experience with technology (Waschull, 2005). The isolation experienced when studying alone also<br />
affects students’ motivation to engage with the online learning environment (Combes & Anderson,<br />
2006). Other studies have found that improvements in motivation increase levels of enjoyment<br />
experienced by students. Providing an environment in higher education that students perceive as ‘fun<br />
to learn’ by <strong>using</strong> games, simulation <strong>and</strong> animation (Aldrich, 2009; Whitton, 2009) increases student<br />
motivation <strong>and</strong> makes studying online more enjoyable. Such environments engage, enrich <strong>and</strong><br />
provide that sense of community students need to create their identity as part of the learning<br />
community.<br />
3. Student perceptions<br />
In a study completed in a School of Computer Science with a total commitment to the provision of<br />
online courseware for all students, <strong>and</strong> a long history of engagement with enablers for eLearning as<br />
reported in the research literature, Gulatee (2010) found a range of reactions from the student<br />
participants, particularly in the area of self-motivation. These students were studying in a School<br />
which has a high level of integration <strong>and</strong> dual delivery modes (on campus <strong>and</strong> online) across all<br />
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Yuwanuch Gulatee <strong>and</strong> Barbara Combes<br />
courses (<strong>Information</strong> Technology, Computer Science, <strong>and</strong> Library <strong>and</strong> <strong>Information</strong> Science). Student<br />
participants in this research were studying a range of courses <strong>and</strong> units from the highly technical to<br />
the theoretical.<br />
An initial data collection of historical course data revealed that even in a school with a long history <strong>and</strong><br />
developed eLearning culture (Anderson et al, 2005) there was still an unusually high level of attrition<br />
amongst students studying wholly online. A Web questionnaire was developed to ascertain how<br />
students felt about online study, with an emphasis on students studying technical subjects. All modes<br />
of delivery were considered: wholly online, mixed mode <strong>and</strong> on campus. Both open <strong>and</strong> closed<br />
questions were used in the questionnaire to gain a rich dataset <strong>and</strong> which allowed participants to<br />
further exp<strong>and</strong> on their experiences.<br />
In-depth interviews were also conducted with a small number of participants studying different<br />
courses <strong>and</strong> via different delivery modes. Interviews were used because they are valuable tools which<br />
can provide rapid, immediate responses <strong>and</strong> on the spot clarification from the perspective of the<br />
interviewee. They also provide opportunities for more in-depth examination of identified issues <strong>and</strong><br />
can lead to further context specific follow-up questions (Brenner, Brown, & Canter, 1985; Guion,<br />
2006). Interviews can also help to explore information from the sample that cannot be directly<br />
observed, such as feelings, thoughts <strong>and</strong> intentions (Campbell, 1998). The interview questions were<br />
guided by the preliminary findings of the Web questionnaire to add a measure of data triangulation<br />
between the three direct data collection instruments: historical analysis, Web questionnaire <strong>and</strong><br />
interviews (Jicks, 1979).<br />
While the primary focus of the original study (Gulatee, 2010) was to investigate online teaching <strong>and</strong><br />
the delivery of Computer Science topics, an interesting finding from the research was the importance<br />
of motivation as a predictor for success <strong>and</strong> completion when studying wholly online. Students<br />
identified social barriers to eLearning such as physical separation, poor communication, lack of<br />
immediate access to the instructor <strong>and</strong> consistent feedback. Interestingly, in this study, staff reported<br />
similar issues, but from the lecturer’s perspective. Both groups felt that a major problem when<br />
studying via the Web, is the lack of direct interaction in teaching <strong>and</strong> learning activities, both peer-topeer<br />
<strong>and</strong> staff to student. Questionnaire responses from student participants indicated that frequent<br />
communication with peers, group work, prompt email feedback from instructors <strong>and</strong> access to quality<br />
online materials helped to motivate <strong>and</strong> encourage them to continue with their online study. They<br />
wanted to feel part of the interaction experienced in a traditional classroom. When these issues are<br />
addressed <strong>and</strong> addressed well, poor student self-motivation <strong>and</strong> self-discipline can be lessened <strong>and</strong><br />
student satisfaction increased.<br />
However in table 1 <strong>and</strong> 2, students still expressed significant levels of frustration <strong>and</strong> missed the<br />
classroom interaction. In the student interviews, respondents agreed that isolation is a major issue<br />
when studying online. Isolation leads to frustration <strong>and</strong> feelings of anxiety <strong>and</strong> disconnectedness from<br />
the instructor <strong>and</strong> peers. As the following students report:<br />
I just would like to say that online units are only good if you can not get access to the<br />
campus. Otherwise it is really not fair to study online. The courses are so much more<br />
difficult if we do not attend the class because we always have questions about issues<br />
<strong>and</strong> the lecturer is just not there. Sending email is not the best thing to do because of the<br />
time it takes to get an answer back. I am doing an online unit for the second time <strong>and</strong><br />
unfortunately they are the hardest ones. Thus it is very hard to get through them.<br />
(Student Participant ID: 61)<br />
It can sometimes be very difficult to be motivated to study <strong>and</strong> feel that I am always trying<br />
to catch up with the weekly readings. I haven't really been participating in the discussion<br />
boards like I should so I haven't been able to bounce ideas off other students. I hoping to<br />
rectify this next term by learning from the experience gained from this term (my first time<br />
wholly studying only). (Student Participant ID: 87)<br />
These comments indicate that mixed mode students also preferred to study on campus <strong>and</strong> went<br />
online only when they had no other choice. The research literature also supports these results,<br />
particularly in technical subjects. Students find it more difficult to apply technical theories to practical<br />
problems <strong>and</strong> applications when working wholly online (Deek & Espinosa, 2005; Hagan & Lowder,<br />
1996, p. 39; McSporran & King, 2005; Muilenburg & Berge, 2005).<br />
168
Table 1: Wholly online participants’ attitudes to<br />
Yuwanuch Gulatee <strong>and</strong> Barbara Combes<br />
Students online (N=41) SD D NA A SA<br />
Missing classroom interaction 0 3 1 18 19<br />
Percent 0 7 2 44 47<br />
Study online for convenience 0 1 2 11 27<br />
Percent 0 2 5 27 66<br />
Table 2: Wholly online students, levels of frustration<br />
Students online SD D NA A SA<br />
Total (N=41) 3 9 3 8 18<br />
Percent 7 22 7 20 44<br />
While this <strong>and</strong> other studies present a consistent view of online learning experiences from the student<br />
perspective, this research also examined the staff point of view. While not unique in its recognition of<br />
the importance of staff in the provision of eLearning, this study certainly focused far more heavily on<br />
the staff perspective <strong>and</strong> possible connections between their views <strong>and</strong> those of their students. This<br />
study shows, just as with the student cohort, that staff members experience issues of isolation,<br />
frustration <strong>and</strong> disconnectedness when teaching via the online environment. Like the students, this<br />
response is largely due to the issue of physical separation, which in turn can lead to a lack of<br />
motivation <strong>and</strong> commitment to online teaching <strong>and</strong> curriculum development. These issues are in<br />
addition to the more generic issues commonly raised in the research literature such as time, workload,<br />
a lack of professional development, <strong>and</strong> in some cases, poor technical literacy. The commentary<br />
below clearly illustrates the staff perspective of how the physical separation imposed by the online<br />
environment affects staff interactions with their students.<br />
When I want to solve a problem with a student, miscommunication really makes me feel<br />
frustrated. For online I need to do a lot of preparation. I spend more contact time with<br />
online students. I do feel isolated from the students. The team bonding experience, not<br />
just within the students, but also the lecturer <strong>and</strong> student relationship, makes the student<br />
experience more enjoyable. (Staff participant ID: 4)<br />
Recognition that the online environment is very different from the f-t-f environment is a<br />
first step in developing materials that will cater for both <strong>and</strong> realistic time allocations for<br />
the workload involved. (Staff participant ID: 15)<br />
The findings of this study clearly show that in any research involving effective eLearning the<br />
perspectives <strong>and</strong> expertise of the staff must be considered as being equally pre-eminent as those of<br />
the students. In the past there has been a tendency for research to focus on the student as consumer<br />
of eLearning programs. A conclusion of this research is that such a singular focus can lead to a very<br />
one sided assessment of eLearning <strong>and</strong> its attendant issues. Providing learning programs that are<br />
interactive <strong>and</strong> socially dynamic, inherently involves both the instructor <strong>and</strong> the learner <strong>and</strong> therefore<br />
meaningful conclusions about eLearning must include input from both parties. This research <strong>and</strong><br />
others like it indicate that both students <strong>and</strong> staff want to feel connected <strong>and</strong> part of a learning<br />
community that is a feature of the traditional classroom. The personal touch that is an essential part of<br />
the teaching-learning experience is not readily available online, as reflected in both the student <strong>and</strong><br />
staff interviews. Thus, the instructor-learner dynamic that is a feature of the traditional classroom<br />
experience, but essentially missing from the online environment due to physical separation, makes it<br />
difficult to support <strong>and</strong> motivate students <strong>and</strong> staff when teaching <strong>and</strong> learning online.<br />
4. Higher education <strong>and</strong> virtual worlds<br />
Developments in technology create new possibilities for online classrooms. New methods of<br />
communication such as interactive social networking tools, online whiteboards, both synchronous <strong>and</strong><br />
asynchronous tutorials, <strong>and</strong> chat room avatars provide students with opportunities to engage in a<br />
social community which also provides a venue for collaborative learning, interactivity, <strong>and</strong> teambased,<br />
problem–solving activities. Using animated virtual world communications provides students<br />
with a virtual space that is familiar as it resembles the physical classroom, <strong>and</strong> is a space where<br />
students can experience the social learning aspects that occur face-to-face (Wankel & Kingsley,<br />
2009). In research by John, Lesley, & Leonard (2009) students reported a favourable reaction to the<br />
169
Yuwanuch Gulatee <strong>and</strong> Barbara Combes<br />
use of virtual world communications, which provided them with the facility to share ideas <strong>and</strong> work as<br />
a group such as occurs in a traditional classroom. Using virtual worlds to study provides an<br />
immersive, persuasive <strong>and</strong> very flexible learning environment. These environments reflect gaming<br />
software that is often familiar, helps to capture students’ imagination <strong>and</strong> are perceived as selfmotivating<br />
by students (Wankel & Kingsley, 2009).<br />
Research by Aldrich (2009) found that the provision of an interactive virtual environment can help<br />
students <strong>and</strong> reduce the social separation experienced during distance learning. The inclusion of<br />
virtual environments in an online classroom, provide a semblance of the reality experienced in the<br />
traditional classroom. “These environments can capture <strong>and</strong> convey enough social cues, such as<br />
body language, interactive props, <strong>and</strong> the look <strong>and</strong> feel of ‘real’ surroundings to convince some part of<br />
the participants’ brains that they are physically in this other world” (Aldrich, 2009, p. 8).<br />
Emerging findings from Aldrich, Gulatee <strong>and</strong> others (Whitton, 2009; Allen & Seaman, 2007;<br />
Yukselturk, 2009; Combes & Anderson, 2006) in the research literature, clearly demonstrate that the<br />
eLearning environment does indeed have a significant impact <strong>and</strong> is a major contributor to the social<br />
<strong>and</strong> physical separation experienced by staff <strong>and</strong> students. Using virtual worlds technologies in<br />
eLearning environments provide possibilities to overcome these social barriers to create cyberspaces<br />
where staff <strong>and</strong> students can engage <strong>and</strong> recreate the teacher-learner dynamic online.<br />
5. Cyber university<br />
Using virtual worlds to create a cyber university interface is one way of providing a bridge between the<br />
virtual <strong>and</strong> the traditional classroom. It can be uploaded into a traditional LMS such as BlackBoard<br />
where it provides a familiar social interface rather than the differentiated, folder structure common to<br />
most students. Using 2D rather than 3D applications <strong>and</strong> animated avatars similar to those in most<br />
primary games, means that upload <strong>and</strong> b<strong>and</strong>width issues are kept to a minimum. At the same time<br />
students can become personally involved in the learning environment by choosing their avatar <strong>and</strong><br />
participating directly with others via a chat function, which can be for either social (fun) or learning<br />
activities. By emulating the real world classroom students can interact <strong>and</strong> engage in a simulated<br />
classroom that is quite different from the segmented, text based environment that is often a feature of<br />
LMS <strong>and</strong> eLearning. The use of 2D avatars simplifies the environment <strong>and</strong> makes it much easier to<br />
use than current virtual worlds such as Second Life, which require high b<strong>and</strong>width <strong>and</strong> are often<br />
‘clunky’ to use (Mennecke, Hassall & Triplett, 2008).<br />
A mock-up of a possible cyber university interface is presented below. Students choose their avatar<br />
<strong>and</strong> can ‘talk’ to <strong>and</strong> interact with their peers <strong>and</strong> their lecturer both in real time <strong>and</strong> asynchronously.<br />
They can access course materials by clicking on relevant titles in the bookcase <strong>and</strong> receive static<br />
messages on the screen.<br />
Such an interface also helps to personalize the eLearning space from the staff perspective. Students<br />
can have a visual of their lecturer <strong>and</strong> peers as avatars. The avatars mean that individual privacy is<br />
ensured, while still providing an image <strong>and</strong> visual point of recognition <strong>and</strong> contact. Students can come<br />
to the online class just like a real class. They can hear the lecturer talking, interact with the learning<br />
via an electronic whiteboard <strong>and</strong> thus experience real time interaction with their lecturers <strong>and</strong> peers.<br />
Signing into the interface via an avatar means that attendance checking is made easier for the<br />
lecturer <strong>and</strong> students are encouraged to ‘attend’ the virtual classroom. Non-attendance at lectures<br />
when online materials are provided to on campus students is an issue that leads to poor student time<br />
management, a lack of motivation <strong>and</strong> engagement, <strong>and</strong> poor completion rates (Gulatee, 2010).<br />
Other technology can also be embedded into the cyber university interface. A reward system tied to<br />
assessment where students can earn points by attendance, contributions, interactivity <strong>and</strong> helping<br />
other students can be implemented to make the interface more engaging (Baatard, 2008). Online<br />
students can partner up with on campus students during group assignments so all students have the<br />
same assessments. Lecturers can even video stream so the online class is conducted at the same<br />
time as on campus lectures to foster a collaborative sense of community. All aspects of the online<br />
class including student <strong>and</strong> staff interactions can be fully recorded so students who really cannot<br />
make it to the class (either on campus or online) can complete it later, thus ensuring that the flexibility<br />
of eLearning is not compromised.<br />
170
Yuwanuch Gulatee <strong>and</strong> Barbara Combes<br />
Figure 1: Cyber university interface<br />
Our virtual interface could be multi-layered <strong>and</strong> include a number of ‘rooms’. A virtual office could be<br />
created where a lecturer <strong>and</strong> student could conduct a one-to-one, private meeting by appointment.<br />
They could use real time text, audio, video chat <strong>and</strong> an online whiteboard. Such interaction between<br />
staff <strong>and</strong> students can provide that real time interaction currently missing from the eLearning<br />
experienced by most students. Students could also do private study sessions <strong>and</strong> group work or<br />
participate in social events online with their avatars. A virtual classroom where the lecturer has control<br />
of the learning environment could be used to conduct classes, while a conference room where<br />
students can form discussion groups <strong>and</strong> conduct group work places the control of the learning,<br />
motivation <strong>and</strong> activity back into the h<strong>and</strong>s of the learners. The Time Machine is a room for students<br />
who miss the class <strong>and</strong> would like to replay the whole class which has been recorded.<br />
Taking the positive aspects of virtual worlds technologies <strong>and</strong> embedding these into traditional LMS<br />
eLearning environments to create a bridge between the virtual <strong>and</strong> real classroom may help us to<br />
create more engaging online learning. Motivation, isolation <strong>and</strong> a lack of feeling part of a learning<br />
community have been identified as major impediments to success at university <strong>and</strong> as issues for<br />
student retention <strong>and</strong> completion of eLearning programs. Combining the two to create a simple, yet<br />
effective interactive interface that will engage students <strong>and</strong> create a real, identifiable learning ‘space’,<br />
is one way to make eLearning more attractive to students who value the teacher-learner dynamic that<br />
is a feature of the traditional classroom. Such an environment is only restricted by the imagination of<br />
the participants. Welcome to Cyber University!<br />
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173
Managing Costs <strong>and</strong> Performance of <strong>Information</strong><br />
Technology in a Group Context – Current Challenges for<br />
Multinational Enterprises<br />
Florian Hamel, Thomas Ph. Herz, Falk Uebernickel <strong>and</strong> Walter Brenner<br />
University of St. Gallen, Switzerl<strong>and</strong><br />
florian.hamel@unisg.ch<br />
thomas.herz@unisg.ch<br />
falk.uebernickel@unisg.ch<br />
walter.brenner@unisg.ch<br />
Abstract: Over the past few decades, the importance of IT has increased year after year for the majority of<br />
businesses. Popular inorganic growth <strong>and</strong> consolidation strategies have led to the formation of business group<br />
organizations. The resulting organizational structure is characterized by a systematic delegation of duties<br />
between the core entity <strong>and</strong> the business entities. Such organizational structures represent a challenging<br />
environment for the group-wide management of IT costs <strong>and</strong> performance. The management of costs <strong>and</strong><br />
performance of IT, also known as IT evaluation, describes the discipline of ensuring the effective <strong>and</strong> efficient use<br />
of IT resources. The aim of this paper is to analyze the current situation regarding IT evaluation in business<br />
groups as well as to identify current challenges within this specific area. Seven multinational business groups will<br />
provide the basis for the following multiple case study.<br />
Keywords: IT performance management, IT cost management, IT evaluation, IT controlling, case study<br />
1. Introduction<br />
The rapid development of IT, along with the globalization trend, have significantly influenced the way<br />
organizations operate. These trends affect corporate strategies <strong>and</strong> operational decisions of<br />
organizations. Hence, depending on the business sector, IT budgets can account for up to 15% of<br />
corporations’ revenues (Minton <strong>and</strong> Shirer, 2010). This fact stresses the importance of carefully<br />
weighing the benefits of IT investments against costs (Brynjolfsson <strong>and</strong> Yang, 1996; Remenyi et al.,<br />
2007; McAfee <strong>and</strong> Brynjolfsson, 2008).<br />
Over the past few decades, the importance of IT has increased year after year for most businesses<br />
(McAfee <strong>and</strong> Brynjolfsson, 2008). Furthermore, a trend toward inorganic growth <strong>and</strong> consolidation<br />
strategies among corporations has been observed over the last 10 years (Gell et al., 2010). Through<br />
mergers <strong>and</strong> acquisitions, corporations aim to sustain <strong>and</strong> gain competitive advantages (Walter <strong>and</strong><br />
Barney, 1990). Such organizational group structures create a challenging environment for efficient<br />
<strong>and</strong> effective group-wide management of IT costs <strong>and</strong> performance; especially in terms of<br />
governance <strong>and</strong> alignment (Ives <strong>and</strong> Jarvenpaa, 1991).<br />
<strong>Management</strong> of IT costs <strong>and</strong> performance is also referred to by several other terms among<br />
information systems (IS) scholars worldwide. This paper uses the term “IT evaluation” which is widely<br />
used within the Anglo-Saxon area. The terms “IT performance management” or “IT performance<br />
measurement” are also used within this research area. Furthermore, the term “IT controlling” is worth<br />
mentioning as a term used by IS scholars from German-speaking areas (Schauer, 2006).<br />
According to existing literature reviews (Brynjolfsson <strong>and</strong> Yang, 1996; Gunasekaran et al., 2006;<br />
Schauer, 2006; Frisk, 2007; Rom <strong>and</strong> Rohde, 2007; Kohli <strong>and</strong> Grover, 2008; Schwertsik et al., 2009;<br />
Hamel et al., 2010), there are several IT evaluation frameworks, as well as performance management<br />
methodologies, established within the IS community. However, current literature lacks coverage of IT<br />
evaluation in a business group context (Hamel et al., 2010). This is also supported by the expert<br />
interviews that we have conducted to prove the practical relevance of this research topic. One of the<br />
experts proposed that current theoretical IT evaluation frameworks do not entirely cover the business<br />
group context. Therefore, this research study aims to investigate the specific status quo of business<br />
groups in terms of IT evaluation as well as current challenges. Consequently, we conducted a multiple<br />
case study with the purpose of addressing the following research questions (RQ):<br />
[RQ.1] What is the status quo for IT evaluation in business groups?<br />
[RQ.2] What are the challenges for group IT evaluation in business groups?<br />
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Florian Hamel, Thomas Ph. Herz, Falk Uebernickel <strong>and</strong> Walter Brenner<br />
To address these questions, we used case studies of large multinational business groups which have<br />
a solid <strong>and</strong> diversified corporate structure consisting of several legally independent business entities<br />
operating in a global context.<br />
The paper is structured as follows: First, we will discuss related work, specifically the terms “IT<br />
evaluation” as well as “business groups”, <strong>and</strong> outline the research approach. Second, we will provide<br />
a brief description of the case study participants <strong>and</strong> their current engagement in terms of IT<br />
evaluation on the business group level. Next, the paper will provide the data analysis <strong>and</strong> key findings<br />
of the multiple case study. Finally, we will summarize their results <strong>and</strong> outline future research<br />
requirements.<br />
2. Foundation<br />
2.1 Business groups<br />
In times of growing market insecurity, structures which encourage flexibility <strong>and</strong> innovation are<br />
needed to facilitate prompt responses to new market developments. Furthermore, the globalization of<br />
markets, increasing complexity of management tasks <strong>and</strong> constantly changing economic <strong>and</strong> social<br />
structures, require permanent change in organizations (Albach et al., 2000). Corporations with group<br />
structure characteristics are capable of meeting these requirements (Granovetter, 2005). Hence, such<br />
companies are defined as business groups (Granovetter, 1995; Granovetter, 2005; Smangs, 2006).<br />
Business groups consist of a collective of legally independent companies. These companies are<br />
linked by various ties, including ownership or economic means, through which they achieve mutual<br />
objectives (Goold <strong>and</strong> Campbell, 1989; Granovetter, 1995; Penrose, 2009). On top of this collective,<br />
consisting of individual companies, is typically a core entity which at minimum provides common<br />
administrative or financial control, or managerial coordination among member companies. The level of<br />
governance of this core entity within the business group varies depending on ownership <strong>and</strong><br />
leadership principles within the group (Granovetter, 2005).<br />
The core entity, also known as the corporate center acts only as a leadership entity among<br />
autonomous business units within the group. This implies that the corporate center coordinates the<br />
corporate strategies on the business sector level <strong>and</strong> rarely beyond (Goold <strong>and</strong> Campbell, 1989;<br />
Granovetter, 2005; Smangs, 2006). Statistical <strong>and</strong> financial data, such as cash flows, revenues,<br />
return on investment, costs, quality, <strong>and</strong> market share, are instruments to manage, monitor, steer,<br />
<strong>and</strong> control business entities in management holding business groups (Albach et al., 2000; Wheelen<br />
<strong>and</strong> Hunger, 2009). Experts are discordant about this organizational structure (Diekmann, 2004). The<br />
motivation to choose such a decentralized corporate structure is to give the individual business<br />
entities the opportunity to react to market changes more flexibly <strong>and</strong> quickly as well as tailor their<br />
offering to local customer needs more than a large hierarchical corporation ever could. On the other<br />
h<strong>and</strong>, the realization of synergies between individual business entities within the group is a very<br />
challenging task <strong>and</strong> requires stringent <strong>and</strong> group-wide accepted leadership principles (Diekmann,<br />
2004; Granovetter, 2005).<br />
2.2 Managing costs <strong>and</strong> performance of IT<br />
Managing costs <strong>and</strong> performance of IT, or IT evaluation, is derived from general managerial<br />
accounting. IT evaluation is the approach for a “specific managerial accounting problem set” (Horváth,<br />
2009) in the context of IT. Clarification of the term managerial accounting is essential prior to the<br />
explanation of the term IT evaluation. Managerial accounting is defined as a collection of qualitative<br />
<strong>and</strong> quantitative management instruments which are utilized to coordinate corporate information flows<br />
to support management decision processes, but do not include internal or external auditing tasks<br />
(Garrison et al., 2009; Horváth, 2009). There are several specific managerial accounting approaches<br />
established with varying emphases depending on the application area (Horváth <strong>and</strong> Reichmann,<br />
2003; Garrison et al., 2009).<br />
IT evaluation includes the managerial accounting aspect of information technology, operational<br />
information systems <strong>and</strong> data processing within organizations as well as the corresponding leadership<br />
processes of the resource information itself. In doing so, the classical aspects of managerial<br />
accounting such as data processing, planning, governance <strong>and</strong> coordination are addressed (Van<br />
Grembergen, 2001; Garrison et al., 2009; Horváth, 2009; Krcmar, 2009).<br />
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Florian Hamel, Thomas Ph. Herz, Falk Uebernickel <strong>and</strong> Walter Brenner<br />
The formal objectives of IT evaluation are to ensure effective <strong>and</strong> efficient use of IT resources (Van<br />
Grembergen, 2001; Irani <strong>and</strong> Love, 2008; Krcmar, 2009). In addition to formal objectives, aims with<br />
regard to content are also pursued, where business value, costs, quality, functionality <strong>and</strong> on-time<br />
delivery are the focus (Van Grembergen, 2001; Remenyi et al., 2007; Irani <strong>and</strong> Love, 2008; Kohli <strong>and</strong><br />
Grover, 2008; Krcmar, 2009). A review of established literature shows that IT evaluation can be<br />
segmented into three generic tasks: monitoring, planning, <strong>and</strong> steering. Monitoring means to monitor<br />
<strong>and</strong> report the status quo whereas planning is defined as setting performance targets in alignment<br />
with the business <strong>and</strong> IT strategy. Steering is associated with a continuous target-performance<br />
comparison <strong>and</strong> in the event that a deflection is identified, initiating appropriate steering measures<br />
(Horváth <strong>and</strong> Rieg, 2001; Garrison et al., 2009; Krcmar, 2009).<br />
IT evaluation has a significant influence on corporate IT strategy (Buchta et al., 2007). The success of<br />
a business group IT strategy is heavily dependent on the long-term alignment of IT with decentralized<br />
processes (Tanriverdi, 2006; Buchta et al., 2007; Sahaym et al., 2007). The monitoring, steering <strong>and</strong><br />
planning of IT resources <strong>and</strong> assets, (e.g. IT services, IT projects <strong>and</strong> IT infrastructure), from a group<br />
perspective, is essential to achieve synergies (Tanriverdi, 2006) because IT management decisions<br />
are not only made on the business entity level within a business group.<br />
2.3 Research methodology<br />
A multiple case study (Yin, 2009) was designed to elaborate on the current status quo of IT evaluation<br />
in business groups [RQ.1] <strong>and</strong> identify the challenges for IT evaluation on the group level [RQ.2].<br />
According to current literature reviews (Brynjolfsson <strong>and</strong> Yang, 1996; Gunasekaran et al., 2006;<br />
Schauer, 2006; Frisk, 2007; Rom <strong>and</strong> Rohde, 2007; Kohli <strong>and</strong> Grover, 2008; Schwertsik et al., 2009;<br />
Hamel et al., 2010), limited information about IT evaluation in a group context is available. The<br />
exploratory <strong>and</strong> qualitative case study research method is appropriate for the theory-building stage,<br />
<strong>and</strong> aims to formulate more precise questions that further research can answer (Eisenhardt, 1989;<br />
Eisenhardt <strong>and</strong> Graebner, 2007).<br />
The unit of analysis used is the organizational part of multinational enterprises responsible for the<br />
management of costs <strong>and</strong> performance of IT on the group level. This can be a single department<br />
within the core entity of the business group or a diversified group of entities within the organization.<br />
We decided to take 7 cases into consideration for this paper which is in line with Eisenhardt (1989),<br />
who suggests 4 to 7 cases. For multiple case studies, each case must be selected so that it either<br />
predicts similar results or predicts contrasting results but for predictable reasons (Yin, 2009).<br />
Therefore, based on accessible public corporate data such as investor relation <strong>and</strong> balance sheet<br />
reports, only corporations with a business group structure were selected.<br />
Table 1: Overview of conducted interviews <strong>and</strong> cases<br />
Company /<br />
Case<br />
Number of interview partners Total duration in hours Position<br />
Executive IT manager<br />
ALPHA 3 5.0<br />
Senior IT manager<br />
IT project manager<br />
BETA 1 2.0 Executive IT manager<br />
CHI 2 2.0<br />
Executive IT manager<br />
IT project manager<br />
Executive IT manager<br />
DELTA 3 3.0<br />
Senior IT manager<br />
IT project manager<br />
EPSILON 2 3.0<br />
Senior IT manager<br />
Senior IT manager<br />
Executive IT manager<br />
PHI 3 4.0<br />
Senior IT manager<br />
Senior IT manager<br />
GAMMA 2 3.0<br />
Executive IT manager<br />
Senior IT manager<br />
The data collection is based on a questionnaire which later served as a guideline for semi-structured<br />
interviews with the case study participants. The general questionnaire design was inspired by the<br />
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business engineering approach (Österle, 2010) <strong>and</strong> the internal factor analysis of the SWOT<br />
framework (Wheelen <strong>and</strong> Hunger, 2009). The questionnaire was evaluated <strong>and</strong> refined by a senior IS<br />
researcher <strong>and</strong> two senior IT managers who are specialists in the field of IT evaluation. Between<br />
December 2009 <strong>and</strong> March 2010, expert interviews were conducted with IT managers of these seven<br />
business groups. The interviews took an average of 2.75 hours <strong>and</strong> were conducted by two<br />
researchers. The number of experts per interview varied from one to three (refer to Table 1). Answers<br />
to the questions in the questionnaire as well as additionally provided information, statements <strong>and</strong><br />
documents from the interview partners, were journalized during the interview. This documentation<br />
provides the basis for our detailed analysis. We therefore used the qualitative content analysis<br />
methodology of Mayring (2008). Additionally, the findings were qualitatively evaluated during two<br />
workshops with practitioners.<br />
3. Case study findings<br />
3.1 Status quo<br />
In order to identify the status quo of IT evaluation in business groups, we conducted a multiple case<br />
study described in the research methodology section above. The term “status quo” st<strong>and</strong>s for the<br />
current situation <strong>and</strong> approach to group IT evaluation within business groups. We present the status<br />
quo structured into three segments: strategy layer, process layer, <strong>and</strong> system layer (Österle, 2010).<br />
Table 2 categorizes the case study participants according to revenue <strong>and</strong> number of employees.<br />
Additionally, it provides an overview of where the IT evaluation responsibility on the group level is<br />
anchored within the organization.<br />
Strategy layer: We identified that neither a common underst<strong>and</strong>ing of IT evaluation in business groups<br />
nor a clear definition of responsibilities exists across all case study participants. As already explained,<br />
IT evaluation from a scientific perspective can be structured in three abstract tasks: monitoring,<br />
planning, <strong>and</strong> steering. All case study participants indicated that their group IT evaluation department<br />
carries out the monitoring task. However, utilization of controlling tasks varies from only monitoring,<br />
(via planning) to a holistic approach encompassing all three tasks.<br />
Table 2: Profile of corporations, corporate data is based on fiscal year 2009 ( achieved; − not<br />
achieved, CIO: Chief <strong>Information</strong> Officer, COO: Chief Operations Officer, CFO: Chief<br />
Financial Officer, bn = 10 9 )<br />
Company /<br />
Case<br />
Industry segment<br />
Revenue > EUR<br />
50bn<br />
Employees ><br />
100k<br />
Anchoring of group<br />
IT evaluation<br />
ALPHA Financial Group CIO<br />
BETA Financial n/a − Group CFO & Group COO<br />
CHI Communications Group CFO<br />
DELTA Communications − − Group CFO<br />
EPSILON Consumer cyclical Group CIO<br />
PHI Consumer cyclical − Group CFO<br />
GAMMA Utilities − Group CFO<br />
Process layer: We were confronted with several different organizational setups. The most<br />
straightforward setup is the anchoring of the group IT evaluation function within the group financial<br />
accounting department, specifically the group CFO area; however, variations are possible. Another<br />
frequently mentioned option is anchoring within the group IT department. This, however, has the bias<br />
that the department is controlling itself. A clear tendency towards an organizational anchoring of<br />
group IT evaluation departments or specifically the associated tasks <strong>and</strong> responsibilities below the<br />
group CFO is observable (refer to Table 2).<br />
The reporting of analyzed <strong>and</strong> aggregated IT facts <strong>and</strong> figures is one of the most common processes<br />
within the area of responsibility of group IT evaluation. It is used to support the monitoring task of IT<br />
evaluation, as mentioned above. The majority of case study participants report facts <strong>and</strong> figures on a<br />
quarterly <strong>and</strong> yearly basis. The quarterly reports tend to be less broad than the yearly reports. Only<br />
two corporations generate reports on a monthly basis. Additionally, the majority of case study<br />
participants focus mainly on IT costs in their reports. Furthermore, the measurement contributed<br />
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Florian Hamel, Thomas Ph. Herz, Falk Uebernickel <strong>and</strong> Walter Brenner<br />
business value by IT is a secondary focus that is scarcely used among the participating business<br />
groups. In addition to costs <strong>and</strong> IT business value as evaluation objects IT projects for some case<br />
study participants are in scope. Evaluation of IT projects on the group level differs slightly from the IT<br />
project evaluation within the individual business entities. The business entity IT evaluation has all<br />
local IT projects in scope whereas on the group level, only group relevant IT projects are in scope. It<br />
is very possible for local IT projects to be relevant for the whole group. Common criteria of<br />
participants for group relevance are e.g. volume in terms of resources, regulatory or strategic<br />
relevance for the entire business group, or impact on more than one business entity.<br />
System layer: A wide spectrum of system approaches is observable in the field among case study<br />
participants. The system spectrum ranges from Microsoft Excel, to loose coupling of proprietary<br />
systems, to fully integrated enterprise systems. The pragmatic approach of <strong>using</strong> Microsoft Excel<br />
templates to aggregate the data from all group business entities is still observable. An integrated<br />
information systems solution, i.e. together with financial accounting, is utilized by the majority of case<br />
study participants, but in almost all cases only large business entities of the individual business<br />
groups are integrated. Therefore, it is obvious that these approaches bear a high risk of poor data<br />
reliability. We were often confronted with different data gathering processes within the same business<br />
group depending on the IT evaluation object.<br />
3.2 Case study findings: Challenges<br />
Another aim of this study is to identify challenges within the field of group IT evaluation. As described<br />
above, we discussed our interview findings in two evaluation workshops. The identified challenges<br />
were then ranked according to their importance consequently limiting the ranking list to five elements.<br />
In the following paragraphs we highlight <strong>and</strong> explain the five most important challenges for IT<br />
evaluation in a business group context:<br />
1. Ensuring availability of IT cost <strong>and</strong> performance figures<br />
2. Improving IT project portfolio management<br />
3. Enriching IT performance measurement<br />
4. Implementing IT evaluation st<strong>and</strong>ards <strong>and</strong> methodologies<br />
5. Bridging the gap between IT cost management <strong>and</strong> operational process cost management<br />
1. Ensuring availability of IT cost <strong>and</strong> performance figures: The group-wide availability of IT cost <strong>and</strong><br />
performance figures in business groups is one of the most substantial challenges. Most participants<br />
explained that IT departments in business entities report only a minimum amount of facts <strong>and</strong> show a<br />
low willingness to cooperate with the responsible core entity. This circumstance is mainly facilitated by<br />
the business group structure <strong>and</strong> inherited heterogeneous IT environments of each legal business<br />
entity. Yet, this is not only focused on IT costs to some extent it also encompasses other IT evaluation<br />
objects, i.e. the IT project portfolio, IT infrastructure <strong>and</strong> IT sourcing activities. For instance, drawing a<br />
holistic IT cost picture across the entire group was, for most case study participants, an almost<br />
insolvable challenge or only achievable by accepting many abstractions <strong>and</strong> compromises.<br />
2. Improving IT project portfolio management: Most case study participants are confronted with<br />
challenges regarding their group-wide IT project portfolio management. There are several<br />
methodologies for IT project portfolio management at h<strong>and</strong> (Morris <strong>and</strong> Pinto, 2007; Kerzner, 2010),<br />
but they are tailored to single business unit corporations <strong>and</strong> do not apply to business groups. The<br />
majority of case study participants indicated that it is challenging to establish group-wide transparency<br />
across all projects <strong>and</strong> to prioritize those projects that are of group relevance. Thereby, the need for<br />
transparency encompasses information about all ongoing IT projects including their characteristics<br />
like business case, strategic importance <strong>and</strong> current status. Furthermore, it is essential to differentiate<br />
between business entity projects <strong>and</strong> group projects. The latter kinds of projects have to be bundled if<br />
possible <strong>and</strong> prioritized on the group level. However, this approach implies strong central governance<br />
<strong>and</strong> inherits extensive administrative efforts. Furthermore, local business dem<strong>and</strong>s may not be<br />
recognized properly within the centralized project portfolio management. This raises the challenge of<br />
how the prioritization methodology should be structured.<br />
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3. Enriching IT performance measurement: Performance measurement is one of the essential parts of<br />
group IT evaluation. Most of the case study participants indicated that they generally only measure IT<br />
costs on the group level. Measurement of costs however, covers only the IT efficiency perspective. In<br />
general terms they measure: “Are we doing the things in the right way?” Going a step further, they do<br />
not measure their IT effectiveness on the group level, which would provide information about the<br />
impact on business process costs, specifically, value creation. In general terms this means: “Are we<br />
doing the right things?” All case study participants confirm that their performance measurement<br />
methodology, which is in place on the group level, is not sufficient. Furthermore, a significant part of<br />
the case study participants indicated that reporting is only conducted on a yearly basis. This leads to<br />
the fact that the IT cost report across the entire group is frequently issued at least four to eight months<br />
after the last IT investments of the previous fiscal year were carried out. Due to this late reporting in<br />
some participants’ organizations, IT executives have to make IT investment <strong>and</strong> budget decisions for<br />
the next fiscal year before they have read the last year’s IT cost report.<br />
4. Implementing IT evaluation st<strong>and</strong>ards <strong>and</strong> methodologies: Establishing <strong>and</strong> maintaining group-wide<br />
IT evaluation st<strong>and</strong>ards <strong>and</strong> methodologies is a key success factor (Barton, 2003). It enables<br />
comparability between the business entities with regards to their IT evaluation objects. Case study<br />
participants indicated multiple times that a group-wide st<strong>and</strong>ardized business case approach,<br />
including st<strong>and</strong>ardized metrics, is neither in-place nor does a process to follow up on business case<br />
results after a particular implementation exist. Furthermore, case study participants seek stable<br />
definitions of IT evaluation terms, e.g. IT cost definitions or an underlying chart of accounts. This is<br />
important in order to enable cross-year <strong>and</strong> cross-entity analysis of IT costs. In addition, case study<br />
participants criticize the lack of compatibility of management accounting systems <strong>and</strong> dem<strong>and</strong><br />
st<strong>and</strong>ardized interfaces to consolidate the IT cost <strong>and</strong> performance figures group-wide. Ideally,<br />
information is provided by a group-wide <strong>Management</strong> <strong>Information</strong> System (MIS).<br />
5. Bridging the gap between IT cost management <strong>and</strong> operational process cost management: All case<br />
study participants agreed on the need to establish a link between IT costs <strong>and</strong> operational process<br />
costs. However, only a few indicated that they are currently able to do so. One example would be the<br />
mapping of IT costs on applications or individual business process steps. Therefore, a holistic (IT)<br />
cost management approach is required. This means not only foc<strong>using</strong> on IT costs but also<br />
considering the total costs of a business process, since even a company with an IT cost disadvantage<br />
could at the same time have a total cost advantage. This approach, if consistently established across<br />
a federal organization based on group-wide generic business processes, would allow for internal<br />
cross-entity <strong>and</strong> external benchmark initiatives.<br />
3.3 Discussion<br />
The multiple case studies delivered promising findings <strong>and</strong> allowed us to derive our preliminary<br />
results. The organizational anchoring of group IT evaluation in business groups differs. The task<br />
definition itself differs from case to case slightly, but primary undertakings all overlap. Moreover, the<br />
group IT evaluation aims are similar to the aims of established IT evaluation approaches.<br />
Furthermore, the generic management accounting processes (planning, monitoring, <strong>and</strong> steering) are<br />
covered in both domains as well as the evaluation objects to some extent.<br />
The group IT evaluation embodiment is heavily influenced by the group IT governance. Therefore we<br />
came to the conclusion, the weaker the governance, the weaker the operative focus of group IT<br />
evaluation. Therefore, group IT evaluation generally has a strong strategic orientation. The findings<br />
showed that IT evaluation focuses much more on financial aspects (e.g. costs) than on technological<br />
facts (e.g. service levels). Therefore, similarities with legal-entity controlling are observable.<br />
Evaluation of the identified challenges from a holistic perspective shows that established instruments<br />
(e.g. IT project portfolio evaluation) are not able to be used within the group environment until<br />
fundamental adjustments are applied. Furthermore, the complex group environment impedes<br />
transparency <strong>and</strong> comparability of business entity IT cost <strong>and</strong> performance figures. The identified<br />
challenges lead us to the conclusion that either established IT management frameworks are not<br />
capable of meeting the requirements of group IT evaluation or a stringent group IT governance is not<br />
in place.<br />
We propose that the ideal implementation of a group IT evaluation methodology in business groups<br />
should be an arrangement of central <strong>and</strong> decentralized IT evaluation entities. Therefore, decentralized<br />
IT evaluation departments are responsible for local planning, steering <strong>and</strong> monitoring of IT resources<br />
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Florian Hamel, Thomas Ph. Herz, Falk Uebernickel <strong>and</strong> Walter Brenner<br />
<strong>and</strong> for providing st<strong>and</strong>ardized IT figures to the central or respective group IT evaluation. The group IT<br />
evaluation entity is responsible for supporting the alignment process between group business strategy<br />
<strong>and</strong> IT strategy. Furthermore, it is in charge of ensuring a group-wide efficient <strong>and</strong> effective usage of<br />
IT.<br />
4. Conclusion <strong>and</strong> outlook for further research<br />
<strong>Management</strong> of IT costs <strong>and</strong> performance is a central mean for strategic IT management, especially<br />
in business group environments. Our study specifically tries to address the important issue of the<br />
existing status quo of group IT evaluation [RQ.1] <strong>and</strong> expose some of the relevant challenges for this<br />
discipline [RQ.2].<br />
An explorative, multiple case study analysis based on interviews with seven multinational business<br />
groups, contributed new findings to the research topic. We discovered various task definitions <strong>and</strong><br />
approaches as well as organizational setups. It was revealed that that all participants face similar<br />
challenges in the area of group IT evaluation the most important of which include: ensuring groupwide<br />
availability of IT cost <strong>and</strong> performance figures; improving group-wide IT project portfolio<br />
management; enriching group-wide performance measurement; implementing group-wide IT<br />
evaluation st<strong>and</strong>ards <strong>and</strong> methodologies; <strong>and</strong> bridging the gap between IT cost management <strong>and</strong><br />
operational process cost management.<br />
Based on our findings, future research should focus on answering two key questions: “Are the<br />
identified challenges in a business group context addressed by established IT evaluation<br />
frameworks?” <strong>and</strong> “Is an essential group IT evaluation framework required?”<br />
One possible limitation of our study might be the case selection. Generalizability of the results could<br />
be improved by examining more cases <strong>and</strong> evaluation iterations. Among all case study participants,<br />
Company ALPHA plays a special role because we had access to significantly more documents <strong>and</strong><br />
information. This fact may have influenced our findings. However, we were aware of this circumstance<br />
<strong>and</strong> tried to judge each case study participant equally.<br />
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181
Distributed Working Pictures<br />
Martin Hill, John Salt <strong>and</strong> Graham Fletcher<br />
Cranfield University, Shrivenham, UK<br />
m.hill@cranfield.ac.uk<br />
jdsalt@gotadsl.co.uk<br />
g.fletcher@cranfield.ac.uk<br />
Abstract: Small co-located teams can share ‘Common Operating Pictures’ to enable high levels of cooperation<br />
<strong>and</strong> backup amongst the team members. However, when teams are large or distributed across poor<br />
communications networks, sharing operating pictures with all members of the team can consume so much<br />
communication resource <strong>and</strong> individual attention that it reduces the team’s effectiveness in accomplishing its<br />
task. This paper introduces the costs <strong>and</strong> benefits of distributing picture components, <strong>and</strong> ways of encouraging<br />
the communications to be appropriate <strong>and</strong> useful: to build sufficiently good common pictures amongst suitable<br />
team members for them to function. It follows that a ‘single picture of the truth’ is rarely desirable even when<br />
technically possible, <strong>and</strong> this paper shows why that is so. Building suitably distributed, shared <strong>and</strong> incomplete<br />
pictures requires sophisticated evaluation <strong>and</strong> management of information - information that may be real world<br />
observations or assessments of them. Underst<strong>and</strong>ing how such information needs are expressed <strong>and</strong> fulfilled in<br />
distributed teams should transfer across several information management <strong>and</strong> information exploitation<br />
disciplines.<br />
Keywords: distributed cognition, situation awareness, tactical pictures, single picture of the truth, common<br />
pictures, local operations pictures<br />
1. Introduction<br />
Coordinating large teams to carry out complicated tasks requires sharing underst<strong>and</strong>ing of the<br />
situation, but trying to tell everyone involved everything about the task is not always desirable, even<br />
when it is possible. Indeed, trying to tell everyone everything everywhere is obviously impossible,<br />
whether desirable or not.<br />
So to improve the performance of extended collaborating teams, we need to underst<strong>and</strong> where the<br />
edges of interested groups, physical constraints <strong>and</strong> suitable subjects interact to find out what needs<br />
to be shared with whom (‘just enough’) <strong>and</strong> what structures <strong>and</strong> languages can reduce cognitive <strong>and</strong><br />
communication loads while maintaining good coordination. The trade-offs between <strong>and</strong> alignments of<br />
good coordination, cognitive loads, distraction, informed decision making, resilience, framing, comfort,<br />
short-term success, long-term persistence, <strong>and</strong> so on are not straightforward. There are likely to be<br />
many local Goldilocks states (‘not too cold, not too hot; just right’) across multi-dimension trade-off<br />
surfaces. Acceptable trade-offs depend highly on the working environment, team <strong>and</strong> task.<br />
This paper argues that this evaluation is necessary (that attempting, for example, to share a ‘single<br />
picture of the truth’ is usually undesirable) <strong>and</strong> suggests a framework for that evaluation. It starts in<br />
section 2 by describing some working environments in order to give the reader some examples of<br />
what drives the information systems. In section 3 it introduces fairly well established models of shared<br />
team awareness of those environments. Section 4 goes on to list costs <strong>and</strong> benefits of sharing<br />
information, section 5 uses these to show that there are ‘natural’ extents of any particular working<br />
picture, <strong>and</strong> section 6 suggests ways of pushing these extents further out.<br />
2. Example working environments<br />
The work that produced this paper uses three case studies to represent a broad range of distributed<br />
collaboration environments: expert engineering collaborations, academic ‘scrum’ research, <strong>and</strong><br />
military ground operations.<br />
Military operations are a usefully ‘extreme’ working environment to study: communications are poor,<br />
intermittent <strong>and</strong> fragile, time constraints are hard <strong>and</strong> tight, outcome stakes are high, stress <strong>and</strong><br />
emotions are strong, consequences are ethically fraught, evidence is sparse, unreliable [Hill 2010]<br />
<strong>and</strong> drowned in clutter, knowledge sets are complex, <strong>and</strong> supporting systems are stripped-down yet<br />
mission- <strong>and</strong> safety-critical. This extreme environment helps to expose issues that can be significant<br />
in office environments but are masked by other effects.<br />
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Unlike some other operations that are somewhat similar – such as fire-fighting – military operations<br />
have opponent teams. Teams that compete <strong>and</strong> conflict with other teams not only collaborate <strong>and</strong><br />
cooperate within <strong>and</strong> between themselves, but attempt to do so better (in some way) than their<br />
opponents: they will attempt to ‘get inside the opponent’s decision cycles’, to disrupt the opponent’s<br />
awareness of the situation, <strong>and</strong> to protect against opponent attempts to disrupt their own. There may<br />
also be some merit in attempting to persuade opponents to compete instead of conflict, <strong>and</strong> to<br />
collaborate rather than compete.<br />
To reduce space, we focus in this paper on military examples that are readily differentiated from each<br />
other, can be represented by reasonably simple information models, <strong>and</strong> importantly are widely<br />
recognised due to the long-st<strong>and</strong>ing popularity of war films, newspaper articles <strong>and</strong> books.<br />
2.1 In the field (or building...)<br />
Soldiers in the field must spend their time observing the environment around them, looking for cues<br />
<strong>and</strong> clues for an enemy that is deliberately attempting to reduce them. The environment is often<br />
unfamiliar, the area not previously seen, <strong>and</strong> the detail heavily cluttered <strong>and</strong> three dimensional.<br />
To underst<strong>and</strong> this, consider for a moment your office or your house. Where are your immediate<br />
colleagues, or your neighbours? How would you describe the way to the bathroom, or where to find<br />
an item in the kitchen? Extend that to a small group of eight or so people strung out through adjacent<br />
rooms <strong>and</strong> consider where they are, how to get them, how to communicate with them, how to point<br />
out something specific outside the building. Directions <strong>and</strong> reference points depend heavily on<br />
obstacles, obvious common features, lines of sight, <strong>and</strong> the relative positions of the team members in<br />
the reference frames we mentally build to navigate, rather than a flat map.<br />
2.2 Tactical comm<strong>and</strong><br />
Mid-level comm<strong>and</strong>ers (who comm<strong>and</strong> from thirty to several hundred men) coordinate arrangements<br />
of people (actual <strong>and</strong> desired) <strong>and</strong> tend to model the situation as a ‘birds eye’ top-down view, like a<br />
map, analysed <strong>and</strong> interpreted as routes <strong>and</strong> barriers <strong>and</strong> fields of fire <strong>and</strong> areas of influence <strong>and</strong> so<br />
on. A civilian equivalent might be to use a satellite navigator in the car, or on foot.<br />
2.3 Logistics support<br />
Enabling the immediate task of destroying the enemy’s will to fight are the support services that<br />
provide the fighting comm<strong>and</strong> with the food, water, ammunition <strong>and</strong> other equipment required to carry<br />
out that task, <strong>and</strong> services such as casualty evacuation <strong>and</strong> medical care.<br />
This working environment is concerned with stuff: where it is, how much of it there is, what it is, how<br />
quickly it is consumed, what’s available to move it, <strong>and</strong> so on.<br />
2.4 Specialist<br />
Overlaid on the above ‘fighting’ comm<strong>and</strong> are various special interests. Signallers for example are<br />
responsible for maintaining the communication networks, <strong>and</strong> so have to share with each other their<br />
awareness of radio frequency overlaps, ranges, available equipment, encryptions, callsigns <strong>and</strong> so<br />
on.<br />
3. Underst<strong>and</strong>ing the environment<br />
The above section describes some of the different people who are attempting to collaborate with each<br />
other, both inside their groups <strong>and</strong> across them, <strong>and</strong> the environments they operate it. This section<br />
briefly describes models to represent how they underst<strong>and</strong> their environments <strong>and</strong> communicate them<br />
to each other.<br />
Considerable work is going into how we underst<strong>and</strong> the world around us [eg Endsley 1995] in order to<br />
inform our decision making [eg Klein 1999]. Our interest here is in the distribution of that<br />
underst<strong>and</strong>ing, recognised as currently insufficiently studied [eg Salmon 2010].<br />
For the purpose of this paper, we simplify this down into three components:<br />
An individual’s situation awareness. This is our underst<strong>and</strong>ing – a mental model - of what is going<br />
on in the real world. In practice this cannot be an objective model; it is necessarily a conceptual<br />
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approximation <strong>and</strong> includes our limited underst<strong>and</strong>ing of how the world works, what we would like<br />
it to be, <strong>and</strong> actions that might bring that about [Endsley 1995]. It is built out of experience of the<br />
world (including training exercises), information conveyed directly from others (such as brief<br />
descriptions), <strong>and</strong> ‘pictures’ often aggregated from several sources.<br />
Communicated information. <strong>Information</strong> informs: it modifies in some way the worldview of the<br />
informed. It contributes to the individual’s situation awareness.<br />
A shared picture. This is an assembly of information that acts as a reference model of particular<br />
aspects of the world, such as a map overlaid with symbols showing the location of friendly <strong>and</strong><br />
enemy units, or a link diagram showing the relationships between personalities in the local area<br />
[eg Checkl<strong>and</strong> 1981, Stanton 2010]. It might be used to hold a reference for the operator alone –<br />
an externalised piece of situation awareness – but is commonly used to communicate situation<br />
awareness from one operator to another.<br />
The interpretation of the picture therefore is vital to common team awareness; it has to be assimilated<br />
quickly (to avoid losing tempo), easily (to avoid consuming attention or encourage mistakes) <strong>and</strong><br />
unambiguously (to avoid translating into the wrong SA). The interpretation need not persist in the<br />
mind if the external picture (such as a map) can be referred to easily <strong>and</strong> reliably.<br />
Similarly, <strong>and</strong> for similar reasons, it should be quick <strong>and</strong> easy to create <strong>and</strong> communicate, with<br />
suitable support (training, procedures <strong>and</strong> equipment) to make it easy <strong>and</strong> unambiguous. Ambiguity,<br />
where each party can interpret a different picture from the same communication, can have<br />
devastating effects on the military when for example applying lethal force against the wrong targets.<br />
4. Language, dialect <strong>and</strong> scripts<br />
The above section outlined very briefly some ways of modelling collaborative underst<strong>and</strong>ing, <strong>and</strong> here<br />
we consider the mechanisms by which we share that underst<strong>and</strong>ing.<br />
Conveying a particular picture, or part of one, can be by several mechanisms. For example a voiced<br />
phrase (“Enemy: right of road, third telegraph pole, at base”) might also be represented as a symbol<br />
on a map. The semantics of this voice description <strong>and</strong> symbol are the same <strong>and</strong> possibly use the<br />
same language construction (grammatical relationships of location, time, motion, capability, intent,<br />
interaction <strong>and</strong> so on), but represented by different scripts.<br />
The different forms of picture <strong>and</strong> information exchange depend on the type of working environment,<br />
<strong>and</strong> there are different instances of them depending on the task. For example, field troops typically<br />
use the form of specific voiced phrases to exchange enemy locations, while mid-level comm<strong>and</strong>ers<br />
use map symbols <strong>and</strong> coordinates.<br />
A particular enemy location – an instance – might be shared by both those field troops in contact with<br />
them, <strong>and</strong> their mid-level comm<strong>and</strong>ers. That is, an instance of a particular picture may be represented<br />
<strong>and</strong> passed by several forms of pictures.<br />
However the different forms necessarily constrain <strong>and</strong> enable the passing of information in different<br />
ways: for example maps with symbols can provide a fast visual snapshot, from which we can rapidly<br />
extract patterns. It is a suitable medium on which to collect <strong>and</strong> aggregate individual reports to show<br />
an overall picture.<br />
Similarly therefore, a form of a picture may represent <strong>and</strong> pass several instances of pictures.<br />
The picture may also be conveyed by dialogue, for example to confirm intelligent receipt<br />
(paraphrasing rather than a simple acknowledgement), or perhaps to develop underst<strong>and</strong>ing about<br />
what information is required <strong>and</strong> what is available. Typically information in counter insurgency<br />
operations is less straightforward than the ‘enemy location <strong>and</strong> capability’ information in fighting<br />
operations. The details themselves include more complex interactions (“Mr Ahmed is trading poppies<br />
for guns”) <strong>and</strong> have to carry labels about where it came from <strong>and</strong> how this affects the detail (“so says<br />
Mr Mohammad, who’s brother is Mr Ahmed’s rival in coffee farming”).<br />
The information or dialogue must be in a commonly understood specific language (so meaning is<br />
established accurately <strong>and</strong> unambiguously), concise (to reduce the load on the mechanism of<br />
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conveying), related to the environment (so conveyed information relates to the right situation) <strong>and</strong><br />
timely (so that it’s not too late to use).<br />
Typically the languages <strong>and</strong> dialects are developed through training, realistic exercises <strong>and</strong><br />
experience, <strong>and</strong> so evolve appropriately. Rearranging organisations or re-tasking may require<br />
redeveloping the languages used to share awareness during task execution.<br />
The relationship between meaning, shared language, grammars, symbologies, intent <strong>and</strong> information<br />
in this environment could benefit from further exploration. There may be scope for a universal (or at<br />
least widespread) battle language, expressed in different forms depending on the task, environment<br />
<strong>and</strong> available communications technology.<br />
5. Sharing is not free<br />
While we might argue that shared knowledge across a team can – personality conflicts, goal<br />
incompatibility, judgement failure <strong>and</strong> so on aside – improve team effectiveness, ensuring that<br />
knowledge is in place <strong>and</strong> up to date is not free.<br />
5.1 Informing costs b<strong>and</strong>width<br />
When communication has used up all the available b<strong>and</strong>width, it stops or delays other<br />
communication. Anyone familiar with press-to-talk radios, or trying to send a mobile-phone text at new<br />
year, will be familiar with the problems of such overloads.<br />
Available b<strong>and</strong>width in military, police, emergency <strong>and</strong> similar working environments varies<br />
considerably. Radio communications are typically contended, low b<strong>and</strong>width, <strong>and</strong> intermittent, but<br />
when patrols come in to base they have access to rich information sets such as maps <strong>and</strong> direct<br />
dialogue with comm<strong>and</strong>ers <strong>and</strong> other patrollers. The detailed information exchanges <strong>and</strong> picture<br />
assembly are therefore done at base, with only relevant updates passed on by radio.<br />
5.2 Informing costs weight (or mobility)<br />
Remote communications requires communications equipment, <strong>and</strong> the longer, richer <strong>and</strong> farther the<br />
communication the more equipment is required. Batteries are a significant load on the foot soldier,<br />
<strong>and</strong> carrying more batteries means carrying less other equipment, or suffering performance<br />
degradation with consequent effects on mission capability. Ultimately, running out of power results in<br />
lost communications altogether.<br />
It is tempting therefore for comm<strong>and</strong> nodes to become static; deploy generators, fix antennas to make<br />
communications more reliable, set up offices to manage information more easily <strong>and</strong> comfortably, <strong>and</strong><br />
so on. Given the intent of forward armed forces might be summarised as “find, fix <strong>and</strong> finish”,<br />
succumbing to this temptation essentially self-finds <strong>and</strong> self-fixes the headquarters.<br />
5.3 Informing costs security<br />
Communication can be overheard. Voice <strong>and</strong> poorly encrypted tactical radio nets are noticeably<br />
vulnerable. Even if the content is not understood, the transmission itself can identify position <strong>and</strong><br />
sometimes unit <strong>and</strong> capability. Signals may be recorded <strong>and</strong> decoded ‘offline’ to reveal working<br />
practices <strong>and</strong> st<strong>and</strong>ard procedures. Radio silence is commonly applied to avoid such, thus blocking<br />
communication.<br />
In counter insurgency operations, where the threat from Improvised Explosive Devices (IEDs) is<br />
common, jammers are sometimes used to interfere with some device trigger mechanisms, <strong>and</strong> these<br />
in turn interfere with radios. Turning jammers off or moving out of range of them in order to<br />
communicate removes a layer of security.<br />
5.4 Informing, <strong>and</strong> being informed, costs attention<br />
It takes time to transmit any data, <strong>and</strong> this is time not spent doing. If that data informs – that is, it<br />
changes the informed’s world view – then it also takes time to assimilate. The more of it there is, the<br />
longer it takes to transmit, underst<strong>and</strong>, <strong>and</strong> adjust the world view.<br />
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This can become a significant impact on the cognitive load of both the informer <strong>and</strong> the informed.<br />
While informing, neither are doing or planning [Kramer].<br />
5.5 Informing obscures: Clutter<br />
While informing can distract (see below) it also obscures. Verbal communications can prevent other<br />
verbal communications from being heard, radio messages block other radio operators from <strong>using</strong> the<br />
channel, <strong>and</strong> it is common for symbols on maps to become so cluttered that it becomes difficult to<br />
distinguish them from each other, <strong>and</strong> in particular to distinguish the important ones from the less<br />
important ones.<br />
5.6 Distraction by detail<br />
More information is not necessarily better information; when detail is made easily available it can<br />
become a distraction from harder to process but still vital information [Yes Minister 1980]. Similarly,<br />
easily measurable <strong>and</strong> available detail may not be useful detail [Adler 2008]. As UAVs became<br />
common in theatre so did the video that they were streaming back, <strong>and</strong> anecdotally this rich <strong>and</strong><br />
immediate ‘Kill TV’ tended to distract staff supporting comm<strong>and</strong> posts.<br />
5.7 Distraction from detail<br />
More information is still not necessarily better information; when too many information feeds are being<br />
h<strong>and</strong>led, it becomes necessary to ‘skim’ them in order to keep the situation awareness up to date,<br />
<strong>and</strong> so to be able to plan <strong>and</strong> respond more quickly <strong>and</strong> usefully than the enemy. Timeliness can<br />
therefore be at the expense of missing important details.<br />
5.8 Distributing cognition<br />
Adding suitable experts to the picture constructions can be a benefit by reducing the load on the<br />
comm<strong>and</strong>er, by interpreting <strong>and</strong> combining several picture feeds into fewer, larger-grained feeds.<br />
However this also adds an extra layer of separation between the comm<strong>and</strong>er <strong>and</strong> the source, <strong>and</strong> can<br />
lead to several extra ‘hops’ between distributed peers that disconnect pictures.<br />
6. Natural picture extents<br />
The trade-offs between the above costs <strong>and</strong> benefits of sharing information lead to some ‘obvious’<br />
markers that suggest the extent to which either form or instance of pictures apply across an<br />
organisation.<br />
For example, the different environments described in section 2 above suggest different forms due to<br />
the constraints: voice <strong>and</strong> relative position descriptions for frontline soldiers, <strong>and</strong> map symbols for<br />
mid-level comm<strong>and</strong>ers. Overlapping areas <strong>and</strong> boundaries between them become translation points,<br />
so junior comm<strong>and</strong>ers have to translate the situation around them into global reference frames for<br />
their comm<strong>and</strong>ers, <strong>and</strong> vice versa for their subordinates.<br />
Similarly, specialist tasks tend to evolve specific concise phrases <strong>and</strong> terms for activities within those<br />
tasks that are useless or misunderstood elsewhere. For example, the word ‘repeat’ is used in British<br />
Army radio communications with the very specific meaning of repeating the last artillery fire mission,<br />
<strong>and</strong> so should not be used to request the repetition of, say, a voice message.<br />
The aggregation <strong>and</strong> reduced detail of picture instance as it is conveyed is largely limited by the<br />
communications mechanisms at the lower operations levels. Training <strong>and</strong> experience provide<br />
expertise for small teams to trade distraction against the need to keep peers <strong>and</strong> comm<strong>and</strong>ers<br />
informed.<br />
Shared culture provides common bonding <strong>and</strong> frequently common references for communicating, <strong>and</strong><br />
vice versa [eg Kirke 2009, Kirke 2004]. This culture might come from the soldiers’ backgrounds, <strong>and</strong><br />
recruiting regiments from common geographic areas provides a somewhat similar starting point. As<br />
teams work together they tend to evolve their own culture which, along with the bonding that is vital to<br />
this line of work, promotes tight concise underst<strong>and</strong>ing within the team but makes more difficult to<br />
collaborate with unfamiliar teams. The British Army therefore imposes some of its own common<br />
culture by drill, <strong>and</strong> enforces cross-team culture by combined training, but on the other h<strong>and</strong><br />
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encourages strong hierarchical competitive tribalism to support team cohesion under stressful<br />
circumstances.<br />
Some parts of pictures are deliberately not universally shared to maintain secrecy, such as the<br />
locations of special forces. However to ensure that they do not get fired upon when other troops are<br />
operating in their area, this location information must still be connect up with fire missions (or vice<br />
versa). Limiting the view of friendly locations however can be one contribution amongst many<br />
[Reason 2000] to fratricide, or ‘friendly fire’, as occurred in 1982 in the Falkl<strong>and</strong>s conflict when one<br />
special forces patrol attacked another.<br />
By contrast, some parts of pictures are deliberately shared further than immediately necessary, in<br />
case circumstances change <strong>and</strong> they must quickly contribute. All-informed nets allow comm<strong>and</strong>ers to<br />
eavesdrop on their peers, so that they can keep up with what is going on around them without having<br />
to have that information relayed via the headquarters (<strong>and</strong> so consume extra communication<br />
resources).<br />
Similarly, pictures are aggregated through chains of comm<strong>and</strong> so that comm<strong>and</strong>ers can underst<strong>and</strong><br />
the context <strong>and</strong> activities of particular events to inform their wider interactions <strong>and</strong> collaborations.<br />
7. Extending pictures<br />
The above 'natural' extents of forms <strong>and</strong> instances can sometimes be bridged or extended to reduce<br />
the translations between them.<br />
For example, technology can bypass the load on attention by automatically ‘reporting’ <strong>and</strong> translating<br />
certain information, such as the locations of friendly units <strong>using</strong> GPS. Automatic encryption, frequency<br />
hopping <strong>and</strong> queuing reduces the effort in communicating <strong>and</strong> improves reliability.<br />
This means that more detailed pictures can be built, <strong>and</strong> in turn we can expect increased load on<br />
attention. Technology can help here too, by providing displays that can be customised <strong>and</strong> filtered so<br />
that the viewer can focus (by removing clutter) on particular aspects of the picture.<br />
Automatic universal broadcast of some picture information however reduces the resilience of the<br />
information systems to attack. For example, if locations of all friendly units are ubiquitous across the<br />
organisation’s information systems, then a penetration anywhere in that system can expose the<br />
locations of all units.<br />
This must be balanced against the benefits of improved coordination at the ‘edges’ of the organisation<br />
where the hierarchical comm<strong>and</strong> structures can leave significant communication gaps between units<br />
close to each other on the ground. Neighbouring front-line units can be close to each other<br />
geographically but remote in both comm<strong>and</strong> <strong>and</strong> communication hops.<br />
Most pictures however only need to be partially ‘extended’, by aggregating <strong>and</strong> combining them into<br />
different pictures appropriate to the extended part of the organisation, or indeed beyond the<br />
organisation to collaborators. Some of these can be automatic, such as bundling up locations of<br />
individual units into one approximate location. Some are reasonably straightforward, such as <strong>using</strong><br />
liaison officers to act as ‘gateways’ between collaborating organisations with different cultural <strong>and</strong><br />
working practices. Some are more complex, such as planning <strong>and</strong> assembling intelligence, which<br />
tends to force staff to resort to slow <strong>and</strong> ambiguous natural language to convey these pictures.<br />
Research into supporting these complex picture distributions could improve their timeliness <strong>and</strong><br />
reduce their ambiguity.<br />
Defining the extent of a picture instance or form is not an exercise in isolation. It impacts on, <strong>and</strong> is<br />
impacted by, the tasks required, the structures of the organisation, the skills of the individuals,<br />
equipment available, <strong>and</strong> the operating environment. Changing the structure of parts of the<br />
organisation, for example by delegating mission responsibility to remote comm<strong>and</strong>ers, can radically<br />
affect the extents to which pictures need to be communicated.<br />
8. Conclusion<br />
In summary, pictures are used to support the shared situation awareness that is vital to good team<br />
coordination. Conveying a picture is not free however, <strong>and</strong> the consequences of blindly or<br />
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automatically conveying detailed pictures are not always beneficial. In particular, attempting to build<br />
single universal pictures across large organisations can heavily distract individuals from their tasks,<br />
create vulnerabilities to exposure, increase the logistics load, reduce the agility of the organisation to<br />
locally adapt to changing picture needs, <strong>and</strong> offers little practical benefit.<br />
It can be tempting to assume that improving information technology will solve problems with<br />
information sharing; we hope we have shown that in some circumstances more communications<br />
technology does not only not improve situation awareness but can detract from it. By describing<br />
characteristics about information sharing, information managers <strong>and</strong> exploiters can make a more<br />
informed decision about the suitable extent <strong>and</strong> form to which that information should be shared <strong>and</strong><br />
aggregated.<br />
References<br />
Adler R, Ewing J, Taylor P (2008), Citation Statistics, Joint Committee on Quantitative Assessment of Research,<br />
http://www.mathunion.org/fileadmin/IMU/Report/CitationStatistics.pdf<br />
Endsley, M.R. (1995) Toward a theory of situation awareness, Human Factors 37<br />
Checkl<strong>and</strong> P (1981) Rich Pictures, Soft Systems Methodology<br />
Hill, M <strong>and</strong> Salt, J (2010) Life & Death Decisions <strong>using</strong> Sparse, Unreliable Evidence, ECIME 2010 proceedings,<br />
http://www.martinhill.me.uk/pubs/LifeAndDeathWithSparseUnreliable.pdf<br />
Kirke, Charles (2009) Group Cohesion, Culture <strong>and</strong> Practice Armed Forces & Society,<br />
http://afs.sagepub.com/content/35/4/745.abstract<br />
Kirke, Charles (2004) Organisational Culture - The Unexpected Force Journal of Battlefield Technology<br />
Kramer, J Cohesion <strong>and</strong> Disintegration: American Forces in Vietnam, Strategy & Tactics #25<br />
Klein, G (1999) Sources of Power: How people make decisions, MIT Press<br />
Reason J (2000) Human error: models <strong>and</strong> management BMJ<br />
Paul M. Salmon; Neville A. Stanton; Guy H. Walker; Daniel P. Jenkins; Laura Rafferty (2010) Is it really better to<br />
share? Distributed situation awareness <strong>and</strong> its implications for collaborative system design. Theoretical<br />
Issues in Ergonomics Science.<br />
Stanton, McIlroy (2010) Designing mission communication planning: the role of Rich Pictures <strong>and</strong> Cognitive Work<br />
Analysis. Theoretical Issues in Ergonomics Science<br />
Jay A, Lynn J et al (1980) Yes Minister, Series 1 Episode 6 “The Right to Know”. BBC Television.<br />
188
Transforming <strong>Information</strong> to <strong>Knowledge</strong> is the Current<br />
Platform for a Successful Political Campaign<br />
Vered Holzmann <strong>and</strong> Ben Holzmann<br />
Tel Aviv University, Tel-Aviv, Israel<br />
veredhz@post.tau.ac.il<br />
benami1@post.tau.ac.il<br />
Abstract: This paper utilizes the data management systems of a political campaign to present a process that<br />
transforms structured <strong>and</strong> unstructured information into knowledge <strong>and</strong> discusses the various aspects of such a<br />
process in the world of political campaigns. A political campaign is a unique type of project that runs normally for<br />
a period of several months. It peeks on Election Day, <strong>and</strong> at the end of the day the project is abruptly terminated<br />
<strong>and</strong> its success, or its failure, is officially published. The project is considered a success if the c<strong>and</strong>idate who is its<br />
sole customer has obtained the majority of the votes casted. An official database that contains basic information<br />
about the eligible voting electorate is issued to every contestant at the beginning of the campaign. This original<br />
database is enriched during the project with information related to the voters, volunteers, budgets, events <strong>and</strong><br />
analyses results thus providing the corner stone for the knowledge structure supporting most of the project’s<br />
managerial decisions. In the quest to underst<strong>and</strong> the nature of knowledge management <strong>and</strong> its roots we limited<br />
our research to the specific arena of political campaigns, where we investigated the impact of the quality of the<br />
original data on the desired knowledge management tools derived from the various data analyses. Another issue<br />
we confronted dealt with the procedures of learning associated with the production of political campaign related<br />
knowledge, where we adopted the concept that knowledge management is a continuous <strong>and</strong> dynamic process<br />
which analyzes archived data from debriefings of past events in order to better underst<strong>and</strong> current trends <strong>and</strong><br />
incidents for the purpose of supporting a constant improvement of managerial decision making habits (Neef,<br />
2005). We further maintain that the efficiency of the knowledge management contribution to the decision making<br />
procedures depends heavily on the accuracy of the original debriefing process of every single incident (Roth <strong>and</strong><br />
Kleiner, 1998). The paper focuses on the analysis of a specific type of project, <strong>using</strong> a detailed description of a<br />
case study to present the nature of its unique characteristics <strong>and</strong> associated various problems. We hope that our<br />
research may contribute a minute addition to the body of knowledge of the two disciplines: information<br />
management <strong>and</strong> project management, <strong>and</strong> might encourage managers of political campaigns to instigate event<br />
debriefings <strong>and</strong> develop effective learning procedures in order to create a knowledge structure that could be<br />
utilized in future campaigns.<br />
Keywords: knowledge management; political campaigns; clustering; learning;<br />
1. Introduction<br />
The notion that an election is the modern democratic method, by which the majority of the members of<br />
any community exercise their power to choose their governing representatives <strong>and</strong> secure their<br />
preferences, is a fairy tale. In reality an election is decided by those who actually bothered to go to<br />
their assigned polling locations <strong>and</strong> actually casted their vote. Normally only a part of the eligible<br />
voting body plays the game. Thus, the outcome of the election represents the preferences of the<br />
majority of merely one segment of the total population, the segment that actually voted. Hence, every<br />
political campaign is in essence a fast track project designed to achieve two objectives. The first<br />
objective is to convince as many eligible voters as possible, that the particular c<strong>and</strong>idate shares most<br />
of their views, <strong>and</strong> will best represent their preferences while in office. The second objective is to<br />
collect <strong>and</strong> maintain a dynamic database containing all the necessary information to mobilize the<br />
entire body of team members, during Election Day, to persuade every supporter to go to his pre<br />
assigned polling station <strong>and</strong> actually cast his vote for the c<strong>and</strong>idate.<br />
A political campaign is extremely complicated to manage due to its rigid schedule, unstable budget<br />
frame, but mostly because of the nature of its employees that are traditionally volunteers. Only a few<br />
professionals can be hired to participate in the project, due to widespread constrains imposed on the<br />
project’s financing system which depends mostly on donations that are controlled by particularly rigid<br />
laws. While these chosen ones are assigned to perform unique political <strong>and</strong> managerial tasks, the<br />
bulk of the legwork is carried out by the volunteers who depend on accurate detailed information<br />
identifying the individuals they must convince to perform their voting duty.<br />
Political campaigns are driven by three engines, the density of the related media, the determination of<br />
the project’s foot soldiers <strong>and</strong> the quality of the project’s information management system. Alas, this<br />
paper investigates only the issue of the information management aspects <strong>and</strong> their part in the<br />
knowledge structure that provides the managerial tools for the campaign management.<br />
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We start with an introduction to the arena of political campaigns followed by a description of a typical<br />
project of this type. Then, we present the nature of the raw data that is available at the beginning of a<br />
political campaign, the additional data <strong>and</strong> information that could <strong>and</strong> should be collected throughout<br />
the campaign. We discuss the importance of the knowledge base accumulated during past<br />
campaigns <strong>and</strong> suggest an array of procedures to enrich the knowledge structure. We conclude with<br />
a presentation of a case study of an actual political campaign for the post of mayor of a large Israeli<br />
city, <strong>and</strong> offer a few comments regarding the contribution of the current research to the academic <strong>and</strong><br />
professional communities.<br />
2. <strong>Management</strong> of a political campaign<br />
Democracy, as we all know, is a form of government that is based on an equal power given to all<br />
citizens. This ancient system was originally initiated in the middle of the 5th century BC in ancient<br />
Greece <strong>and</strong> as of the first decade of the 21st century it is the most common system of government. In<br />
a Democracy, a free electoral system is required to enable the people to exercise their power by<br />
voting for the c<strong>and</strong>idate that will best represent them. In current electoral systems the winner at the<br />
end of the Election Day is not necessarily the one that has the support of the majority of the total<br />
population but rather the one that has the majority of the voters who actually exercised their privilege<br />
to vote. The results of these elections do not represent either the majority or their preferences<br />
(Przeworski et al., 2003).<br />
Political elections involve several major players who undertake different roles. First, <strong>and</strong> most<br />
important, are the voters. They include the total population of individuals who are eligible to exercise<br />
their right to elect a c<strong>and</strong>idate by voting for him on Election Day. In second place we find the<br />
institutional election committees <strong>and</strong> boards representing the authorities responsible for defining <strong>and</strong><br />
enforcing the relevant rules <strong>and</strong> procedures. In third place are the c<strong>and</strong>idates, who may be two or<br />
more individuals who run for office, with or without a party affiliation. Then, there are the campaign<br />
teams. These groups of people include political dignitaries, campaign committee members, campaign<br />
managers, advertising experts, strategy consultants, treasurers, personal aides, <strong>and</strong> an array of other<br />
volunteers forming a conglomerate of professions <strong>and</strong> experiences, who are all driven by a common<br />
motivation to win the election (Riker, 1986; Schofield et al., 1998; Shaw, 2000).<br />
Every political campaign is a different project. A project is defined as “a temporary endeavor<br />
undertaken to create a unique product, service, or result” (PMI, 2008, p.5). Although it is well<br />
established that “one size does not fit all” (Shenhar, 2001), we believe that the type of projects<br />
common in the political arena carry distinctive attributes <strong>and</strong> require a special effort in order to<br />
achieve their single objective of winning the election. A campaign has the most rigid schedule<br />
possible, with no option for delays or deviations, it ends on Election Day, hence defining the start <strong>and</strong><br />
finish of the project by an official governing board announcement, forcing the campaign team to plan<br />
<strong>and</strong> execute all the required activities within that predefined timeframe. Yet, a political campaign is an<br />
extremely dynamic project that is subject to numerous changes due to the high level of uncertainty<br />
that characterizes any political environment. Budget management in a political campaign is based on<br />
the quality of the donation management, which means that the budget is accumulated step by step<br />
<strong>and</strong> the project managers must adjust the project’s activities to fit the availability of funds at any stage.<br />
The pressure compelled by the budget constrains is actually only an introduction to constrains<br />
imposed on the management by the nature of the working teams that are mostly composed of a mix<br />
of volunteers, a few professionals <strong>and</strong> temporary hired help. The volunteers are normally difficult to<br />
manage, but do not strain the budget, while the professional <strong>and</strong> temporary employees are more<br />
restrained but are very hard to come by <strong>and</strong> might be extremely expensive (Newman, 1994; Trent <strong>and</strong><br />
Friedenberg, 2008).<br />
During the campaign project, the volunteers <strong>and</strong> professionals are working together to identify<br />
supporters. Figure 1 represents the major groups that play in the political campaign arena. Among the<br />
total eligible voters there are two major groups: those who are not interested in the election <strong>and</strong> will<br />
not be actually involved in the campaign <strong>and</strong> those who support or tend to support one of the<br />
c<strong>and</strong>idates. The first order of business is to identify those voters who are interested in the election<br />
<strong>and</strong> plan to cast their vote. Then, they are contacted in order to confirm the identify them as<br />
supporters, opponents, or undecided. The voters who are not yet sure about their vote, i.e., the<br />
undecided, should be approached personally in order to influence their decision. On Election Day the<br />
actual voters participate in the democratic process.<br />
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Total Eligible Voters<br />
C<strong>and</strong>idate X<br />
Supporters<br />
Undecided<br />
Actual Voters<br />
Not Interested<br />
C<strong>and</strong>idate Y<br />
Supporters<br />
Figure 1: The political campaign arena<br />
3. Data <strong>and</strong> information management in a political campaign<br />
Davenport <strong>and</strong> Prusak (1998) defined knowledge as “a fluid mix of framed experience, values,<br />
contextual information, <strong>and</strong> expert insight that provides a framework for evaluating <strong>and</strong> incorporating<br />
new experiences <strong>and</strong> information” (p.5). The framework of a political campaign follows the<br />
development of the accumulated data, which normally include discrete objective facts, transferred into<br />
information that provides quantitative <strong>and</strong> qualitative measurements, further transformed into<br />
knowledge, which can be utilized in the process of making strategic <strong>and</strong> operational decisions<br />
(Spiegler, 2003). Throughout the campaign lifecycle, knowledge is generated in order to provide the<br />
required background for making managerial educated decisions. The process starts with a file<br />
containing basic data that is distributed to all the contenders. On this common ground every campaign<br />
builds its unique information system that contains archived documentation of past events, relevant<br />
accumulated knowledge <strong>and</strong> current information procedures that can be developed into management<br />
tools.<br />
This original database includes normally only the following items: voter ID, first <strong>and</strong> last name, current<br />
address, <strong>and</strong> phone number. Although some philosophers raise potential ethical issues regarding<br />
citizen privacy (e.g., Onselen <strong>and</strong> Errington, 2004) the database is distributed to all the contenders<br />
<strong>and</strong> is used by the parties to effectively identify <strong>and</strong> reach supporters. It provides the basis to enrich<br />
the official information with additional data such as mobile phone numbers <strong>and</strong> an e-mail address,<br />
used to create the preliminary connection with the voters <strong>and</strong> to initiate a relationship with them. The<br />
data relating to the volunteers who are probably one of the major assets of every campaign <strong>and</strong><br />
represent the core resource used to promote the agenda established by the c<strong>and</strong>idate (Shaw, 2000),<br />
is more detailed <strong>and</strong> usually contains the following items: (1) personal information including<br />
demographic status; (2) list of communication means such as phones, e-mails, <strong>and</strong> Internet social<br />
networks; (3) areas of interests, which might range from a hobby such as basketball team fans to<br />
social activity membership such as PTA (parent-teacher association), or an association to a<br />
professional network such as a specific law firm. This extensive volunteer related data joined by an<br />
intensive operational network are used to generate knowledge in the form of profiles defining<br />
homogeneous groups of friends or groups with common interests that can be approached utilizing<br />
related unique issues.<br />
The database of voters merged into the database of volunteers is used to further identify clusters of<br />
voters that share common attributes or concerns that can be motivated to support the c<strong>and</strong>idate<br />
based on issues that are not necessarily the major concerns advertized by the c<strong>and</strong>idate but are<br />
rather subjects important to the particular group leader, hence, the members vote for the c<strong>and</strong>idate as<br />
a curtsey to their leader. The target is to create small groups of voters that can be approached <strong>and</strong><br />
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solicited through various channels of communication stressing subjects of common interests, thus,<br />
encouraging the members of these homogeneous groups to effectively contribute to the campaign.<br />
A single volunteer is normally nominated to represent all the group members <strong>and</strong> function as their<br />
speaker, <strong>and</strong> taking the responsibility to moderate the group’s performance while providing the<br />
campaign management with reliable classifications pertaining to the member’s positions <strong>and</strong> opinions<br />
regarding the c<strong>and</strong>idate’s behavior.<br />
Every methodology used to identify these different groups of prospective supporters hinges on the<br />
ability of the campaign’s analysts to utilize the continuously accumulated knowledge in order to<br />
update the specifications defining the criteria for the clustering processes. Cluster analysis was<br />
defined by Jain et al. (1999) as “the organization of a collection of patterns (usually represented as a<br />
vector of measurements, or a point in a multidimensional space) into clusters based on similarity”.<br />
Clustering is an advanced statistical method used to represent relationships, based on measures of<br />
proximity between elements, expressed by maximum distances between groups <strong>and</strong> minimal<br />
distances within each group. It suggests an unsupervised classification <strong>and</strong> grouping of similar<br />
objects into subsets that are determined by the clustering process itself. Implementation of clustering<br />
in management sciences is common in numerous applications including studies related to computer<br />
science <strong>and</strong> web information management (e.g., Choi <strong>and</strong> Peng, 2004; Adami et al., 2005; Chen &<br />
Hsu, 2006), supplier clusters related to collaborative learning <strong>and</strong> risk management (Hallikas et al.,<br />
2005), marketing issues (e.g., Malhotra <strong>and</strong> Peterson, 2001; Tsai <strong>and</strong> Chiu, 2004), <strong>and</strong> others. Each<br />
of these cluster analyses requires a distinct determination of the clustering technique (i.e, choosing<br />
the most suitable algorithm such as single linkage (nearest neighbor), complete linkage (furthest<br />
neighbor), average (between groups) linkage, Ward’s method, or binary-positive approach) (Lorr,<br />
1983; Aldenderfer <strong>and</strong> Blashfield, 1984).<br />
We chose for the current study a clustering method characterized by the binary-positive approach,<br />
where the distance is defined by a positive attribute index based on the presence (1) or absence (0)<br />
of an attribute value for each case. The cluster dataset is a two dimensional matrix composed of<br />
cases on one axis <strong>and</strong> features on the other. The entries of the matrix are either ‘1’, if the case has<br />
the specific feature, or ‘0’, if the case lacks that feature. Based solely on the positive vector, two<br />
indexes are calculated: the Pair Similarity Index (PSI) that measures similarity between cases, <strong>and</strong><br />
the Group Similarity Index (GSI) that measures similarity within a group of cases (Gelbard <strong>and</strong><br />
Spiegler, 2000; Gelbard et al., 2007).<br />
In the research analysis of the political campaign, the entities for clustering were the individual eligible<br />
voters <strong>and</strong> the attributes were their various traits <strong>and</strong> characteristics including age, gender,<br />
neighborhood, profession, habits, etc, that qualified the clustering procedures. For each attribute we<br />
defined a set of possible values <strong>and</strong> every voter was either assigned to this sub-attribute or not. We<br />
started with the identification of clusters of voters based on geographic locations in order to create<br />
homogeneous groups of citizens that have similar local oriented interests. Other groups were<br />
clustered base on common demographics such as place of employment, similar professions, common<br />
religious preferences or an interest in sports. Another powerful method to identify homogenous<br />
groups of supporters is derived from analyzing historical voter behavioral trends which is part of the<br />
knowledge base that the information management professional bring to every campaign. The<br />
efficiency of the clustering that produces the profiles of the various groups depends heavily on the<br />
quality of the learning process that is responsible for building <strong>and</strong> updating the knowledge structure.<br />
There is a positive linear relationship between the effort assigned to the debriefing <strong>and</strong> archiving<br />
process of past occurrences <strong>and</strong> the value of their contribution to the development of a good<br />
mitigation plan to head off future similar events. Continuous learning is m<strong>and</strong>atory for constructing a<br />
solid process responsible for the transformation of information into knowledge, which in turn is further<br />
transformed into effective managerial tools. Voter segmentation is the basis of every successful<br />
political marketing campaign because the c<strong>and</strong>idate is not perceived equally by all voters (Newman,<br />
1994). Clustering <strong>and</strong> profiling voters into homogeneous groups enables the marketing professionals<br />
of the campaign to present a different aspect of the c<strong>and</strong>idate for the different groups of voters,<br />
hence, gaining a wider collection of supporters.<br />
The impact of poor quality data <strong>and</strong> a lack of a good structure of knowledge in any organization are<br />
manifested in increased cost, lower customer <strong>and</strong> employee satisfaction, <strong>and</strong> difficulties to set <strong>and</strong><br />
execute strategy (Redman, 1998). The impact of poor quality of data <strong>and</strong> a lack of a good structure of<br />
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knowledge in a political campaign that runs for only a few months is devastating since the campaign<br />
is a relatively short-term endeavor, where any sensitive wrong decision, made based on inaccurate<br />
information, can cause not only inefficient effort allocation, but may be directly responsible for a fatal<br />
error that might lead to a total failure.<br />
4. Case study: The campaign for mayor<br />
The following case study demonstrates the process of managing data, information <strong>and</strong> knowledge in<br />
a political campaign. The city is located ten miles south of Tel Aviv, which is the largest metropolis in<br />
Israel. It has 270,000 inhabitants eligible to vote in the mayoral race. An initial survey revealed that<br />
the city is extremely segregated <strong>and</strong> most of the old parts of the city that house people of middle to<br />
low income, do not support our c<strong>and</strong>idate. Based on a series of surveys, extensive archived data<br />
mining, <strong>and</strong> a thorough investigation of the available knowledge structure, we further understood that<br />
socio-demographic characteristics will dominate the preferences of the citizens’ decision making<br />
process. Thus, we planned a campaign that focused on a solid commitment to perform a drastic<br />
change in the taxation methodology introduced by the previous mayor. We had the advantage of<br />
attacking the performance of a mayor in office <strong>and</strong> could offer a management revolution, so we<br />
developed a strategy that initiated a desire for a revolution <strong>and</strong> fuelled the people’s expectations until<br />
Election Day. Our campaign management team consisted of an operations manager, an information<br />
manager, a manager in charge of the volunteers, a manager in charge of advertising <strong>and</strong> a political<br />
expert. We had a total of 60 working days, but we assumed a ten day loss, so we set all efficiency<br />
<strong>and</strong> effectiveness performance tests on a production of an average gain of new supports per day for<br />
the duration of the campaign. The number of supporters required was estimated based on the<br />
assumption that the percentage of voters that will actually come to vote will be similar to participation<br />
in previous elections, thus we estimated a turnaround of 150,000 voters, out of which we need 75,000<br />
on our side in order to win. But we further estimated that we cannot expect more than 70% of our<br />
supporters to actually show up <strong>and</strong> vote. Hence, we decided to set the goal of collection for at least<br />
110,000 supporters, or 2,200 new supporters per working day. We never gained 2,200 new voters<br />
during one single day, but the accumulative value did not deviate from the target by more than 3%<br />
throughout the campaign. Our methodology was based on creating social networks that contained<br />
groups of homogenous members with a common interest in an issue that received a direct publicized<br />
attention from our c<strong>and</strong>idate. Municipal social networks were based on preferences for an education<br />
system in elementary schools, resistance to road interchange construction, etc. The system promoted<br />
within the various groups expectations regarding their preferences <strong>and</strong> encouraged them to support<br />
the c<strong>and</strong>idate. Every network was initiated either by a volunteer or by a hired professional who<br />
enticed friends or colleagues to join the group on the basis of their mutual interest rather than a<br />
common believe in the c<strong>and</strong>idate. These friends <strong>and</strong> colleagues continued the process, through the<br />
initiation <strong>and</strong> assembly of sub-groups, until the group reached 150 members. The information team<br />
recorded <strong>and</strong> updated the data for each one of the members into a database <strong>and</strong> produced daily<br />
reports indicating the status of the various allocated measurements. When a group reached saturation<br />
it was assigned to a manager who was responsible to persuade <strong>and</strong> assist each one of the members<br />
to come <strong>and</strong> vote on Election Day. During that day we monitored the actual voting in each ballot-box<br />
<strong>and</strong> identified groups that did not meet the target numbers. In such cases we increased pressure on<br />
the group manager to bring sufficient number of supporters to vote. In cases where this was not<br />
applicable, we diverted the pressure towards group leaders that had already proved themselves as<br />
efficient agents <strong>and</strong> we asked them to take an extra effort to bring supporters to actually vote. The<br />
system worked <strong>and</strong> we won the election.<br />
5. Discussion <strong>and</strong> conclusions<br />
The political arena is new to the information management body of knowledge <strong>and</strong> suffers from a gap<br />
in related literature (Rohrschneider, 2002). Hence, it offers a substantial variety of research <strong>and</strong><br />
implementation opportunities for information management professionals. The political campaign is a<br />
project of a very unique nature: it is short <strong>and</strong> aggressive, mainly based on volunteers, <strong>and</strong> it requires<br />
intensive professional work in order to succeed. Thus, it represents an array of interesting job<br />
opportunities in the various fields of management in general <strong>and</strong> in the field of information<br />
management in particular <strong>and</strong> provides adequate data for academic research.<br />
Throughout our research we found very little academic literature <strong>and</strong> encountered a rather serious<br />
lack of empirical procedures or investigating tools to guide managers participating in most aspects of<br />
communication within the political arena. We found literature discussing the issues of data mining <strong>and</strong><br />
classifications as a catalysis agent in advancement of customer relationship analyses methods (e.g.,<br />
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Shaw et al., 2001), normally related to marketing campaigns. We claim that these concepts <strong>and</strong><br />
procedures hold true, in many aspects, in political campaigns. The attributes <strong>and</strong> preferences of<br />
eligible voters regarding a c<strong>and</strong>idate can be analyzed in a similar way to customer behavior regarding<br />
a specific product. Although the current study might not be very well supported by literature in the field<br />
of knowledge management in political projects, it enjoys the aroma of success, as described in the<br />
paper.<br />
Another important issue that we encountered during our research, but remained outside the scope of<br />
this research, is the impact of the new media on the planning <strong>and</strong> executing of a political campaign.<br />
We incorporated the usage of a dedicated website <strong>and</strong> a sophisticated employment of the major<br />
social networks, but lacked the methodology required to effectively communicate with potential voters<br />
(customers) <strong>and</strong> motivate or even entice them to respond ardently to our massages. Related literature<br />
points out that the introduction of the Internet into the political campaign communication systems<br />
(Trent <strong>and</strong> Friedenberg, 2008) set new affecting variables that campaign managers should take into<br />
account. These studies advise that the impact of various Internet tools including websites <strong>and</strong> social<br />
networks on the quality of the campaign databases might change the current common avenues of<br />
communicating massages (Williams <strong>and</strong> Gulati, 2006). We cannot confirm these allegations, but we<br />
can testify that we allocated about a third of our resources, of the described campaign funds <strong>and</strong><br />
manpower, to communication with the younger prospective voters via the new media. Although we<br />
gained their support, we have no tools to measure the effectiveness or the efficiency of the process<br />
<strong>and</strong> we lack the means to analyze our choice of ingredients or their allocation throughout the<br />
campaign. There is no doubt that a significant change is in the works, <strong>and</strong> the Internet is becoming<br />
the best <strong>and</strong> least expensive platform to communicate with the prospective voters, thus altering the<br />
current procedures of building the campaign database <strong>and</strong> its related knowledge structure, but most<br />
of the details are yet to be investigated. Nevertheless we believe that further research might be<br />
extremely advantages to the information management professional community.<br />
References<br />
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Aldenderfer, M.S., <strong>and</strong> Blashfield, R.K., (1984) Cluster analysis (Series: Quantitative Applications in the Social<br />
Sciences), Sage, Beverly Hills, CA.<br />
Bannon, D.P., (2004) “Marketing Segmentation <strong>and</strong> Political Marketing”, PSA (Political Science Association)<br />
Annual Conference, 5-8 April 2004, UK.<br />
Chen, T.S., <strong>and</strong> Hsu, S.C., (2006) “Mining Frequent Tree-like Patterns in large Datasets”, Data & <strong>Knowledge</strong><br />
Engineering, Vol.62, Iss.1, pp.65-83.<br />
Choi, B., <strong>and</strong> Peng, X., (2004) “Dynamic <strong>and</strong> Hierarchical Classification of Web Pages”, Online <strong>Information</strong><br />
Review, Vol.28, No.2, pp.139-147.<br />
Davenport, T.H., <strong>and</strong> Prusak, L. (1998) Working <strong>Knowledge</strong>. How Organizations Manage What They Know,<br />
Harvard Business School Press Boston, Mass.<br />
Gelbard, R., <strong>and</strong> Spiegler, I., (2000) “Hempel’s Raven Paradox: A Positive Approach to Cluster Analysis”,<br />
Computer <strong>and</strong> Operations Research, Vol.27, Iss.4, pp.305-320.<br />
Gelbard, R., Goldman, O., <strong>and</strong> Spiegler, I., (2007) “Investigating Diversity of Clustering Methods: An Empirical<br />
Comparison”, Data & <strong>Knowledge</strong> Engineering, Vol.63, Iss.1, pp.155-166<br />
Hallikas, J., Puumalainen, K., Vaeserinen, T., <strong>and</strong> Virolainen, V.M., (2005) “Risk Based Classification of Supplier<br />
Relationships”, Journal of Purchasing & Supply <strong>Management</strong>, Vol.11, No.2-3, pp.72-82<br />
Jain, A.K., Murty, M.N., <strong>and</strong> Flynn, P.J., (1999) “Data Clustering: A Review”, ACM Computing Surveys, Vol.31,<br />
No.3, pp.264-323.<br />
Kerzner, H., (2006) Project <strong>Management</strong>: A System Approach to Planning, Scheduling, <strong>and</strong> Controlling, 9th ed.,<br />
John Wiley & Sons, Hoboken, New Jersey.<br />
Lorr, M., (1983) Cluster Analysis for Social Scientists, Jossey-Bass Publishers, San Francisco, CA.<br />
Malhotra, N.K., <strong>and</strong> Peterson, M., (2001) “Marketing Research in the New Millennium: Emerging Issues <strong>and</strong><br />
Trends”, Marketing Intelligence & Planning, Vol.19, No.4, pp.216-235<br />
Mcclurg, S.D., (2011) “Social Networks <strong>and</strong> Political Participation: The Role of Social Interaction in Explaining<br />
Political Participation”, Political Research Quarterly, Vol.56, No.4, pp.449-464.<br />
Neef, D., (2005) “Managing Corporate Risk through Better <strong>Knowledge</strong> <strong>Management</strong>”, The Learning Organization,<br />
12(2): 112-124.<br />
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Publication, London, UK.<br />
Onselen, P., <strong>and</strong> Errington, W., (2004) “Electoral Databases: Big Brother or Democracy Unbound?”, Australian<br />
Journal of Political Science, Vol.39, No.2, pp. 349-366.<br />
PMI St<strong>and</strong>ards Committee (2008) A Guide to the Project <strong>Management</strong> Body of <strong>Knowledge</strong> 4 th ed. (PMBOK®<br />
Guide), Project <strong>Management</strong> Institute, Newtown Square, Pennsylvania.<br />
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Vol.41, No.2, pp.79-82.<br />
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Electoral Studies, Vol.21, No.3, pp. 367-382.<br />
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for Marketing” Decision Support Systems, Vol.31, No.1, pp. 127-137.<br />
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<strong>Management</strong> Science, Vol. 47, No.3, pp. 394-414.<br />
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40, No.6, pp.533-539.<br />
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Rowman & littlefield Publishers Inc, Playmouth, UK.<br />
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Elections”, Annual Meeting of the American Political Science Association, Chicago, IL, Aug 30, 2007.<br />
195
Theoretical Discussion: Green IT <strong>and</strong> its Development in<br />
South Africa<br />
Grant Howard 1 <strong>and</strong> Sam Lubbe 2<br />
1 School of Computing, UNISA, Florida, South Africa<br />
2 North-West University, Mafikeng, South Africa<br />
Grant.Howard@vodamail.co.za<br />
Sam.Lubbe@nwu.ac.za<br />
Abstract: The Human Race depends on Earth’s finite natural resources for its survival. Green literature claims<br />
that Green principles <strong>and</strong> practices are a necessity to sustain Earth’s finite natural resources. In contrast, anti-<br />
Green literature refutes these claims. Green IT or Green <strong>Information</strong> Technology is a view on <strong>Information</strong><br />
Technology (IT) as it relates to Green principles <strong>and</strong> practices. IT is seen as a contravener <strong>and</strong> promoter of<br />
Green principles <strong>and</strong> practices. Green IT proposes radical IT changes to minimise contraventions <strong>and</strong> maximise<br />
promotions of Green principles <strong>and</strong> practices. Importantly, these changes have significant environmental,<br />
economic, <strong>and</strong> social consequences, both negative <strong>and</strong> positive. Specifically, IT is seen as a contravener of<br />
Green principles <strong>and</strong> practices primarily by the production of electronic waste (e-waste) <strong>and</strong> the consumption of<br />
paper <strong>and</strong> energy resources. In contrast, IT is seen as a promoter of Green principles <strong>and</strong> practices by its ability<br />
to reduce environmental impacts in all facets of society through information production <strong>and</strong> alternative processes<br />
creation. Worldwide <strong>and</strong> especially in the South African context, Green IT research is scant. This paper aims to<br />
reduce this gap by providing a theoretical discussion about Green IT <strong>and</strong> its development in South Africa. The<br />
objective of this paper is to present <strong>and</strong> explore the salient theoretical constructs relating to Green IT in order to<br />
provide a coherent view on Green IT <strong>and</strong> Green IT in South Africa. The conclusion will be in the form of a<br />
conceptualisation of Green IT <strong>and</strong> Green IT in South Africa. The point of departure for this paper is green<br />
literature, both supporting literature <strong>and</strong> opposing literature. This is critical because Green principles <strong>and</strong><br />
practices are the theoretical foundation for Green IT. Thereafter Green IT <strong>and</strong> Green IT in South Africa are<br />
explored. This paper will give the reader a considered inspection of Green IT, its development in South Africa,<br />
<strong>and</strong> its relationship to Green principles <strong>and</strong> practices.<br />
Keywords: environment; green IT; green principles <strong>and</strong> practices; IT sustainability; South Africa<br />
1. Introduction<br />
The theoretical discussion about Green IT <strong>and</strong> its development in South Africa is based on current,<br />
relevant research. Green IT research is gaining impetus, however there is still much to address. The<br />
following theoretical discussion is a synthesis of relevant, contemporary themes <strong>and</strong> provides a<br />
coherent perspective on Green IT <strong>and</strong> its development in South Africa.<br />
Following the introduction is a description of the methodology employed. Thereafter the theoretical<br />
discussion is presented. The theoretical discussion follows the high-level logic presented in Table 1.<br />
The high-level logic is formed from the relevant themes presented in Table 2.<br />
Table 1: High-level logic of the paper<br />
# Relevant themes<br />
High-level logic<br />
Green Principles <strong>and</strong><br />
Practices<br />
Anti-Green<br />
Green IT Introduction<br />
IT as a Green Contravener<br />
<strong>and</strong> Green Promoter<br />
Environmental sustainability X<br />
Global warming X<br />
Natural climate change X<br />
Green for profit only X<br />
Green IT/IS X<br />
IT as a Green contravener X<br />
IT as a Green promoter X<br />
Product life-cycle changes X<br />
Consumption changes X<br />
196<br />
Radical IT Changes<br />
Environmental, Economic,<br />
<strong>and</strong> Social Consequences<br />
Development of Green IT in<br />
South Africa
Grant Howard <strong>and</strong> Sam Lubbe<br />
High-level logic<br />
Green Principles <strong>and</strong><br />
Practices<br />
# Relevant themes<br />
Environmental, economic, <strong>and</strong> social<br />
sustainability<br />
X<br />
Economic <strong>and</strong> social consequences X<br />
Africa X<br />
South Africa X<br />
2. Methodology<br />
The theoretical discussion is based on current, relevant literature obtained from the following search<br />
engines: Google <strong>and</strong> Google Scholar, the Association for Computing Machinery (ACM) digital library,<br />
the Association for <strong>Information</strong> Systems elibrary. In addition, related links <strong>and</strong> references were<br />
assessed. Keywords relating to Green IT <strong>and</strong> Green IT in South Africa were used, including: anti-<br />
/Green/sustainable/environment IT/ICT/computing /South Africa; <strong>and</strong> environmental sustainability. A<br />
qualitative approach was adopted where the literature was selected based on relevance <strong>and</strong> search<br />
engine ranking. The selected literature was then analysed for themes relating to the topic of the<br />
paper. Table 2 is the analysis of relevant themes per reference. Further, Table 1 shows how the<br />
relevant themes presented in Table 2 are grouped to form the high-level logic of the theoretical<br />
discussion. The theoretical discussion is based entirely on the references shown in Table 2. Table 2<br />
acknowledges <strong>and</strong> directly credits all authors for their work where it is used in the theoretical<br />
discussion.<br />
Table 2: Analysis of relevant themes per reference<br />
Relevant themes<br />
Environmental sustainability<br />
Global warming<br />
Natural climate change<br />
Green for profit only<br />
Anti-Green<br />
Green IT/IS<br />
IT as a Green contravener<br />
Green IT Introduction<br />
IT as a Green promoter<br />
IT as a Green Contravener<br />
<strong>and</strong> Green Promoter<br />
Product life-cycle changes<br />
Consumption changes<br />
Radical IT Changes<br />
Environmental, Economic,<br />
<strong>and</strong> Social Consequences<br />
Environmental, economic, <strong>and</strong><br />
social sustainability<br />
Economic <strong>and</strong> social<br />
consequences<br />
Africa<br />
# References<br />
Amsel & Tomlinson, 2010 X X<br />
Baek & Chilimbi, 2010 X<br />
Belliethathan, Weldesemaet & Asfaw,<br />
2008<br />
X X X<br />
X<br />
Beloglazov & Buyya, 2010) X X<br />
Bianzino, Raju & Rossi, 2011 X<br />
Blevis, 2008 X X X X X<br />
Bondolfi, 2007 X X<br />
Cai, 2010 X X X<br />
Corbett, 2010 X X X X<br />
Davis, 2010 X<br />
DiSalvo, Sengers & Brynjarsdóttir,<br />
2010<br />
X<br />
Dourish, 2010 X X X X<br />
Easterbrook, 2010 X X X<br />
Easterbrook, Glenn, Ar<strong>and</strong>a &<br />
Pipitone, 2009<br />
X X<br />
Easterbrook, Mens & Zschaler, 2010 X X<br />
Eder, 2009 X<br />
Elliot, 2007 X X X X X<br />
Foster, Lawson, Blythe & Cairns, 2010 X X<br />
197<br />
Development of Green IT in<br />
South Africa<br />
South Africa
Grant Howard <strong>and</strong> Sam Lubbe<br />
Relevant themes<br />
Environmental sustainability<br />
Global warming<br />
Natural climate change<br />
Green for profit only<br />
Green IT/IS<br />
IT as a Green contravener<br />
IT as a Green promoter<br />
Product life-cycle changes<br />
Consumption changes<br />
Environmental, economic, <strong>and</strong><br />
social sustainability<br />
Economic <strong>and</strong> social<br />
consequences<br />
Africa<br />
# References<br />
Froehlich, Dillahunt, Klasnja, Mankoff,<br />
Consolvo, Harrison & L<strong>and</strong>ay, 2009<br />
X X<br />
Goodman, 2009 X X X<br />
Green Computing, 2008 X X X X<br />
Green Computing <strong>and</strong> D-Link, 2007 X X X<br />
Green Goal Progress Report, 2010 X<br />
Hamilton, 2010 X X X X<br />
Herrick & Ritschard, 2009 X X X X<br />
Hirsch & Anderson, 2010 X<br />
Hirsch, Sengers, Blevis, Beckwith &<br />
Parikh, 2010<br />
X X X<br />
Horner, 2008 X X<br />
Kargupta, Gama & Fan, 2010 X X<br />
Keshav & Rosenberg, 2010 X<br />
Kuo & Dick, 2009 X X X X<br />
Leong & Brynskov. 2009 X<br />
Mahadevan Banerjee & Sharma, 2010<br />
Mankoff, Blevis, Borning, Friedman,<br />
X X<br />
Fussell, Hasbrouck, Woodruff &<br />
Sengers, 2007<br />
X<br />
Mann, Muller, Davis, Roda & Young,<br />
2010<br />
X X X<br />
Mann & Smith, 2008 X<br />
Mattern, Staake & Weiss, 2010 X X X X X<br />
Melville, 2010 X X X X X<br />
Milloy, 2009 X X<br />
Molla, 2008 X X X X<br />
Molla & Cooper, 2009 X X X X X X<br />
Molla Pittayachawan & Corbitt, 2009 X X X X<br />
Murugesan, 2008 X X X X X X X<br />
Nathan, 2010 X X X X X X<br />
Nathan, Friedman & Hendry, 2009 X X X X X<br />
National Climate Change Response<br />
Green Paper, 2010<br />
X X<br />
Padayachee, 2008 X X X X<br />
Philipson, 2010 X X X X<br />
Pierce, 2009 X<br />
Qureshi, Weber, Balakrishnan, Guttag<br />
& Maggs. 2009<br />
X X<br />
Schmidt, Schmidtchen, Erek, Kolbe &<br />
Zarnekow, 2010<br />
X X<br />
Schwartz, Betz, Ramirez & Stevens,<br />
2010<br />
X X X X<br />
Smith & Perks, 2010 X X X X X<br />
A strategy for a developmental green<br />
economy for Gauteng, 2010<br />
X X X<br />
Tebbutt, Atherton & Lock, 2009 X<br />
Tomlinson, 2010 X X X<br />
The United Nations Conference<br />
Climate Change Conference, 2010<br />
X X<br />
Vykoukal, 2010 X X X X<br />
Watson, Boudreau & Chen, 2010 X X X X X X X X X X<br />
Weiss, 2007 X X X X X<br />
Williams & Curtis, 2008 X X X<br />
Woodruff, Hasbrouck & Augustin,<br />
2008<br />
X X<br />
198<br />
South Africa
3. Theoretical discussion<br />
3.1 Green principles <strong>and</strong> practices<br />
3.1.1 Environmental sustainability<br />
Grant Howard <strong>and</strong> Sam Lubbe<br />
Green principles <strong>and</strong> practices aim for environmental sustainability. The rationale for environmental<br />
sustainability is the future survival of Humans on planet Earth. Our survival is completely dependant<br />
on the environment <strong>and</strong> so the environment must be used in a manner that is sustainable. A<br />
sustainable environment will occur when the environment can regenerate at the same rate that we<br />
consume it. Green principles <strong>and</strong> practices embody principles <strong>and</strong> practices for every aspect of life to<br />
achieve environmental sustainability. The word Green represents environmental sustainability.<br />
3.1.2 Global warming<br />
A serious environmental sustainability concern is dangerous anthropogenic climate change,<br />
specifically global warming, caused by atmospheric Greenhouse Gasses (GHGs); such climate<br />
change has dire projections for our survival. GHGs include water vapour, carbon dioxide (CO2),<br />
methane, nitrous oxide, ozone, <strong>and</strong> chlorofluorocarbons. Electricity generation is a leading cause of<br />
CO2 emissions. Other notable environmental sustainability concerns are pollution <strong>and</strong> the<br />
consumption of natural resources. In addition, the exponential growth rate of the Human population<br />
makes environmental sustainability more complex.<br />
3.2 Anti-Green<br />
3.2.1 Natural climate change<br />
Climate change is a natural phenomenon with low impacts, <strong>and</strong> Human activities do not have a<br />
significant effect on climate change. Measuring cause <strong>and</strong> effect of anthropogenic climate change is<br />
complex <strong>and</strong> debatable. Green principles <strong>and</strong> practices are nothing more than a new, powerful,<br />
political movement designed to control society <strong>and</strong> profit the elite Green.<br />
3.2.2 Green for profit only<br />
Indeed, there is more advertising than actual scientific evidence behind Green technology products.<br />
An estimate on the Green technology service market is that it will be in the billions of United States<br />
Dollars (USD). Organisations are <strong>using</strong> the term Green to increase sales revenue as they are seen to<br />
be environmentally responsible although it is just Green washing. An increased production <strong>and</strong><br />
consumption of more Green products to replace less Green products will increase profits through the<br />
Green markets but make the problem worse.<br />
These anti-Green claims exist, but the majority of literature that was returned by the search supports<br />
the concept that Green principles <strong>and</strong> practices are necessary for the survival of the Human race. The<br />
paper presents the anti-Green claims not as a central debate, but as a point of departure. The paper<br />
acknowledges the anti-Green arguments <strong>and</strong> does not seek to verify the arguments. The paper relies<br />
on the volume <strong>and</strong> quality of literature that was returned by the search as confirmation that Green<br />
principles <strong>and</strong> practices are necessary for the survival of the Human race. The subsequent sections of<br />
the paper continue from this confirmation.<br />
3.3 Green IT introduction<br />
3.3.1 Green IT/IS<br />
Green IT is IT in relation to environmental sustainability. Green IT is Green principles <strong>and</strong> practices<br />
applied to IT to achieve environmental sustainability. IT is utilized by individuals <strong>and</strong> organisations<br />
throughout the world. Indeed IT plays an essential role in society <strong>and</strong> is a critical factor for economic<br />
growth. The proliferation <strong>and</strong> pervasiveness of IT means that IT has significant effects on the<br />
environment, both positive effects <strong>and</strong> negative effects. The negative environmental effects of IT will<br />
increase in future <strong>and</strong> this makes Green IT an urgent matter. The positive environmental effects of IT<br />
have the potential to enable environmental sustainability in all spheres of Human activity.<br />
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Grant Howard <strong>and</strong> Sam Lubbe<br />
Green IT can also be viewed from an <strong>Information</strong> Systems (IS) perspective termed Green IS. Green<br />
IS involves more than just IT, it involves people <strong>and</strong> their use of IT as the core component of<br />
environmental problems <strong>and</strong> solutions, <strong>and</strong> this perspective of Green IT is suited for IS research. The<br />
paper uses the terminology Green IT while discussing Green IS, to be consistent with current<br />
practice.<br />
3.4 IT as a Green contravener <strong>and</strong> Green promoter<br />
3.4.1 IT as a Green contravener<br />
IT is a Green contravener through the creation of e-waste, the consumption of finite, natural resources<br />
such as trees for paper <strong>and</strong> water for cooling, <strong>and</strong> the exacerbation of dangerous anthropogenic<br />
climate change through GHG producing energy consumption. Pollution in the form of e-waste results<br />
in environmental degradation <strong>and</strong> destruction, <strong>and</strong> is driven by the huge consumer dem<strong>and</strong> for<br />
electronic products <strong>and</strong> the rapid electronic product obsolescence rates.<br />
3.4.2 IT as a Green promoter<br />
IT is a Green promoter through the use of IT in all Human activities to minimise pollution, minimise<br />
natural resource consumption, <strong>and</strong> minimise energy consumption. IT has the potential to enable the<br />
achievement of environmental sustainability in all Human activities primarily through the provision of<br />
information. <strong>Information</strong> provided by an IS enables Human activity efficiency which reduces the<br />
negative environmental sustainability aspects; <strong>and</strong> enables Human activity effectiveness which<br />
changes previous Human activities to new environmentally sustainable activities. Human activity<br />
efficiency without effectiveness presents the risk that the efficiency savings are used to justify<br />
increased consumption <strong>and</strong> further, any efficient or effective changes must not be offset by the IS<br />
environmental costs to affect those changes. <strong>Information</strong> enables informed <strong>and</strong> effective choices<br />
about environmental sustainability.<br />
3.5 Radical IT changes<br />
3.5.1 Product life-cycle changes<br />
In order for IT to minimise the negative aspects <strong>and</strong> maximise the positive aspects, radical changes<br />
are necessary. Currently, e-waste management is the primary Green IT focus among organisations.<br />
E-waste changes include the elimination of e-waste throughout the IT product life cycle from product<br />
design to product disposal. IT product design changes accommodate second h<strong>and</strong> use <strong>and</strong><br />
upgradeability so that obsolescence periods are extended; non-disposable is Green. Software<br />
changes, especially operating system software changes creates software that uses fewer resources,<br />
prevents device obsolescence, <strong>and</strong> reduces subsequent disposals. Throughout the IT product<br />
lifecycle stakeholders will be encouraged to reduce, re-use, <strong>and</strong> recycle or re-use, refurbish, <strong>and</strong><br />
recycle.<br />
3.5.2 Consumption changes<br />
Changes to lifestyles <strong>and</strong> cultural behaviours involve reducing the dem<strong>and</strong> <strong>and</strong> subsequent<br />
consumption of IT products. The culture of satisfying immediate consumption needs requires a<br />
change to a culture promoting long term environmental sustainability practices <strong>and</strong> projects. The<br />
culture of consumerism <strong>and</strong> consumption requires a change to one of environmental sustainability.<br />
The single pursuit of economic profits negates environmental sustainability.<br />
Radical energy saving changes that enable the effective <strong>and</strong> the efficient use of energy are critical to<br />
reduce GHG producing electricity consumption. IT innovation is essential in order to control, manage,<br />
<strong>and</strong> re-engineer all Human energy consumption activities for reduced energy consumption. It is<br />
necessary to use electricity generation methods other than GHG producing methods, such as<br />
hydroelectric power.<br />
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Grant Howard <strong>and</strong> Sam Lubbe<br />
3.6 Environmental, economic, <strong>and</strong> social consequences<br />
3.6.1 Environmental, economic, <strong>and</strong> social sustainability<br />
The radical changes proposed by Green IT have economic <strong>and</strong> social benefits, costs, <strong>and</strong><br />
consequences. The environmental, economic, <strong>and</strong> social views on sustainability are essential<br />
contexts of sustainability. Green IT can be regarded as a complex set of trade-offs between these<br />
views.<br />
The environmental consequences of Green IT are expected to be positive. This is deemed to be good<br />
for the environment <strong>and</strong> critical for people. Green IT at the very least highlights the negative<br />
environmental effects of not practicing Green IT. However there is strong debate about the<br />
measurements <strong>and</strong> quantified effects.<br />
3.6.2 Economic <strong>and</strong> social consequences<br />
Economically, environmental sustainability prescribes reduced energy usage which means lower<br />
energy bills for organisations <strong>and</strong> households. These realisable cost savings are a great motivator for<br />
Green IT, although reduced energy costs do not always mean reduced energy usage. However,<br />
reducing energy usage may be an expensive <strong>and</strong> long-term exercise for organisations <strong>and</strong> its<br />
consumers.<br />
Apart from the realisable cost savings from reduced energy bills, it is difficult to quantify the costs <strong>and</strong><br />
benefits of Green IT solutions. Some organisations are concerned that Green IT will negatively impact<br />
their competitiveness <strong>and</strong> economic viability. However, other organisations that have implemented<br />
Green IT show increased profits <strong>and</strong> market share. Another cost that organisations may have to bear<br />
is the cost of cleaning up e-waste pollution; currently society bears these costs.<br />
Socially, Green IT provides organisations with an answer to employee, investor, customer,<br />
competitor, ethical, corporate social responsibility (CSR), <strong>and</strong> regulatory pressures. In organisations<br />
<strong>and</strong> in households Green IT prescribes new ways of procuring, <strong>using</strong>, <strong>and</strong> discarding IT products;<br />
encouraging Green values, ideologies, attitudes, behaviours <strong>and</strong> lifestyles, <strong>and</strong> requiring people to<br />
become agents of change. Further, Green IT legislation may hamper desired IT usage.<br />
Green IT <strong>and</strong> especially Green IS can transform an entire organisation’s business model <strong>and</strong><br />
business processes. Paperless business processes are promoted to replace the need for printing <strong>and</strong><br />
signatures. Measurements for organisations are altered to provide motivation for environmental<br />
sustainability; the triple bottom line approach is one such measurement approach <strong>and</strong> consists of<br />
economic, environmental, <strong>and</strong> social aspects. In addition, the work environment may change so that<br />
workers do not commute to work <strong>and</strong> instead use IT enabled telecommuting <strong>and</strong> teleconferencing.<br />
3.7 Development of Green IT in South Africa<br />
3.7.1 Africa<br />
The dilemma for African countries is the economically debilitating cost to respond to climate change<br />
<strong>and</strong> the life threatening cost of not responding. However, one advantage for developing countries to<br />
respond to climate change is that they have a diminished reliance on GHG ca<strong>using</strong> fuels. In African<br />
countries, IT can decrease transport related GHG emissions through m-commerce, e-commerce, <strong>and</strong><br />
telecommuting, although Internet access <strong>and</strong> speed is a severe hindrance. Other countries in Africa,<br />
for example Ethiopia, are beginning to realise that Green IS can provide key environmental<br />
sustainability information for agricultural <strong>and</strong> economic development.<br />
3.7.2 South Africa<br />
There is little literature on Green IT in South Africa. This suggests that Green IT is still emerging in<br />
South Africa. The government environmental agency is beginning to publish the importance of Green<br />
IT, as the negative <strong>and</strong> positive aspects become noticeable. The South African Government<br />
acknowledges the fatal threats of climate change, is committed to reducing GHG emissions, <strong>and</strong><br />
recognises the potential of IS to alleviate climate change, but significant practical implementations are<br />
not evident. So, the development of Green IT in South Africa is nascent. This is both a threat for the<br />
present <strong>and</strong> an opportunity for the future. Although there is little literature on Green IT in South Africa<br />
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Grant Howard <strong>and</strong> Sam Lubbe<br />
this does not detract value from the paper. Part of the paper’s value is to highlight this important<br />
theme for South African researchers, government, <strong>and</strong> industry.<br />
4. Conclusion<br />
Although there is plenty of support for Green principles <strong>and</strong> practices as a necessity for the survival of<br />
the Human race, there is opposition. Green principles <strong>and</strong> practices aim for environmental<br />
sustainability to ensure the survival of the Human race. IT that incorporates Green principles <strong>and</strong><br />
practices can contribute significantly to environmental sustainability; this is termed Green IT. Green IT<br />
aims to reduce the negative effects that IT has on the environment such as e-waste, natural<br />
resources consumption, <strong>and</strong> energy consumption. Green IT also aims to reduce the negative<br />
environmental effects produced in all other aspects of society through information production <strong>and</strong><br />
alternative processes creation, especially through Green IS.<br />
The implementation of Green IT involves fundamental changes to the design, production, use, <strong>and</strong><br />
disposal of IT products. These changes have considerable environmental, economic, <strong>and</strong> social<br />
effects, with each of these aspects being balanced against one another at each Green IT<br />
implementation. Developed countries are implementing Green IT solutions at a growing rate while<br />
developing countries, such as South Africa are at a growing awareness stage only. There is<br />
considerable scope for Green IT to aid the cause of environmental sustainability.<br />
The paper has discussed <strong>and</strong> explored the salient theoretical constructs relating to the topic, such as<br />
environmental sustainability <strong>and</strong> Green IT. The result is a coherent view of Green IT <strong>and</strong> Green IT in<br />
South Africa. Even so, this is an evolving topic which may result in new coherent views in the future.<br />
In particular, the paper has highlighted the necessity <strong>and</strong> opportunities for research on Green IT in<br />
South Africa.<br />
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Evaluating ICT Based Services for Older Users<br />
Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
VTT, Kaitoväylä 1, Finl<strong>and</strong><br />
minna.isomursu@vtt.fi<br />
marja.harjumaa@vtt.fi<br />
Abstract: This paper summarizes experiences of empirical research done for evaluating information <strong>and</strong><br />
communication technology (ICT) based services that aim at supporting older users in independent living. Over<br />
the course of four years, we have explored several different ICT based service concepts in field trials. The goal of<br />
the field trials has been to expose novel ICT based service concepts to everyday life of ageing users through<br />
adoption of services in real life use. As a result, rich data about user experience <strong>and</strong> value of the service for<br />
different stakeholders has been collected <strong>and</strong> analyzed. Conducting the field trials has exposed practical issues<br />
about how to conduct research with older users. In this paper the experiences are summarized. The findings<br />
show that older participants differ from other user groups in several ways. Researchers faced challenges with<br />
research procedures during the field trials. These challenges were sometimes caused by exploratory nature <strong>and</strong><br />
limited duration of the field trial; the participants of field trials always did not want to invest on adopting the<br />
services as their everyday routines, but instead restricted the use into testing technology <strong>and</strong> related service as<br />
isolated objects from their everyday lives. Often, this also led into situations where participants judged the value<br />
of the service to “someone else”, <strong>and</strong> were not willing to adopt it themselves.<br />
Keywords: ambient assisted living, field trials, ageing technology users<br />
1. Introduction<br />
The ongoing change in demographics in Europe has triggered interest towards exploring the potential<br />
of information <strong>and</strong> communication technology (ICT) based services in supporting ageing population in<br />
independent living. ICT based services have been emerging into support everyday life, such as<br />
banking, shopping or information services. However, their adoption has been limited with older users.<br />
For example, only 28% of European older users aged from 55 to 74 uses Internet frequently (Eurostat<br />
2010). Older users are not <strong>using</strong> online banking services (Pew research, 2010) as frequently as the<br />
younger users. Sayago <strong>and</strong> Blat (2009) found out that the technology itself, users’ computer<br />
experience <strong>and</strong> educational level do not have influence on the accessibility of the web services for<br />
older users. Instead, the users had difficulties to remember task-related steps, underst<strong>and</strong>ing<br />
technical words <strong>and</strong> <strong>using</strong> the mouse. Vastenburg et al. (2008) identified in their work barriers that<br />
hinder the technology adoption by older users, including complexity <strong>and</strong> learnability, lack of perceived<br />
benefit, <strong>and</strong> compatibility issues. Usability <strong>and</strong> accessibility are issues that have been extensively<br />
studied during last couple of decades, <strong>and</strong> user interface solutions that are usable <strong>and</strong> accessible<br />
also for older users can be designed <strong>using</strong> human-centred design practises (Newell et al. 2006).<br />
Perhaps more often, the obstacles for adopting ICT based services are in older users’ attitudes <strong>and</strong><br />
feelings. According to Eisma et al. (2004) negative attitudes of older users are caused by the popular<br />
perception of age <strong>and</strong> technology, lack of awareness of technology, the feeling that technology is not<br />
useful for older people <strong>and</strong> the feeling that it is too difficult to use. Thus, it is important to involve older<br />
users in design <strong>and</strong> evaluation phases of technology concepts. Field trials can be used to expose<br />
novel ICT based service concepts to everyday life of aging users through adoption of services in real<br />
life use. Faber <strong>and</strong> de Vos (2008) state that it is a suitable method for gathering underst<strong>and</strong>ing how<br />
people use the service or application in real-life situations, what are the practical impacts of the<br />
service in the lives of the users, how it should be improved <strong>and</strong> what is its market value (Faber <strong>and</strong> de<br />
Vos, 2008). Field trial is a method of qualitative case research strategy (Benbasat et al. 1987), which<br />
is often used in studying ICT products or services.<br />
In this paper, experiences from empirical research done for evaluating ICT based services for older<br />
users are summarized. The experiences have arisen over the course of four years from the research<br />
work of observing <strong>and</strong> interviewing older people, <strong>and</strong> planning <strong>and</strong> supervising the research work<br />
itself. For the purpose of this paper, we analyzed the experiences of six researchers who had been<br />
involved in six different case studies.<br />
2. Related work<br />
Human-centred design is an approach to systems design <strong>and</strong> development that aims to make<br />
interactive system more usable by foc<strong>using</strong> on the use of the system <strong>and</strong> applying human<br />
factors/ergonomics <strong>and</strong> usability knowledge <strong>and</strong> techniques (SFS 2010). Human-centred design may<br />
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Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
involve doing co-design together with the end-users before the service implementation, <strong>and</strong><br />
evaluating the implemented complete service in real life settings afterwards. Even though more <strong>and</strong><br />
more products <strong>and</strong> services are developed for older people, there are only few studies describing<br />
experiences of doing co-design <strong>and</strong> service evaluation together with the older users.<br />
Eisma et al. (2004) have described their experiences on user involvement with older users in ICT<br />
development. They state that the details of interactions with older people should be carefully<br />
considered. In particular, the purpose of events <strong>and</strong> the role of the participants should be clearly<br />
explained in terms they fully underst<strong>and</strong>, terminology should be underst<strong>and</strong>able, interactive<br />
prototypes or devices should be used when possible, <strong>and</strong> it is encouraged to have group meetings<br />
with social nature. They also mention that the expected usefulness of the device should be clearly<br />
communicated for the users.<br />
Newel et al. (2006) have reported experiences of collaboration between academic <strong>and</strong> industrial<br />
partners. Their findings are based on the same project with Eisma (2004). They had faced challenges<br />
in persuading the industrial partners to work together with the older people when designing a portal<br />
for older users. In their results Newel et al. (2006) emphasize that time <strong>and</strong> patience is needed when<br />
designing for older users. They state that in the beginning of the project, both developers <strong>and</strong> clients<br />
have felt that the researchers exaggerate the difficulties that the older people have in <strong>using</strong><br />
computers, but their views changed significantly when they got an opportunity to work together with<br />
the older people.<br />
Depending on the research problem, researchers have not found it always necessary to conduct the<br />
field work at the homes of the users, but they have used other use contexts instead. As an example,<br />
Sayago <strong>and</strong> Blat (2009) have studied how older users use the web in their everyday lives by <strong>using</strong> insitu<br />
observations <strong>and</strong> interviews during computer courses, workshops <strong>and</strong> meetings. In their research<br />
they have focused merely on human-computer interaction, not underst<strong>and</strong>ing the processes of how<br />
the technology facilitated services are used within the context of everyday life.<br />
Vastenburg et al. (2008) have identified five design goals on how to design acceptable assisted living<br />
services for the older users. They state that 1) if the product requires effort from the user, it should<br />
give immediate benefit in return, 2) product should fit into existing living patterns of the users <strong>and</strong> use<br />
metaphors they already know, 3) product should offer several interfaces to different situation <strong>and</strong> to<br />
different purposes, but still offer a coherent interaction experience, 4) social network of the older<br />
people could be used as a resource of more complex operations with the technology are needed <strong>and</strong><br />
5) the service platform should adapt to changing user needs.<br />
3. Research methods<br />
3.1 The case studies<br />
Researchers’ experiences that are summarized in this paper are based on six case studies of<br />
different domain areas, namely meal delivery service, grocery ordering service, medicine<br />
management, wellness management, wayfinding, <strong>and</strong> video-assisted communication. In each of<br />
these case studies a new ICT based service concept was developed <strong>and</strong> evaluated with older users.<br />
In addition, four researchers have earlier experience from user research with younger users.<br />
In the first case study, Meal delivery service, a group of nine customers of the meal delivery service<br />
adopted a mobile service that provided them a possibility to choose the meal they would receive the<br />
following day. The trial lasted from three to eight weeks depending on the starting time <strong>and</strong><br />
rehabilitation or hospital periods of the user. The trial setup <strong>and</strong> outcome has been explained in more<br />
detail in Häikiö et al. (2007).<br />
In the second case study, Grocery ordering service, 16 older people were provided a possibility to<br />
order groceries to their homes by touching NFC tag-equipped product cards <strong>using</strong> their mobile<br />
phones. The results have been described in detail in Häikiö et al. (2010).<br />
The third case study, Wellness management, introduced a daily life management service with a touch<br />
screen computer offering a calendar, exercise support, phone, games, diary, <strong>and</strong> a web browser. The<br />
user group consisted of seven older users <strong>and</strong> they used the service for several months depending on<br />
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the user. Exercise application of this service has described in more detail in Muuraiskangas et al.<br />
(2010).<br />
The fourth case study, Wayfinding, evaluated a prototype for wayfinding support for older people both<br />
inside <strong>and</strong> outside within a near proximity of a nursing home. The participants were given navigation<br />
aids <strong>using</strong> three modalities; visual, audio, <strong>and</strong> tactile signals. Nine participants participated in the<br />
study. The results are described in more detail in Sorri et al. (2011).<br />
The fifth case study, Medicine management, introduced three different kinds of services for older<br />
users. First, a NFC-enabled PDA for medicine information retrieval was studied with eight older<br />
participants (more details in Isomursu et al. (2009)). Second, a PC-based application with a touch-tospeech<br />
user interface for vision impaired older users for identifying medication, <strong>and</strong> consuming<br />
medication related information was studied. The field trial was iterative, <strong>and</strong> involved the total of eight<br />
users at different phases of iterative trials. Third, an application for attaching audio information to<br />
everyday items, such as food containers <strong>and</strong> medicine packages, <strong>using</strong> a mobile phone <strong>and</strong> NFCtags<br />
was studied with ten visually impaired users, including both older <strong>and</strong> younger users.<br />
The sixth case study, Video-assisted communication, explores an ongoing field trial which started in<br />
December 2010 <strong>and</strong> is planned to end in August 2011. In this context, a video-communication service<br />
is introduced for older users <strong>and</strong> their carers who are <strong>using</strong> respital care service of private service<br />
provider for enhancing social interaction.<br />
The common nominator for all case studies was that they aimed at providing information about user<br />
experience, adoption <strong>and</strong> impacts of new ICT-supported service concepts in real-world conditions.<br />
3.2 Data collection<br />
The lead author of this paper has been the scientific supervisor of five of the six case studies. The<br />
second author has been the researcher responsible for data collection <strong>and</strong> analysis of fourth <strong>and</strong> fifth<br />
case study. To complement their personal experiences, four researchers that participated data<br />
collection <strong>and</strong> analysis of the explored case studies were interviewed. The interviews were semistructured<br />
theme interviews, where the following themes were discussed:<br />
Experiences of evaluating services with older users<br />
Practical issues that were considered before <strong>and</strong> during the study<br />
Description on how the user experience, adoption <strong>and</strong> impact were studied<br />
Challenges with (1) the user, (2) usage context, <strong>and</strong> (3) technology<br />
What the interviewees think they learned while conducting research with older users<br />
The researchers interviewed were aged from 26 to 37. Table 1 summarizes the background<br />
researchers whose experience contributes to findings of this paper.<br />
Table 1: Summary of contributors<br />
Interview no Gender Age Participation in analysed case studies<br />
1 Male 27 Medicine management<br />
2 Female 26 Wellness management, medicine management<br />
3 Female 27 Medicine management, wayfinding, video-assisted<br />
communication<br />
4 Male 37 Meal delivery service, grocery ordering service, medicine<br />
management<br />
Second author Female 30 Medicine management, video-assisted communication<br />
Supervisor Female 41 Medicine management, wayfinding, video-assisted<br />
communication, meal delivery service, grocery ordering service<br />
4. Findings<br />
In the following subchapters, we will discuss <strong>and</strong> summarize the experiences from conducting field<br />
trials with older users. Two main issues arise through the analysis process. The first issue deals with<br />
the characteristics of older users as a user group. The second issue arises from the challenges that<br />
the researchers have faced in the field work with older users.<br />
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4.1 Older participants as a user group<br />
Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
Researchers, who had earlier experience of doing user research with younger users, stated that the<br />
older people differ from other user groups. They are a heterogeneous user group with varying<br />
computer experience, <strong>and</strong> functional <strong>and</strong> cognitive capacity. Below, we discuss the observations the<br />
researchers had made in working with older users.<br />
4.1.1 Attitudes toward participating in research<br />
In many research projects, researchers had experienced difficulties in recruiting older participants for<br />
the trials. Sometimes, the older users refused immediately when they heard that participating would<br />
require them to use a mobile phone or computer without yet knowing what would they actually do with<br />
them. Also, we noted that the physical <strong>and</strong> health condition of the user had a big influence on their<br />
willingness to participate: if they felt their physical or health condition was problematic, they often said<br />
they do not want anything extra in their lives, <strong>and</strong> did not want to participate.<br />
Because of issues described above, we assume that the voluntary participants often have more<br />
positive attitudes toward technology than average older people.<br />
Older users who participated were cooperative <strong>and</strong> they have positive attitudes in general. Some<br />
users greeted the research as a welcome disruption <strong>and</strong> stimulation in their lives. This sometimes<br />
meant that the researcher visiting a home of the user needed to be prepared for social interaction,<br />
having coffee <strong>and</strong> discussing about news or personal issues. For these reasons, the interviews or<br />
other data collection events requiring visiting older users home required generally more time than the<br />
researchers were used to with younger users.<br />
4.1.2 Learning to use the technology<br />
In all the case studies, the older users have learned to use new technology surprisingly well, even if<br />
they might have first doubted their own skills. We observed that many users were really happy when<br />
they were able to learn to use new devices, <strong>and</strong> could provide useful information for the researchers.<br />
Users were often interested about the future of the research project; e.g. how many people have<br />
participated in the study <strong>and</strong> when the technology is going to be on the market.<br />
The researchers felt that the research setting should be a bit different with the older users compared<br />
with younger ones. Introducing the new technology <strong>and</strong> teaching how to use it has a more important<br />
role than with younger users, who have used to use new ICT devices <strong>and</strong> might take the technology<br />
”for granted”.<br />
4.1.3 Expectations towards services <strong>and</strong> technology<br />
In many cases, the researchers stated that it was difficult to predict <strong>and</strong> design what would bring true<br />
value to the lives of older users. The initial expectations what value the technology <strong>and</strong> services could<br />
provide were not always correct. As an example, effectiveness <strong>and</strong> high performance were not often<br />
on top of the list, because many users wanted to use time for things that matter to them. Many older<br />
users emphasized usefulness <strong>and</strong> cost-effectiveness instead.<br />
Researchers felt that the attitudes of the older users are really deep-seated <strong>and</strong> difficult to change. It<br />
was very common that older users considered ICT supported services something “suitable for<br />
younger users”. They often stated that even though they do not need the service personally, it might<br />
be useful for someone else.<br />
4.1.4 Difficulties with terminology<br />
The researchers had found out that ICT terminology is not familiar for all older users, <strong>and</strong> effort should<br />
be directed into introducing the technology with clear, natural language familiar for older people.<br />
People might also have differing conceptions <strong>and</strong> misunderst<strong>and</strong>ings about common technologyrelated<br />
concepts, such as the Internet, which has to be taken into account. The participants always<br />
evaluate the whole research setup, including all hardware <strong>and</strong> software components as well as the<br />
benefits they got from <strong>using</strong> the technology <strong>and</strong> difficulties they had with it. It is challenging to study a<br />
simple service concept or user interface paradigm in a field trial.<br />
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4.2 Challenges with research methods<br />
Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
The research projects discussed here mainly involved long-term (several weeks to some months) field<br />
trials. In all trials, the methods used for data collection were designed to fit the special conditions of<br />
each trial <strong>and</strong> the specific user group. Here, we discuss the experiences <strong>and</strong> findings observed with<br />
the selected methods <strong>and</strong> research procedures.<br />
4.2.1 Recruiting users<br />
It was usually difficult to recruit users who met certain criteria. The user organizations did not always<br />
have enough information about their members, e.g. their living situation or amount of medicines they<br />
use. Contact person at the user organisation has to know the criteria defined by the researchers <strong>and</strong><br />
then to contact each member <strong>and</strong> ask their willingness to participate <strong>and</strong> the other required<br />
information. It is a common problem that the health condition of the user changed during the field trial,<br />
which resulted in drop-outs or periods when the user was unable to use the service, for example,<br />
because of hospitalization.<br />
4.2.2 Collecting data about subjective experiences<br />
It was common procedure in the examined research projects that data about subjective user<br />
experiences was collected (1) in the beginning of the study <strong>using</strong> interview <strong>and</strong> observation of first<br />
impressions <strong>and</strong> the process of learning to use the technology <strong>and</strong> service, <strong>and</strong> (2) interviews <strong>and</strong><br />
discussions supported by storytelling after the research period. However, as the field trials typically<br />
lasted for a rather long period of time, usually some months, the researchers felt that data about user<br />
experiences evoked during the trial would be valuable. Storytelling at the end of the trial was found to<br />
be an excellent method for collecting information about subjective experiences, but the researchers<br />
had a feeling that it was rather selective, too.<br />
Collecting information about the during use user experience was experienced to be difficult. First,<br />
integrating data collection instruments into the everyday lives of older users was problematic. The<br />
user groups involved in the trials did not often have computers for reporting their experiences through<br />
web-questionnaires, or they were not familiar enough with computers to do that. We also had practical<br />
difficulties in paper-based methods, as some users had problems with h<strong>and</strong>-eye coordination, <strong>and</strong><br />
writing with a pen was not easy for them. Second, we did not succeed in designing research<br />
instruments that would capture <strong>and</strong> present the essence of expressing subjective experiences for our<br />
users. For example, in one of the service field trials, the method chosen for collecting user<br />
experiences that arise during the field trial was a paper diary. The diary was very simple, it asked the<br />
user to choose one of the smiley faces to describe if the experience was pleasant or not, <strong>and</strong><br />
provided an opportunity for written feedback or explanation. Severe challenges with paper based<br />
diary were observed. Most users did not use it at all during the trial period. Our findings indicate that<br />
many had trouble underst<strong>and</strong>ing what experiences or events they should report in a paper diary. This<br />
is also supported by analysing the diaries of those users who used it. The content analysis shows that<br />
the users had difficulties in expressing their feelings or experiences towards the technology or the<br />
service. This became visible, for example, in diaries where users used the diary to describe if they<br />
were happy with the food they received.<br />
The best methods for collecting data about subjective user experience during the field trial were<br />
based on observations or discussions where researchers visited the user <strong>and</strong> discussed with them<br />
about their experiences. In some cases, these discussions were evoked by technical problems that<br />
triggered the user to call the researcher, who then visited the user, helped to solve the problem <strong>and</strong> at<br />
the same time, discussed with the user about their subjective experiences. Also, observations done<br />
by people that were closely interacting with the older users were valuable. For example, nurses or<br />
other formal care personnel, or family members of the older user often had discussions about<br />
subjective experiences <strong>and</strong> observed the use <strong>and</strong> were able to provide their interpretation of the<br />
experiences of the older user.<br />
4.2.3 Quantitative data<br />
Researchers stated that they have had difficulties in asking quantitative questions from the older<br />
users (noted also in earlier studies, e.g. Eisma et al. 2004). It was observed that sometimes the older<br />
interviewees answered by choosing r<strong>and</strong>omly some of the alternatives given by the researcher, even<br />
if it seemed clear for the researcher that the users had not understood the questions. This was<br />
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Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
especially difficult problem in research projects that involved repeating field trials in several countries,<br />
<strong>and</strong> for the sake of comparability across trials quantitative questions were preferred.<br />
4.2.4 Challenges of methods based on group activity<br />
As many ageing have decreased hearing ability, group situations (e.g. focus groups) were sometimes<br />
challenging, as the participants had difficulty in following each others. Also, some researchers had<br />
observed that group situations did not encourage participants to express <strong>and</strong> discuss their personal<br />
age-related deficiencies.<br />
However, group-based methods were also found to be suitable, for example, in observing <strong>and</strong><br />
collecting data about experiences of the primary user of the service, i.e. the older user, <strong>and</strong> his or her<br />
close ones. For example, group interviews or discussions where the spouse <strong>and</strong> grown-up children of<br />
the older user were present often turned out to be very rich in detail. The presence of familiar persons<br />
stimulated discussions <strong>and</strong> insight that would have been difficult to evoke by a researcher who was a<br />
stranger for the user.<br />
4.2.5 Informed consent process<br />
Almost without exceptions, the researchers have found out that describing the research details<br />
necessary for signing an informed consent has required explaining the research details verbally <strong>and</strong><br />
discussion with the user. This was clearly necessary in cases where blind or vision impaired users<br />
were involved. However, also with other older users verbal discussion was usually a preferred method<br />
over written descriptions of research conditions. In some cases, a written description of the details of<br />
the research was presented to the users, but the researchers <strong>and</strong> nursing professionals involved in<br />
user recruitment noticed that the long, detailed written informed consent scared some users away,<br />
<strong>and</strong> made them to refuse to take part in the research.<br />
4.2.6 Sensitivity towards the changing conditions<br />
It was not unusual that researchers had to change plans if the situation was not opportune for a<br />
meeting scheduled for an interview or other data collection meeting. As an example, if the participants<br />
were tired, their family members were not present, or participants seemed unsecure or unwilling to<br />
participate, the meeting had to be rescheduled or cancelled. Sometimes, the participants became too<br />
tired to continue, <strong>and</strong> the interview was stopped <strong>and</strong> continued later. This requires sensitivity <strong>and</strong><br />
constant evaluation of the situation by the researcher.<br />
4.2.7 Integrating the service into everyday life of the ageing user<br />
The successful field trial requires that the users genuinely adopt the service into their everyday lives.<br />
In many field trials, we observed that the users did not really adopt the service <strong>and</strong> use it in their<br />
normal lives, but rather “tested” the technology as a separate object that had no role in their own lives.<br />
One field trial, the one dealing with the meal ordering service, was a clear exception. All users<br />
adopted it <strong>and</strong> used it in their daily lives. Also, none of the users dropped out during the trial. One<br />
explaining factor might be that the service interface was clearly integrated into a more comprehensive<br />
service chain with other actors, i.e. the meal delivery kitchen <strong>and</strong> logistical process of delivering<br />
meals. Therefore, the users might have been better aware of the impact on their action on other<br />
people, <strong>and</strong> therefore complied with expected usage pattern. The compliance was much lower in field<br />
trials where the service use was solitary, i.e. it did not trigger any actions on other people or other<br />
actors in the service chain.<br />
5. Discussion<br />
The researchers had concerns considering the sampling of users. They thought that older people who<br />
voluntarily participate in user studies generally have more positive attitudes toward technology than<br />
most old users. In some cases, the participants may participate because of the social interaction it<br />
provides them, which might have an effect on the results. The latter has also been recognised in<br />
Kayser-Jones <strong>and</strong> Koenig (1994) referenced by Eisma et al. (2004).<br />
Creating true value with ICT based services for older users was experienced difficult. The researchers<br />
expressed difficulties in fully underst<strong>and</strong>ing what was valued by older users, <strong>and</strong> what was important<br />
in their everyday lives. Earlier research has pointed out that many new technologies are often also<br />
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Minna Isomursu <strong>and</strong> Marja Harjumaa<br />
based on quite simple assumptions, <strong>and</strong> a more complex reality is faced only in deployment of<br />
technology (Lindley et al. 2008).<br />
In earlier studies it has been found that personal visits of the researchers keep users interested <strong>and</strong><br />
help them to develop loyalty to the project (e.g. Eisma et al. 2004). One practice that was found to<br />
increase the motivation to adopt <strong>and</strong> integrate the service fully to everyday life was that the<br />
researchers were in touch with the users during the trial, even when the communication concerned<br />
about the technical problems that the users had faced.<br />
Eisma et al. (2004) suggest that organising a focus group is useful when it is marketed as a social<br />
event <strong>and</strong> a possibility to learn about new products <strong>and</strong> technologies. This has further impact on<br />
user’s motivation as well as offering a possibility to participate in the future. In this study, the<br />
researchers stated that sometimes the participants get positive experiences when they learn to use<br />
new technology, because they have thought that they could not do that any more, <strong>and</strong> the<br />
participation rewards them as such.<br />
6. Conclusion<br />
Today, lots of efforts are directed to developing ICT services for increasing the well-being of older<br />
people. To properly evaluate their impact, one needs to evaluate how the technology can change<br />
people’s lives. In the early phases of service development, it is crucial to get rich information that<br />
helps in design. This paper summarizes experiences from six case studies. The findings show field<br />
trials provide an opportunity to observe the technology use in the real environment <strong>and</strong> to collect rich<br />
data by interacting with the users.<br />
Our analysis indicates that researchers had found challenges in working with older users. User<br />
research always requires sensitivity to recognize <strong>and</strong> respond to personal characteristics <strong>and</strong> needs<br />
of the users. As ICT has been traditionally developed for adult working users, the methods <strong>and</strong><br />
practices for working with more versatile user groups are still emerging. We hope that these findings<br />
are valuable both for researchers <strong>and</strong> companies developing new services for this emerging <strong>and</strong><br />
challenging market.<br />
Acknowledgements<br />
The research presented in this paper has been funded by VTT Technical Research Centre of Finl<strong>and</strong>,<br />
TEKES <strong>and</strong> Ambient Assisted Living (AAL) Joint Programme (projects HearMeFeelMe <strong>and</strong> WeCare).<br />
Also, we want to acknowledge the valuable contribution of the ageing users who took part in the field<br />
trials, the formal <strong>and</strong> informal caretakers who supported us in this research, <strong>and</strong> the researchers who<br />
conducted the field trials.<br />
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212
The Geography of Criminality - <strong>Information</strong> <strong>and</strong> GIS Models<br />
for Decision Support<br />
Paulo João 1 , Jorge Ferreira 2 <strong>and</strong> José Martins 2<br />
1<br />
DEIO –FCUL, University of Lisbon<br />
2<br />
e-GEO, FCSH – UNL, Lisbon, Portugal<br />
jolriao@gmail.com<br />
jr.ferreira@fcsh.unl.pt<br />
josemartins.geo@gmail.com<br />
Abstract: Over the last few years a new worldwide socio-economical order lead to an increasing number on<br />
crime rates <strong>and</strong> raised the need to find new ways to h<strong>and</strong>le information about criminality. To better underst<strong>and</strong> its<br />
causes, local, regional <strong>and</strong> national security authorities turned to new decision support tools such as Geographic<br />
<strong>Information</strong> Systems (GIS) <strong>and</strong> other information technologies to find better solutions. To underst<strong>and</strong> the<br />
magnitude of all the variables involved it is necessary to spatially capture <strong>and</strong> correlate them. Only by doing that<br />
it´s possible to quantify <strong>and</strong> qualify some hidden aspects of the phenomena. The city of Lisbon with is new<br />
proposed administrative division, reducing from 53 to 24 “freguesias” (minimum administrative division <strong>and</strong><br />
similar to parish’s) implies an enormous degree of uncertainty in the observation <strong>and</strong> location of criminal data. As<br />
the crime is not treated with an exact point, but at the level of parish, it implies that larger parishes are treated by<br />
the average crime regardless of place of occurrence. This research combines statistical methods (cluster<br />
analysis) <strong>and</strong> spatial models created with GIS, based on police crime reports. It also details a framework for<br />
short-term tactical deployment of police resources in which the objective is the identification of areas where the<br />
crime levels are high (enough) to enable accurate predictive models as well as to produce rigorous thematic<br />
maps. In recent years police services have engaged on proactive <strong>and</strong> Intelligence-Led Policing (ILP) methods.<br />
This advance was coincident with the recognition of law-enforcement solutions at local level. This paper also<br />
engages an approach to ILP as a methodology to provide the necessary tools for Decision Support System<br />
(DSS) of police departments.<br />
Keywords: crime analysis, GIS, geostatistics, intelligence-led policing, information dissemination, data mining<br />
1. Introduction<br />
Over the last few years a new worldwide socio-economical order lead to an increasing number on<br />
crime rates <strong>and</strong> raised the need to find new ways to h<strong>and</strong>le information about criminality. To better<br />
underst<strong>and</strong> its causes, local, regional <strong>and</strong> national security authorities turned to new decision support<br />
tools such as Geographic <strong>Information</strong> Systems (GIS) <strong>and</strong> other information technologies to help them<br />
in finding better solutions. The spatial attributes of this phenomena implies quantitative <strong>and</strong> qualitative<br />
variables <strong>and</strong> to underst<strong>and</strong> its magnitude, it is necessary to capture, analyze <strong>and</strong> correlate them.<br />
The city of Lisbon with is new proposed administrative division; reducing from 53 to 24 parishs<br />
(minimum administrative division) implies an enormous degree of uncertainty in the observation <strong>and</strong><br />
location of criminal data. As the crime is not treated with an exact point, but at the level of parish, it<br />
implies that larger parishes are treated by the average crime regardless of place of occurrence.<br />
In recent years police services have engaged on proactive <strong>and</strong> Intelligence-Led Policing (ILP)<br />
methods. This advance was coincident with the recognition of law-enforcement solutions at local<br />
level.<br />
This research combines statistical methods (cluster analysis) <strong>and</strong> spatial models with GIS based on<br />
police crime reports. It also details a framework for short-term tactical deployment of police resources<br />
in which the objective is the identification of areas where the crime levels are high (enough) to enable<br />
accurate predictive models as well as to produce rigorous thematic maps.<br />
It is also an approach to “Intelligence-led policing” as a strategic methodology to provide tools for<br />
decision support by police departments.<br />
Recent advances on geostatistics, information, data mining <strong>and</strong> GIS, the study <strong>and</strong> modeling of crime<br />
data to identify patterns has emerged as a new research field. Within the scope of this paper, some<br />
key questions will be addressed:<br />
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Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
Can crime patterns be extrapolated in small areas such as precincts accurately enough for use in<br />
deployment, scheduling <strong>and</strong> evaluation of police effectiveness?<br />
Can multivariate forecast models predict turning points <strong>and</strong> other new patterns?<br />
Is it possible, by <strong>using</strong> geostatistics tools such as kriging methods, to foresee <strong>and</strong> predict the<br />
occurrence of incidents, beyond the mere descriptive models?<br />
2. Geographical information systems <strong>and</strong> crime analyses<br />
Since the 1960’s Geographical <strong>Information</strong> Systems (GIS) have been applied to a vast number of<br />
studies <strong>and</strong> criminality is not an exception. From its first applications in Canada, GIS has become a<br />
major instrument for an effective territorial planning.<br />
From in-car navigation, retail <strong>and</strong> commerce location, costumer geo-marketing studies to risk<br />
management, construction, weather forecasting, military planning <strong>and</strong> other application fields, GIS<br />
has consistently emerged as a killer application.<br />
However, it was only in the beginning of the 1980’s with the reducing prices of technologies (operating<br />
systems, processors, storage capacity, memory <strong>and</strong> hardware), that GIS saw a significant<br />
development on new research fields, such as crime analysis, relocation of police precincts <strong>and</strong> crime<br />
reduction strategies.<br />
Much of the work in crime mapping <strong>and</strong> analyses was carried out in the United States by the Mapping<br />
<strong>and</strong> Analysis for Public Safety (MAPS), formerly known as the National Institute of Justice’s Crime<br />
Mapping Research Center (CMRC).<br />
This work served as a launching platform to the development of crime mapping in other countries like<br />
South Africa, Australia <strong>and</strong> United Kingdom<br />
The computerization of police records has come with a realization that this material can be used for<br />
crime <strong>and</strong> intelligence analyses (Ratcliffe, 2004). This work permits the recognition of patterns<br />
sometimes hidden <strong>and</strong> often not perceived by the police <strong>and</strong> authorities.<br />
Geography is also necessary for advances on spatial underst<strong>and</strong>ing <strong>and</strong> consequently “…has<br />
contributed to many disciplines where underst<strong>and</strong>ing space <strong>and</strong> place is important, such as with<br />
crime” (Ratcliffe, 2004).<br />
With the new administrative divisions of Lisbon, crime analyses will be more difficult due to area<br />
aggregation. For example, on certain types of crime, aggregation will probably mask important pattern<br />
details. The comparison between the new <strong>and</strong> the old administrative divisions in Lisbon is important<br />
<strong>and</strong> the use of predictive models can help authorities <strong>and</strong> provide the necessary results to an effective<br />
decision.<br />
To proceed or not with these new administrative divisions is the major question that has to be<br />
answered shortly. And the most correct answer will depend upon a rigorous <strong>and</strong> pertinent research<br />
based on data, information, but also knowledge.<br />
The comparison between new <strong>and</strong> old administrative limits is an important exercise to perceive<br />
pattern differentiation <strong>and</strong> has obvious implications on territorial planning <strong>and</strong> public domain.<br />
The use of geostatistics tools such as predictive models <strong>and</strong> kriging methods allows, beyond the mere<br />
description of phenomena, to foresee <strong>and</strong> predict the occurrence of incidents.<br />
3. Intelligence-Led Policing (ILP)<br />
Police forces are always struggling with lack of human resources to reduce crime on their jurisdiction.<br />
By analyzing <strong>and</strong> correlate information from primary sources on criminal environment, it’s possible to<br />
achieve higher efficiency levels.<br />
Criminal historical data are analyzed to develop new strategies <strong>and</strong> actions to reduce crime. It is a<br />
very dem<strong>and</strong>ing task in terms of technological means <strong>and</strong> human resources but it is the best strategy<br />
to reduce crime because it has an approach, both preventive <strong>and</strong> repressive.<br />
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Intelligence<br />
Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
Criminal environment<br />
Figure 1: ILP <strong>and</strong> crime reduction process (Ratcliffe, 2005)<br />
Decision-maker<br />
An ILP model (at its first stage) enables the interpretation of the criminal environment. This is usually<br />
performed by an intelligence department <strong>and</strong> relies on information’s sources both internal <strong>and</strong><br />
external to the police service.<br />
The obtained information should, in an intelligence-led environment, be passed to people who can<br />
actually impact in a positive manner on the criminal environment (decision maker). This requires an<br />
intelligence structure to identify <strong>and</strong> influence the decision-makers. It should be noted that this<br />
requires both an ability to identify the decision-makers, as well as to influence their thinking, regarding<br />
the types of strategies to achieve better criminal numbers.<br />
ILP strives for greater efficiency in policing, but it has also been accompanied by other efficiency<br />
methods, some of which conflict with ILP.<br />
There is a performance culture in many police services which strives to measure every bit of data <strong>and</strong><br />
it is a concern that the benefits of ILP will be lost in a flood of statistical operations.<br />
One of the major issues is response time. Many police services have now records of the response<br />
time to routine calls, <strong>and</strong> they build response improvement’ protocols that maximize performance.<br />
Unfortunately the research evidence is fairly conclusive: improving response times to calls does not<br />
reduce the number of crimes.<br />
The intelligence led policing model, is more difficult to implement but is also the most versatile in<br />
performance <strong>and</strong> results.<br />
The following table compares the various models of policing in terms of implementation, resources<br />
<strong>and</strong> results:<br />
Table 1: Strategic aspects of police activity<br />
Neiborhoud<br />
<strong>and</strong><br />
community<br />
policing<br />
Problem<br />
oriented<br />
policing<br />
Intelligenceled<br />
policing<br />
Implementation<br />
dificulty<br />
low<br />
medium<br />
high<br />
Human resources<br />
high<br />
high<br />
low<br />
Technology<br />
resources<br />
low<br />
medium<br />
high<br />
Costs<br />
estimate<br />
high<br />
high<br />
medium<br />
215<br />
Geography<br />
application<br />
Low<br />
medium<br />
High<br />
Expected<br />
results<br />
low<br />
medium<br />
high<br />
Type of<br />
information<br />
retrospective<br />
retrospective<br />
prospective<br />
Type of<br />
actuation<br />
preventive<br />
repressive<br />
preventive<br />
<strong>and</strong><br />
repressive
Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
In recent years there has been a move within police services towards a proactive <strong>and</strong> ILP. That was<br />
coincident with the recognition of local policing solutions <strong>and</strong> the importance of intelligence function at<br />
local areas. This paper is also an approach to ILP as a strategic methodology to provide a tool for<br />
decisions makers in police departments.<br />
Knowing where the policeman becomes a crucial intervenient provides a better underst<strong>and</strong>ing of the<br />
intervention protocols anticipating the outcome <strong>and</strong> effect. Without such a baseline, evaluations are<br />
limited as to the purposes <strong>and</strong> sometimes anticipate consequences to police efforts. Intelligence-led<br />
policing is also about being a smart police.<br />
That means increasing the effectiveness <strong>and</strong> efficiency of police interventions through the use of the<br />
right information. Such efforts are data driven (quantitative <strong>and</strong> qualitative) <strong>and</strong> analytically rigorous,<br />
assuring than appropriate care has been taken to collect, organize <strong>and</strong> analyze information, prior to<br />
action.<br />
This ameliorates the deficiencies of rigid boundaries <strong>and</strong> moves towards a more dynamic<br />
methodology. With this new Lisbon “scenario”, from 53 to 24 parishes <strong>and</strong> assuming these<br />
administrative limits, crime analysis will become more difficult (to evaluate) due to spatial aggregation.<br />
4. Crime mapping today<br />
With the emergence of geographic information technology <strong>and</strong> its successful use as a tool for crime<br />
analysis <strong>and</strong> forecasting, the study <strong>and</strong> modeling of historical or current crime data to identify spatial<br />
crime patterns has emerged as a new research area. However in Europe, this reality is still recent<br />
(Chainey, S. et. al. 2008 & Wilson, R. et. al. 2008). Three key questions can be pointed out:<br />
Can univariate methods be used as a mean to extrapolate accurate crime patterns in the shortrun<br />
small areas such as precincts?<br />
Are they robust enough for use in deployment, scheduling <strong>and</strong> as counterfactuals for evaluating<br />
police effectiveness?;<br />
Can st<strong>and</strong>ard crime indicators (used in multivariate forecast models) predict turning points <strong>and</strong><br />
other new patterns like, for example, a new crime?<br />
For some crime types, aggregation may mask important seasonal variations in smaller areas. For<br />
example, university areas may have seasonal patterns in property crimes influenced by the comings<br />
<strong>and</strong> goings of the students <strong>and</strong> teachers. Also, shopping areas may have peaks on holiday times.<br />
Law enforcement officers have been mapping crime virtually since the time that police agencies were<br />
established through the use of push pins <strong>and</strong> a paper map at the beginning of the 20 Century<br />
(Harries, 1999).<br />
By the late 70’s <strong>and</strong> early 80’s, there was a resurgence of interest in underst<strong>and</strong>ing <strong>and</strong> analyzing the<br />
spatial dimension of crime through the characteristics of incident, its location <strong>and</strong> geographical<br />
analysis on incident (Boba, 2009). With the development of GIS in the 90’s, law enforcement officers<br />
begun to consider the principles of geography <strong>and</strong> spatial information <strong>using</strong> new technologies in order<br />
to realize <strong>and</strong> develop mechanisms to crime prevention <strong>and</strong> the public safety.<br />
The cartographic representation has some advantages such as: help visual analysis <strong>and</strong><br />
statistics of crime, aggregate information in spatial matrix, produce thematic maps that help to<br />
communicate the results of the analysis (Eck, J. et al. 2005 & Boba, 2009).<br />
Harris (1990:3), states that “the purpose of maps is to communicate information”. The cartographic<br />
representation is a tool to communicate information across time <strong>and</strong> space.<br />
The diffusion of GIS into crime analysis has been a slow process, first due to costs, both hardware<br />
<strong>and</strong> software <strong>and</strong> then because of its complexity. When discussing the current use of GIS for crime<br />
analysis, activities can be divided into current <strong>and</strong> cutting edge applications (currently used in law<br />
enforcement agencies to support crime analysis activities).<br />
The use of GIS to support crime analysis activities in police day-to-day operations is a powerful tool<br />
for strategic planning (Johnson, 2000).<br />
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4.1 Crime hot-spots<br />
Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
This is the most common method used in criminal representation. It assumes that past crime locations<br />
will persist into the future, however the actual results of this method depends on the time period under<br />
review, usually this robust method only produces good results when applied to short time series.<br />
An interesting feature in the detection of hot-spots is its persistence <strong>and</strong> coincidence over time as<br />
shown by Anselin (2000), the hot-spots reflect high levels of crime initially moderate, but over time,<br />
usually, this crime will change to more violent types of crimes (e.g. acts of v<strong>and</strong>alism to crimes of<br />
theft).<br />
Therefore, should be contained <strong>and</strong> controlled in time to prevent more serious incidents to people <strong>and</strong><br />
property in the geographic area covered by the hot-spot.<br />
According to Eck, J. et al. (2005), this method assumes that they must map the locations <strong>and</strong> not<br />
criminal occurrences thus underst<strong>and</strong> why certain settings are more easily criminal occurrences while<br />
others appear to inhibit these same events. Ainsworth (2001:88) refers that "A crime hot-spot is<br />
usually understood as a location or small area with boundaries clearly identified where there is a<br />
concentration of criminal incidents, which exceed the normal for this area, the term can also be used<br />
to describe locations that showed an increase in crime a given period of time".<br />
4.2 Descriptive statistics for crime analyses<br />
One of the most important tasks associated with crime analysis is to know data <strong>and</strong> its particularities.<br />
This data is the baseline for an intelligent analysis, however, very little of this data are accurately<br />
collected or has the necessary detail.<br />
Underst<strong>and</strong>ing the different types of data <strong>and</strong> their definitions is important because some types of<br />
analysis have been designed for particular types of data <strong>and</strong> may be inappropriate.<br />
After preprocessing <strong>and</strong> geocoding all the information, data was analyzed <strong>and</strong> the dataset consisted<br />
in 35549 police records, distributed by 8 variables, according with the fallowing coding:<br />
Table 2: Data coding process<br />
Variable Min Max<br />
Day 1 31<br />
Month 1 12<br />
Hour 0 23<br />
Minute 0 59<br />
Type of crime 1 6<br />
Subtype of crime 1 34<br />
Classification 1 112<br />
Parish 1 53<br />
According to the Persons’ coefficient correlation matrix, there was no significant correlation between<br />
the variables which let us to identify the variables as independent observations.<br />
Table 3: Person correlation matrix<br />
Day Month Hour Minute Type Subtype Classification Parish<br />
Day 1<br />
Month -0,011 1<br />
Hour 0,008 0,003 1<br />
Minute 0,007 0,000 -0,019 1<br />
Type 0,050 0,016 0,013 -0,020 1<br />
Subtype 0,004 0,002 0,003 -0,004 0,020 1<br />
Classification -0,014 0,009 0,010 -0,009 -0,008 0,000 1<br />
Parish -0,002 0,005 0,007 -0,013 0,012 0,020 0,032 1<br />
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In terms of overall information, this data represent a small part of the criminal phenomena, since there<br />
were only considered crimes reported <strong>and</strong> recorded by the Public Safety Police (Polícia de Segurança<br />
Pública – PSP).<br />
The primary dataset consist of one year of criminal offences for all individual events for 2009 in Lisbon<br />
County obtained with authorization from the PSP.<br />
The dataset include all personal <strong>and</strong> patrimonial offences. The most often studied crime is robbery<br />
occurred in public transportation. All the records have a geographic reference to a parish, which<br />
permits the classification of the offences <strong>and</strong> their mapping in a GIS.<br />
Unfortunately the accuracy is not the ideal because we don´t have the points of the occurrences<br />
which prevents us from <strong>using</strong> the georeference point but only the “parish area”.<br />
The histograms below show that the majority of crimes are robbery mainly during the evening.<br />
Figure 2: Data histograms<br />
4.3 Methodology<br />
Regarding the GIS methodology adopted, it was necessary to prepare the work with a set of layers<br />
<strong>and</strong> create a theme to match the expected distribution of parishes. Thematic maps showing the<br />
number of crimes or other metrics were aggregated <strong>using</strong> color palettes (darker for more crimes <strong>and</strong><br />
brighter for less).<br />
This method is widely used because it permits the analysis by county, to observe where the crime has<br />
been committed. However, although this is also a popular method, it is unlikely that crime is fair by<br />
Municipality (e.g. Lisbon) <strong>and</strong> it can lead to interpretations that do not correspond to reality.<br />
The main reason is because the population density is different in each place. In this case, the use of<br />
ratios in the representation of colors would be the wisest choice.<br />
This type of maps creates a jurisdictional conflict between the geographical areas <strong>and</strong> administrative<br />
delimitations (or jurisdictions), when they are different (as is the case of Lisbon).<br />
On crime analysis, maps were initially created to show absolute values (recorded in 2009) by the<br />
Public Security Police (PSP) in Lisbon, according to the current structure of 53 parishes <strong>and</strong> the new<br />
structure of 24 parishes. This representation was the result of the geo-referenced crimes recorded in<br />
2009 by 53 existing parishes. To represent the crimes according the new administrative structure it<br />
was necessary to aggregate data. The parish of Santa Maria dos Olivais, under the new structure will<br />
be divided into two parishes, giving rise to a new one, the Oriente.<br />
In order to estimate crime values in these two parishes, it was necessary to divide the total between<br />
the old <strong>and</strong> the new area, multiplying the current area. The result was then subtracted from the old<br />
parish with a view to obtaining an estimated average value for this new delimitation.<br />
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It should be noted that these data could not be exact because a smaller area may have more or less<br />
recorded crimes. However, for research purposes, the method can be used, as long as properly<br />
referred.<br />
Figure 3: Parish’s administrative division (actual <strong>and</strong> planning)<br />
Figure 4: Total crimes in Lisbon<br />
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Analyzing crime data by the actual divisions <strong>and</strong> by the new ones, it seems obvious an increase in<br />
numbers (in part due to the aggregation of values recorded in several parishes that lead to new<br />
administrative area). Significantly, the low number of crimes in the small villages of the current<br />
division changed from the first to the last value class (when aggregated the new administrative<br />
division). The data shows a very large criminal density on Oriente, but the empirical knowledge of this<br />
area can tell us that most criminal incidents occur in its (old) aggregated neighborhood.<br />
Next, the calculation of criminal density for the parish was made, dividing the total crimes per square<br />
Km in area.<br />
Figure 5: Ratio of total crimes per square Km in Lisbon<br />
Regarding criminal density, the new administrative division gives the perception of a decrease in<br />
crime numbers. However, this fact is in part related to the significant increase in the area of some<br />
parishes, thus reducing the density of crimes. In order to underst<strong>and</strong> how it would be the spatial<br />
representation of crime according to the city's population, it was created a criminal incidence rate,<br />
dividing the number of crimes by the population; the results were expressed in ‰.<br />
The data used for the calculation was from 2001, the Population Census conducted by the National<br />
Statistics Institute (INE). It would be appropriate to use more recent values (for example the<br />
population in 2009) but it was not possible due to the fact that the census is made every 10 years.<br />
When it comes to an evaluation of numbers, for example criminal incidence rates, the new<br />
administrative division gives the perception of a decline. The reduction is in part due to the significant<br />
increase in the area of some parishes <strong>and</strong> their residents, thus reducing the incidence rate of crime in<br />
certain districts of the new administrative division.<br />
It is a well know fact that the southern part of the city, corresponding to the downtown district,<br />
correspond to an area that has the highest number of crimes, mainly because it is the center of major<br />
economic, financial <strong>and</strong> commercial activities. But also because it’s the main tourism “spot” in the city,<br />
which triggers criminal activity.<br />
In order to achieve different perspectives when analyzing the crime results across the city, it was<br />
decided to make the sum of the resident population with the mobility of population (population that<br />
enter <strong>and</strong> circulate in the city like daily workers <strong>and</strong> tourists), in the sense that only by analyzing the<br />
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Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
criminal statistics according to the resident population of Lisbon, may be to overemphasize the<br />
intensity of occurrence. Assuming that a large number of resident population plus the other group may<br />
lead to higher crime rates. (Machado, et. al. 2007:138).<br />
Figure 6: Ratio of criminal incidence per 1000 inhabitants in Lisbon<br />
Figure 7: Ratio of criminal incidence per 1000 inhabitants <strong>and</strong> presents in Lisbon<br />
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Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
Looking at the crime rate with the local population, it is possible to observe the emergence of new<br />
parishes with a higher crime rates however, the maximum crime rate is much lower when compared<br />
to the representation only by the resident population.<br />
Finally, it was created a spatial index based on crime incidence <strong>using</strong> spatial statistical tools. This<br />
type of operation should be performed at a micro scale of analysis, statistically equal to subsection<br />
(Martins, 2010), constituting the highest level of disaggregation corresponding to the block in urban<br />
terms (Geirinhas, 2001).<br />
This index was calculated <strong>using</strong> a Geographic Weighted Regression (GWR) <strong>using</strong> spatial context of<br />
dynamic Gaussian Kernel. This operation uses the square root or log of the variables that are<br />
selected for analysis by smoothing the absolute values <strong>and</strong> approximating the curve of normal<br />
distribution in parabolic form, reducing disparities in the distribution (Longley et. al., 2005).<br />
The result is expressed in st<strong>and</strong>ard deviation units, which is repeatedly used as an index of risk<br />
(Harries, 1999). GWR provides a local model of the variable or process you are trying to underst<strong>and</strong><br />
by fitting a regression equation to every feature in the dataset. GWR constructs a separate equation<br />
for every feature in the dataset incorporating the dependent <strong>and</strong> explanatory variables of features<br />
falling within the b<strong>and</strong>width of each target feature.<br />
The shape <strong>and</strong> extent of the b<strong>and</strong>width is dependent on user input for the Kernel type, B<strong>and</strong>width<br />
method, Distance <strong>and</strong> Number of neighbors parameters The dependent variable for the GWR index<br />
consisted on the criminal occurrences <strong>and</strong> as an independent variable it was used as the sum of the<br />
resident population with the mobility of population. It should be noted that this type of analysis can be<br />
a part of numerous independent variables of socio-economic development in order to identify a more<br />
realistic index. For studies with similar scales to parishes it would be appropriate but for larger areas it<br />
would be a difficult task for socio-economic values. It is also important to mention that this type of<br />
procedure (if used alone without performing a normalization of the variables) may generate incorrect<br />
analysis results (Harries, 1999) due to the fact that there are high levels of occurrence in areas with<br />
low population <strong>and</strong> this happens also with a cartographic representation of crime rates.<br />
Figure 8: Spatial index of criminal incidence per 1000 inhabitants (actual <strong>and</strong> planning)<br />
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Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
Looking at the previous representation <strong>and</strong> <strong>using</strong> the GWR operation, it seems obvious a reduction of<br />
higher values of distribution according to population, mainly in certain areas of the new administrative<br />
division.<br />
5. Conclusions <strong>and</strong> future works<br />
The final results of this research can be vital to decide an effective police strategy. The decision to<br />
proceed with this new administrative scenario is so difficult as to decide about new ways to deal with<br />
this new territorial sketch. To decide what bases to consider <strong>and</strong> what technologies to adopt are also<br />
difficult choices.<br />
In recent years, researchers <strong>and</strong> technicians have made huge progresses in harnessing the analytic<br />
capabilities of GIS to track crime patterns over time <strong>and</strong> then use this information to create predictive<br />
models. These advances turned GIS in a valuable tool to assist <strong>and</strong> support decision-making<br />
strategies for the police forces <strong>and</strong> security services.<br />
Now that many law enforcement agencies have adopted crime mapping <strong>and</strong> have begun to produce<br />
the types of tools mentioned, they want more.<br />
The dem<strong>and</strong>s for more sophisticated spatial analytic techniques lead to the research on predictive<br />
models to help the prevention of the “next crime”.<br />
The crime must be examined in the context of threats <strong>and</strong> taking into account assessment of the<br />
demographic, economic, social <strong>and</strong> environmental variables that could affect the criminal act. Just<br />
seeing the real threats <strong>and</strong> developing solutions <strong>using</strong> Geography, GIS <strong>and</strong> multivariate statistics<br />
analysis, we can analyze the current map of criminality.<br />
The advanced spatial analysis came to identify crime patterns <strong>and</strong> vulnerable areas (in terms of<br />
insecurity). This type of research facilitates knowledge in order to take strategic decisions to combat<br />
the criminal phenomena. However, only at micro scale, the criminal data can be considered as useful<br />
to a strategic planning against crime.<br />
Complementing spatial analysis of crime with the empirical knowledge of the historical <strong>and</strong> cultural<br />
components of a given territory, one may identify the reason for the occurrence of a particular type of<br />
crime in a given geographical area <strong>and</strong> therefore planning <strong>and</strong> resources in order to prevent <strong>and</strong><br />
reducing it.<br />
Nowadays, the level of spatial analysis <strong>and</strong> modeling techniques already permit the development of<br />
tactical planning strategies to fight crime. Data gathered in a form of information <strong>and</strong> properly worked<br />
can end up in an effective decision-support tool. And that can only be achieved by a combination of<br />
technology <strong>and</strong> human knowledge.<br />
Univariate methods are limited when we try to underst<strong>and</strong> the criminal occurrences; multivariate<br />
options are more reliable, with the inclusion of other variables.<br />
For police daily work this kind of study is necessary to prepare <strong>and</strong> organize all the resources as well<br />
as to implement decisions.<br />
Criminality is very complex <strong>and</strong> its remarkable dynamic nature is not easy to model with a simple<br />
multivariate statistic method. The help of sociologists <strong>and</strong> other specialized workgroups is also<br />
essential to choose the most correct <strong>and</strong> rigorous statistical models but also crucial to obtain reliable<br />
results. Geography gives the spatial coherence <strong>and</strong> GIS advances explore the true possibilities of<br />
spatial analyses.<br />
References<br />
Ainsworth, P. (2001), Offender Profiling <strong>and</strong> Crime Analysis, UK, Devon, William Publishing.<br />
Anselin, L. et al. (2000), Spatial Analyses of Crime, Criminal Justice: Vol. 4, USA, Washington.<br />
Boba, R. (2009), Crime Analysis with Crime Mapping, SAGE Publications, Inc, California, 2 nd Ed.<br />
Chainey, S. & Tompson, L. (editors) (2008), Crime Mapping Case Studies: Practice <strong>and</strong> Research, John Wiley e<br />
Sons, Engl<strong>and</strong>.<br />
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Paulo João, Jorge Ferreira <strong>and</strong> José Martins<br />
Eck, J.; Chainey, S.; Cameron, J.; Leitner, M. & Wilson, R. (2005), Mapping Crime: Underst<strong>and</strong>ing Hot Spots,<br />
USA, National Institute of Justice.<br />
Geirinhas, J. (2001) Conceitos e Metodologias - BGRI - Base Geográfica de Referenciação de Informação,<br />
Direcção Regional de Lisboa e Vale do Tejo/INE - 2º Semestre de 2001.<br />
Harries, K. (1999), Mapping Crime: Principle <strong>and</strong> Practice, Washington, DC, NIJ.<br />
Johnson, C. (2000), Crime Mapping <strong>and</strong> Analysis Using GIS. Geomatics 2000: Conference on<br />
Longley, P.; Goodchild, M.; Maguire, D. & hind, D. (2005), Geographic <strong>Information</strong> Systems <strong>and</strong> Science, John<br />
Wiley e Sons, Engl<strong>and</strong>, 2 nd Ed.<br />
Machado, P.; Pereira, A.; Rebelo, M.; Menezes, M.; Craveiro, J. & Santos, A. (2007), Metrópoles Seguras: Bases<br />
para uma Intervenção Multisectorial nas Áreas Metropolitanas de Lisboa e Porto, 2 Volume, Lisboa, LNEC<br />
– MAI.<br />
Martins, J. (2010), Os Sistemas de Informação Geográfica na Gestão da Criminalidade em Portugal, Msc.<br />
dissertation FCSH-UNL, Lisboa.<br />
Ratcliffe, J.H. (2004),Strategic Thinking in Criminal Intelligence. Sydney: Federation Press.<br />
Ratcliffe, J.H. (2005), The effectiveness of police intelligence management: A New Zel<strong>and</strong> case study.<br />
Wilson, R. & Smith, K. (2008), What is Applied Geography for the Study of Crime <strong>and</strong> Public Safety?, in<br />
Geography & Public Safety, Vol. 1, Issue 1, February 2008, Washington, DC, COPS, NIJ, U.S. Department<br />
of Justice, pp.1–3.<br />
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Mobile Virtual Network Operator <strong>Information</strong> Systems for<br />
Increased Sustainability in Utilities<br />
Hallur Leivsgarð Joensen <strong>and</strong> Torben Tambo<br />
Aarhus University, Herning, Denmark<br />
U06HallurJo@hih.au.dk<br />
torbento@hih.au.dk<br />
Abstract: In today’s research on creating a more sustainable energy utilisation in society, much effort is directed<br />
towards producing or consuming energy. This focus tends to overlook the fact that energy needs to be sold <strong>and</strong><br />
distributed to the consumers in increasingly open marketplaces where the marketing, sales <strong>and</strong> buying processes<br />
are separated from physical networks <strong>and</strong> energy production. This study aims to characterise <strong>and</strong> evaluate<br />
information systems supporting the transformation of the free market-orientation of energy <strong>and</strong> provision of<br />
utilities in a cross-sectorial proposition known as Mobile Virtual Network Operator (MVNO). Emphasis is<br />
particularly on st<strong>and</strong>ardised information systems for automatically linking consumers, sellers <strong>and</strong> integration of<br />
network infrastructure actors. The method used is a feasibility study assessing business <strong>and</strong> information<br />
processes of a forthcoming utilities market player. The method additionally includes interviews, ontological<br />
mapping <strong>and</strong> quantitative business process readiness assessment. The information systems approach adds an<br />
intermediary layer to ‘traditional’ green IS emphasising the collaborative market participation approach. The<br />
required simplification of customer relations contained in the evaluated IS highlights a sharpened ontology of the<br />
business context beneficial to further the ‘greening’ of the power grid. Intra- <strong>and</strong> inter-organisational<br />
communication must be included in the IS research framework. The findings are centralised on underst<strong>and</strong>ing<br />
energy sales from efficiency of business processes, underlying information systems, <strong>and</strong> the ability to make the<br />
link from consumption to cost visual <strong>and</strong> transparent to consumers. The conclusion is that the energy sector<br />
should look into other sectors <strong>and</strong> learn from information systems which ease up business processes along with<br />
attractive consumer interfaces much more than today. However, further research is required to underst<strong>and</strong><br />
deeper feasibility among broader demographics <strong>and</strong> closer linking to smart grids.<br />
Keywords: information systems, business-to-consumer, sustainability, business process, utility sales, energy<br />
distribution<br />
1. Introduction<br />
Increased pressure to reduce the CO2 footprint of the modern life calls for new <strong>and</strong> highly innovative<br />
solutions (Edinger & Kaul 2010), including intelligent use of information systems (Melville 2010). Much<br />
effort to reduce CO2 revolves around renewable energy production, storage technologies (electric<br />
cars, heat pumps) <strong>and</strong> more efficient consumption of energy (LED lamps, low energy freezer, etc.).<br />
Less effort to reduce CO2 is spent on the sales <strong>and</strong> distribution of cleaner energy, particularly when it<br />
comes to household consumers (Kranz 2010). However, large-scale information system initiatives<br />
exist within overall distribution <strong>and</strong> balancing of power, generally known as smart grids (Bhanhoo<br />
2010, Joosting 2010). Governmental influence, funding <strong>and</strong> behavioural initiatives, among others,<br />
<strong>using</strong> taxation <strong>and</strong> subsidies strongly influence all parts of the energy system (Luiten et al. 2006,<br />
Bishop et al 2010, Foxon <strong>and</strong> Pearson 2008, Harbone & Hendry 2009, King et al 1996). The open<br />
market discussion further on in this paper should be regarded with the reservation that governmental<br />
influence <strong>and</strong> direct <strong>and</strong> indirect regulation are prevalent in all utility sectors (Windfield et al. 2010).<br />
Transformation in the energy sector could use inspiration from other government-regulated areas with<br />
more agility of the market dynamics to obtain change <strong>and</strong> restructuring (Harmon et al. 2010, King et<br />
al. 1996, Tsoutsos & Stamboulis 2005).<br />
Exchange of energy is concurrently with the quest for increased sustainability to be left to open<br />
markets where the difference between old <strong>and</strong> new in this segment is that earlier, a consumer was<br />
bound to a certain supplier. Today, most utilities markets are deregulated <strong>and</strong> liberalised giving the<br />
consumer a host of possibilities for choosing suppliers (Switzer & Trout 2007). During the sales<br />
process of energy, utilities typically have to use complex front <strong>and</strong> back office systems for servicing<br />
<strong>and</strong> transferring customers among them. Between periods of supplier shifts <strong>and</strong> 4-12 yearly invoices,<br />
consumers pay very little attention to energy consumption, <strong>and</strong> information retrieval from utility<br />
companies is difficult <strong>and</strong> time-consuming. Customer services can tie up many resources. Also, back<br />
office functions may involve manual interacting among several parties: Cable owners, enablers,<br />
partnerships, past seller, new seller, various core, backbone <strong>and</strong> financial institutions.<br />
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The burning platform can be described as a missing link between consumers, old style sellers, new<br />
market actors <strong>and</strong> top-level system responsible organisations. This paper is to analyse novel<br />
information system-based approaches in reshaping the utilities market believing that new actors <strong>and</strong><br />
more efficient <strong>and</strong> engaging information systems can influence the consumer’s attitude toward<br />
greener energy in a better way. The scene is highly different among countries depending on criticality,<br />
loyalty to monopoly, pricing policies <strong>and</strong> e.g. use of electric heating (Olsen et al. 2006). <strong>Information</strong><br />
systems for supporting consumers, front office <strong>and</strong> back office function in the energy selling<br />
organisations should ideally be very efficient, very transparent <strong>and</strong> very adaptive <strong>and</strong> even make it a<br />
little fun to be customer. <strong>Information</strong> systems are generally viewed out of their usefulness in<br />
application <strong>and</strong> business contexts (Alter 2008). Cross-industry learning follows the seminal<br />
contribution of Pollit (2010) suggesting successful concepts of the mobile telecom industry<br />
transplanted into the utility. Looking at information systems <strong>and</strong> information technology components to<br />
promote sustainability is proposed by several authors (Chilamkurti et al. 2009, Dominguez 2010).<br />
In this paper, utilities <strong>and</strong> energy are used mostly associated with electricity, but should generally be<br />
abstracted into gas, district heating, water, sewage, cooling <strong>and</strong> similar network-carried resources<br />
typically provided through Public Service Obligation (PSO) regimes.<br />
2. Theory<br />
About 2008, Green IT was a major theme in IT investment <strong>and</strong> formulation of strategies (Harmon &<br />
Auseklis 2007, Jenkin 2010, Murugesan 2008). The importance of focus lies much more in green<br />
information systems where applicability, relevance <strong>and</strong> results come to dominance. This is seen with<br />
the worldwide governmentally-induced investments in smart grid technologies <strong>and</strong> broad-ranging<br />
sustainability management information systems (Misund 2010). Smart grids are – beyond the<br />
aforementioned huge investments – a cornerstone in the dyadic relationship between information<br />
systems <strong>and</strong> energy systems (Ilic 2010, Borzachiello et al. 2009). Green IT <strong>and</strong> development of<br />
information systems for increased sustainability must also be viewed in the context of innovation of<br />
the society (Herring & Roy 2007). Governmental interests might additionally include the sustainability<br />
under the umbrella of security (Department of Homel<strong>and</strong> Security 2010). Chetty et al. (2008) stress<br />
the necessity to engage households in resource management with social consciousness. The<br />
technological family of green IT is by several authors presented both in a narrower IT infrastructure<br />
context, a broader context of society, <strong>and</strong> a continuum among them with several shared technologies,<br />
such as the IP network, is seen (Hilty et al. 2005). Green IT must still be expected to remain on the<br />
agenda (Su & Al-Hakim 2010).<br />
When looking into the gap between consumers <strong>and</strong> producers of energy, few authors address<br />
realistic <strong>and</strong> straightforward information systems approaches linking actors, <strong>and</strong> supporting sale of<br />
energy is market-driven. Pollit (2010) is an important exception is his suggestion to transfer<br />
successful concepts of the mobile phone industry to utilities, with this also supported in (Kranz et al.<br />
2010, Switzer <strong>and</strong> Trout 2007). Pollit uses the analogy the original monopoly companies owning the<br />
Metallic Path Facility (MPF) as a typology to Mobile Network Operator (MNO), being forced by<br />
legislators to a higher degree of Local Loop Unbundling (LLU) (Kunneke <strong>and</strong> Fens 2007), <strong>and</strong> more<br />
diverse entities with a narrower <strong>and</strong> specialised area of working have emerged:<br />
Figure 1: Ownership unbundling in the electricity industry (Kunneke <strong>and</strong> Fens 2007)<br />
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Throughout this paper, the <strong>Information</strong> Systems as Work Systems of Alter (2008) is predominant, as<br />
uses Alter’s definition is simplicity, clarity, scope, systematic power, explanatory power, reliability &<br />
validity <strong>and</strong> fruitfulness. Bengtsson & Ågerfalk (2011) highlight the necessity of information system<br />
thinking in transformation of society’s resource utilisation. Borzachiello et al. (2009) construct an<br />
information systems architecture in underst<strong>and</strong>ing transformation towards sustainability. Clemons<br />
(1986) describes information system in a role of creating strategic differentiation in a context of<br />
strategic planning. Haigh & Griffith (2008) take this discussion further on in looking at environmental<br />
sustainability of information systems with the management of technology lens. Halfawy et al. (2008)<br />
take the helicopter perspective in looking at information systems for the observation of cities <strong>and</strong><br />
similar social structures as resource transformers with environmental impact. Interest in IS<br />
perspectives on remodelling society’s energy sector <strong>and</strong> environmental impact has still a broad<br />
orientation with information <strong>and</strong> communication technology as platform (Scheiber 2010). Other<br />
frameworks for development of information systems to support greener energy systems are presented<br />
in (Huang 2009, Jenkin et al. 2010, Nolin 2010).<br />
Alter’s (2008) suggestions include usefulness <strong>and</strong> business process support. Consumers’ behaviour<br />
still seems to be a major barrier in the transformation of the energy system, <strong>and</strong> acceptance <strong>and</strong><br />
inclusion of technologies such as smart meters in daily life move on at slow rate (Kranz et al. 2010).<br />
Strong development effort still aims at transforming citizens into relevant actors in increased<br />
sustainability of the utility sector (Hilty et al. 2005). Acceptance is strongly linked to social <strong>and</strong> cultural<br />
backgrounds, <strong>and</strong> design <strong>and</strong> orientation of IS must lean towards this issue (Sage 1999, Sharma &<br />
Ruud 2003, Schmidt et al. 2009). Barrier studies are further purported in Foxon & Pearson (2008).<br />
Formerly, there was a direct relationship between manufacturing, transportation <strong>and</strong> sale of energy. In<br />
the industrialised world, this has been dissolved largely in these three components due to<br />
deregulation <strong>and</strong> liberation of the utilities market (Hämäläinen et al. 2000). Free actors <strong>and</strong><br />
independent traders are allowed to sell energy <strong>using</strong> any network, making this the actual point-of-sale<br />
in deciding for more or less green energy; eco-labelling of energy is imposing challenges of credibility<br />
as brought forward by Banerjee & Solomon (2003).<br />
The telecom industry might serve as inspiration for the energy supplying utilities. Particularly the<br />
mobile telecom industry has undergone tremendous growth worldwide, <strong>and</strong> a plethora of business<br />
models, customer offerings <strong>and</strong> market player behaviours exist despite the recent divesture from<br />
traditional governmentally run monopolies. The appearance of mobile virtual network operators<br />
(MVNO) has harvested new customer groups among young <strong>and</strong> web-savvy consumers. Shin (2010)<br />
describes the worldwide diffusion of the concept from the Nordic countries. PRWEB (2010) describes<br />
a growth towards 188 mill subscribers; here it is important to notice that by nature, none of these<br />
operators own their own networks, <strong>and</strong> as such act unbundled from older, hardwired market actors<br />
(Peppard & Ryl<strong>and</strong>er 2006, Posttchi & Hufenbach 2009, Cadre & Bouhtou 2010, Duan et al. 2010).<br />
A contributing factor to the success of MVNO is the heavily reduced supplier switching cost. Maicas et<br />
al. (2009) describe the cost reduction in terms of competitive edge gained by IS-supported<br />
effectiveness of identity portability.<br />
3. Method<br />
The overall approach used is a mixed-method where quantitative data are viewed from a postpositivistic<br />
approach while qualitative data is viewed with an interpretivistic approach. System<br />
theoretic approaches are applied to the underst<strong>and</strong>ing of flows in business processes inspired by<br />
Business Process Network Modelling (BPMN) (Wu 2002, Smart et al. 2008, Ko 2009, Hill et al. 2008).<br />
The research area throughout this project is the employees of PowerCo <strong>and</strong> their working processes,<br />
as they are representative for the same in the future PowerCoSales. Essential factors in regards to<br />
methodology is the project awareness <strong>and</strong> recognition among PowerCo employees, as these in<br />
principle can result in lay-offs due to the system’s expected efficiency.<br />
Primary data will be acquired in shape of a questionnaire, interviews <strong>and</strong> observation. The approach<br />
towards the questionnaire is deductive, since known secondary data, in shape of Abdolvan’s (2008)<br />
theory, is used quantitatively as benchmarking. All interviews are unstructured or semi-structured as<br />
they are conducted with the purpose to obtain knowledge. These interviews are conducted with<br />
experts <strong>and</strong> consist of following an order process from request to invoice to fully comprehend the<br />
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existing processes. The observation itself is conducted with an inductive approach as best practice<br />
needs to be specified <strong>and</strong> recognised. This is complemented by <strong>using</strong> role-playing, asking each<br />
employee observed to explain every task on the go, as if the author is a new employee that needs<br />
training. The feasibility study of the software products fit with the business processes can be<br />
illustrated like this:<br />
Figure 2: Feasibility framework<br />
Secondary data is primarily acquired from the industry association (Dansk Energi) <strong>and</strong> the overall<br />
system responsible operator (Energinet.dk). As the energy legislators enforcing entity, they are<br />
regarded as a highly trusted source.<br />
Due to the size <strong>and</strong> limited duration of the project, only selected aspects will be taken into account.<br />
Despite the customer-oriented view, customer research is not directly included in this report, since<br />
focus is on the core internal work processes. However, PowerCoSales’ strategy is deeply focused on<br />
needs of free moving customers. This is an evaluation study <strong>and</strong> actual implementation is beyond the<br />
scope although mock-ups <strong>and</strong> proof-of-concept installations have been used for the evaluation.<br />
Delimitation: Conclusions are applicable for most sizes of free-market electricity dealers with a fairly<br />
regulated national backbone/infrastructure <strong>and</strong> a deregulated consumer market. Given the nature of<br />
the concrete organisational assessment presented here, a company specific element exists on the<br />
further applicability.<br />
4. Case study<br />
PowerCo is a Danish electricity trader <strong>and</strong> solutions provider founded in 2005 mainly for selling<br />
electricity in the B2B segment for larger, deregulated customers. PowerCo is owned by 10 local,<br />
smaller electricity distributors still operating under Public Service Obligations (PSO) regimes with<br />
approximately 175.000 subscribers. Legislation prohibits these smaller distributors from more direct<br />
market-driven competition. PowerCo is increasingly meant to be the competitive arm of the owner<br />
organisations. As PowerCo was settled around B2B sales, only large volumes were sold to relatively<br />
few customers with complex requirements. Thus, PowerCo’s business processes are not streamlined<br />
to manage large amounts of household customers (B2C) in an increasingly competitive market.<br />
PowerCo went to establish PowerCoSales as a business-to-consumer unit. Looking at available<br />
software solutions for PowerCoSales, most were found system-oriented <strong>and</strong> not customer-oriented.<br />
To make an efficient operating framework of PowerCoSales, the process was directed to look outside<br />
of the traditional utilities industry. Here, PowerCo was offered a software system from a company<br />
originally developed out of an innovative mobile phone company in line with the experience <strong>and</strong><br />
recommendations of Pollit (2010). The mobile phone concept was known as Mobile Virtual Network<br />
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Operator (MVNO). The software was named MVNOSoft <strong>and</strong> the company name was MVNOCo<br />
(MVNO 2010). The engagement was unique in the sense that MVNOCo hadn’t work with electricity<br />
before <strong>and</strong> PowerCo hadn’t worked with B2C <strong>and</strong> the MVNO concept before; furthermore were the<br />
most B2C utilities software industry-dedicated, legacy <strong>and</strong> in no way inciting consumers to costconsciousness<br />
<strong>and</strong> green consumption.<br />
With MVNO, a market actor in the telecom industry can establish itself without having or operating a<br />
network. MVNOCo markets this as “start your own telecom company” (MVNO 2010, Utilibil 2010). The<br />
threshold to enter <strong>and</strong> penetrate the market is significantly lowered for new actors including small<br />
companies, <strong>and</strong> traditional actors of complete different businesses, such as retailers of coffee,<br />
clothes, home electronics, or industry-dedicated actors of e.g. construction, agriculture.<br />
MVNOCo offered PowerCo implementation on fixed time <strong>and</strong> price based on a feasibility study, a<br />
requirement specification process <strong>and</strong> an integration requirement analysis. The feasibility study was<br />
based on the lenses of Total Quality <strong>Management</strong> (TQM), Business Process Re-Design &<br />
Reengineering (BPR) <strong>and</strong> Business Process <strong>Management</strong> (BPM) (Hanafizadeh et. al, 2009; Hammer<br />
et. al, 1993; Kettinger et. al, 1997; Valiris et. al, 1999).<br />
TQM is claimed to be less relevant for this project, as it emphasises an incremental <strong>and</strong> continuous<br />
level of change. These TQM terms are difficult to claim valid in a project of replicating core aspects in<br />
one industry to another, which furthermore are expected to gain substantial competitive advantage.<br />
However, TQM forms a bearing point in the discussion of Joensen (2010).<br />
The BPR initiatives face two challenges; technical <strong>and</strong> socio-cultural challenges where technical is the<br />
development <strong>and</strong> design of the business process, while socio-cultural is the organisational effects on<br />
involved individuals (Reijers <strong>and</strong> Goverde 2005). Socio-cultural challenges, such as management of<br />
change, project management <strong>and</strong> strategic management (Cummings <strong>and</strong> Worley 2008) are limited in<br />
this project, as focus will be more on techno-structural changes in terms of activities conducted in key<br />
business processes.<br />
The MVNO project can be additionally specified on Re-Design <strong>and</strong> Re-engineering by <strong>using</strong> the<br />
process type definitions on selected implication degrees (Macdonald, 1995):<br />
Figure 3: Positioning of MVNO within MacDonald’s (1995) process type definitions<br />
The MVNO-project is expected to have a medium degree of executive involvement <strong>and</strong> a medium<br />
time <strong>and</strong> cost to improvement while all the other factors are fairly high. The project can both be<br />
defined as a Re-Design <strong>and</strong> Re-Engineering project as PowerCoSales currently is a company without<br />
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employees, <strong>and</strong> this ultimately reduces the risk <strong>and</strong> degree of change. Re-engineering has a broader<br />
domain than Re-design <strong>and</strong> involves all reconstruction dimensions of the organisation from change<br />
management to project management (Hanafizadeh et. al, 2009), <strong>and</strong> can be claimed to be more valid<br />
to PowerCo <strong>using</strong> Mansar <strong>and</strong> Reijers (2007).<br />
The starting point for the BPR-project is with Davenport (1994) the claim for emphasises on certain<br />
use of existing processes <strong>and</strong> clear differentiation from the BPR founders original exhortation “Don’t<br />
automate, obliterate” (Hammer, 1993), <strong>and</strong> moves towards a degree of current practice recognition. In<br />
terms of application, it is now claimed that best practices which align with organisation strategies <strong>and</strong><br />
technical challenges should be applied (Hanafizadeh, 2009).<br />
Essential actions <strong>and</strong> results of the research process:<br />
Making workshops with MVNOSoft to operative personnel with business process insight. (26<br />
persons)<br />
Conducting a number of workshops with selected groups on mock-ups of MVNOSoft with follow<br />
on in-depth interviews. (3 x 3 persons)<br />
Identifying a number of current business processes; documenting these<br />
Comparing with business processes already supported by MVNOSoft<br />
Assessment of problem areas in move from B2B to B2C<br />
Selecting the process of shifting customers as a sample<br />
Indepth analysis of this process with users above<br />
Through mock-ups time consumption was identified to be possible to reduce from 56 minutes to<br />
12 minutes. Given forthcoming features in national infrastructure even lower figures could be<br />
reached.<br />
Consumers were not approached since MVNOSoft had a proven track record, although consumer<br />
behaviour was mapped from the experiences of the owner companies of PowerCo<br />
The MVNO feasibility study within PowerCo <strong>and</strong> PowerCoSales proved a strong alignment between<br />
business processes in most fields. Unique identity of customers, technological artefacts, customer<br />
relations, master data <strong>and</strong> shifting customers were proven to impose minor challenges in adapting<br />
<strong>and</strong> implementing the technology. Momentarily the project is postponed, as the back office integration<br />
given in the mobile phone system (GSM) seemed absent in the utilities sector. A major project to<br />
establish such an infrastructure was launched from the political/regulatory system during the feasibility<br />
study <strong>and</strong> is further described in Energinet.dk (2010). When the complete national <strong>and</strong> Nordic (or EU)<br />
information infrastructure is in place expectedly around 2012, the project is presumed to proceed.<br />
5. Discussion<br />
Greener energy implies a large range of aspects where research <strong>and</strong> media interest have mostly<br />
been on production <strong>and</strong> consumption. The B2C marketplace in many economies is still not<br />
contributing significantly to the process of greening. The feasibility of MVNO software <strong>and</strong> business<br />
processes has been the object of this study. MVNO provides a straightforward connection between<br />
traders, consumers, infrastructure operators <strong>and</strong> wholesalers. MVNO disconnects the strong link<br />
between physical infrastructure <strong>and</strong> the consumer.<br />
Green IT inspired by IT infrastructure (Harmon & Auseklis 2007) evolves into information systems for<br />
broader initiatives of sustainability in society (Borzachiello et al. 2009, Halfawy et al. 2004, Huang<br />
2009). Efficient information systems for the utility sector must be regarded with a view of<br />
transformation, innovation <strong>and</strong> change. Efficient information systems are expected to lower h<strong>and</strong>ling<br />
costs <strong>and</strong> ease penetration of new market players. Eco-labelling can easier be introduced (Banerjee<br />
<strong>and</strong> Solomon 2003). The Strompreise.de (2010) shows labelling in the electricity market generally<br />
distributed over the labels of<br />
Renewable energy (hydro, wind)<br />
Nuclear labelled with micrograms of high <strong>and</strong> low radioactive nuclear waste<br />
Thermal energy based on gas, coal <strong>and</strong> oil labelled with CO2 emission.<br />
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The Modstrøm.dk (2010) case has introduced several eco-oriented utility packages on the market,<br />
e.g. zero cost during the night, <strong>and</strong> CO2 donations to the developing countries in the billing scheme.<br />
Several authors discuss potentials <strong>and</strong> difficulties of technology acceptance of ICT in increasing<br />
households’ awareness on utility consumption (Kranz et al 2010, Olsen et al 2006, Hämäläinen et al<br />
2000). With the experiences from the cell phone industry, the MVNO concept has proved to be a fast<br />
vehicle for embedding of smart metering <strong>and</strong> smart grid in regular consumer behaviour.<br />
The feasibility study of MVNO has concluded:<br />
Adequate similarity between business processes <strong>and</strong> systems architecture in electricity <strong>and</strong><br />
mobile phone business (Pollit 2010, Posttchi <strong>and</strong> Hufenbach 2009)<br />
Good alignment with business processes of the B2C utility company (PowerCoSales) <strong>using</strong> the<br />
business process readiness approach (Abdolvan et al. 2008, Hanafizade et al 2009, Kettinger<br />
1997, Mansar & Reijers 2007)<br />
Fine level of technology acceptance within demographic group normally with less interest in<br />
metered utilities – proven in the mobile telecom market<br />
Swiss-army knife of free actors of deregulated markets<br />
Potential <strong>and</strong> suited vehicle for environmental transparency with learnings from micro billing in<br />
telecoms (Utilibill 2010, Shin 2010)<br />
The case is not directed towards green energy in first instance. The MVNO initiative should be<br />
observed more general, as it has established itself with the telecom business providing “micro billing”<br />
to the consumer <strong>and</strong> henceforth offers full transparency in the billing scheme – <strong>and</strong> subsequently<br />
environmental impact. Implementation of concepts like the German Strompreise (2010) <strong>and</strong> the<br />
Danish Modstrøm (2010) would issue no particular barriers.<br />
The case resolved that the information system MVNOSoft provided a fine support of the business –<br />
consumer relationship introducing web-based consumer self-service / full-service, EDI-services, actor<br />
linking <strong>and</strong> back-office integration. Initiatives towards smart grid <strong>and</strong> smart metering (Kranz, 2010)<br />
would be much better helped <strong>using</strong> MVNO style technologies creating strong, visual links between<br />
consumer’s cost <strong>and</strong> benefits. An information system perspective is driving in the underst<strong>and</strong>ing of<br />
the technological <strong>and</strong> organisational implications of the case with a research process indicated in<br />
figure 2. Inter- <strong>and</strong> intra-organisational user definitions must be considered: Existing-consumers-asweb-users,<br />
potential-consumers-as-web-users, front office customers service agents <strong>and</strong> back office<br />
systems along with potential technical staff in data integration <strong>and</strong> operation. This study has mostly<br />
highlighted service agents from their versatility of knowing both consumers <strong>and</strong> back office<br />
considerations. <strong>Information</strong> systems fundamentals have been proven with factors as e.g. simplicity,<br />
clarity, systematic power <strong>and</strong> explanatory power.<br />
6. Conclusion<br />
Utilities are the centre in the promotion of a greener society. Utilities are reshaping – figure 1 - from a<br />
monopoly-thinking with isolated information systems often vintage <strong>and</strong> bespoke, or information<br />
systems not adapted for linking customer <strong>and</strong> market smoothly. The utilities are in a key position to<br />
promote, change <strong>and</strong> sustain the environmental impact of every day’s energy consumption. Smarter<br />
information systems are the way forward. The MVNO concept has been reviewed in the current study.<br />
The MVNO has gained tremendous popularity in the telecom industry. The study provides reasonable<br />
evidence that MVNO is a very feasible solution to energy sales <strong>and</strong> administration with regards to<br />
business concepts <strong>and</strong> business processes. Suggestions for further research lie in fields of long-term<br />
use <strong>and</strong> acceptance of various administrative <strong>and</strong> customer-oriented systems in the energy sector.<br />
With the overwhelming investments in smart grid technologies, a new mind-set <strong>and</strong> new technologies<br />
are required to include household consumers in reducing the environmental footprint; relevant<br />
information systems as described here could be a strong part of this. Comparative studies of energy<br />
consciousness <strong>and</strong> CO2 footprint of energy systems, markets <strong>and</strong> consumers <strong>using</strong> different<br />
information systems would be highly interesting. Currently, information systems addressing<br />
demographics with other technology acceptance profiles need to be studied.<br />
Finally, the described similarity between mobile phone <strong>and</strong> energy markets forms the platform of<br />
discussion in this paper. One information system supporting identity management, supplier switching,<br />
subscriber services, multi-facetted billing schemes, self-service, a strong use of electronic messaging<br />
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Hallur Leivsgarð Joensen <strong>and</strong> Torben Tambo<br />
for back office automation add up the key concepts that could help household in underst<strong>and</strong>ing <strong>and</strong><br />
planning for a more sustainable use of energy. With relevant reservations to the research process,<br />
this study has evaluated the MVNO type of information systems <strong>and</strong> proposes this as feasible to solve<br />
the consumer gap for selected demographics in green <strong>and</strong> smart energy.<br />
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233
<strong>Management</strong> of <strong>Information</strong> Systems Outsourcing: Evaluation<br />
of Lessons Learned From a Boundary Spanning Perspective<br />
Björn Johansson 1 <strong>and</strong> Linda Bergkvist 2<br />
1 Lund University, Sweden<br />
2 Karlstad University, Sweden<br />
bjorn.johansson@ics.lu.se<br />
Linda.Bergkvist@kau.se<br />
Abstract: Even if outsourcing is a well-researched phenomenon, it can be stated that evaluation studies on IS<br />
outsourcing relationships are scarce. From a description of two IS outsourcing relationship cases, a set of lessons<br />
learned are presented. A boundary spanning perspective is then used when evaluating these lessons<br />
learned in the client-supplier outsourcing relationships <strong>and</strong> thereby adding a “new” theoretical perspective on outsourcing<br />
relationships. The evaluation is concluded in a set of propositions that present the boundary spanning<br />
perspective of the lessons learned. The aim of these propositions is to act as both a guiding tool for how to further<br />
develop boundary spanning roles in outsourcing relationships <strong>and</strong> to act as a base for future research on<br />
outsourcing relationships.<br />
Keywords: boundary spanning, IS outsourcing, relationships management<br />
1. Introduction<br />
Outsourcing of various firm processes has been increasing <strong>and</strong> still increases (Beasley et al., 2009).<br />
Lacity <strong>and</strong> Willcocks (2001) claim that organisations have realised the benefits of outsourcing such as<br />
the ability to focus on core competencies, achieving reductions in human resource costs <strong>and</strong> flexibility<br />
in tapping into technical expertise when needed. At the same time, access to global markets <strong>and</strong><br />
commercial exploitation are mentioned as strategic drivers for outsourcing (Beverakis et al., 2009)<br />
<strong>and</strong> maturity in the outsourcing market resulting in outsourcing to a high extent becoming part of firms’<br />
strategic initiatives (Ravi, 2008). It can be stated that outsourcing has been especially evident in the<br />
area of <strong>Information</strong> Systems <strong>and</strong> <strong>Information</strong> Technologies (IS/IT). A survey published by KPMG<br />
(2007) showed that 89% of the firms surveyed planned to maintain or increase their current IS/IT outsourcing<br />
level. Gonzales, Gasco <strong>and</strong> Llopis (2010) reported a global market growth with an average<br />
of 6.3% in the year 2008. In this research, IS outsourcing refers to a relationship where a firm contracts<br />
out or sells IS assets, people <strong>and</strong>/or activities to a supplier. The supplier provides <strong>and</strong> manages<br />
these assets <strong>and</strong> services for monetary returns over an agreed time period (Kern, 1997). Although IS<br />
outsourcing has experienced a dramatic growth, it can be stated that reports on lack of success make<br />
it interesting to study conditions determining successful outsourcing. To reach successful outcomes,<br />
the necessity of having better management practices has been pointed out (Gonzales et al., 2010;<br />
King & Torkzadeh, 2008). However, it is unclear what these “better management practices” in a client–supplier<br />
relationship should deal with. As stated by Lacity, Khan, Yan <strong>and</strong> Willcocks (2010), there<br />
is a need for more research with a relationship perspective in IS outsourcing research. IS outsourcing<br />
relationships face numerous challenges in developing <strong>and</strong> delivering software services across firm<br />
boundaries. Given the critical role that IS outsourcing relationships play in integrating business <strong>and</strong><br />
technical knowledge at the client-supplier boundary, it is important to underst<strong>and</strong> the challenges that<br />
they face <strong>and</strong> to identify mechanisms that enable firms to overcome these barriers to effectiveness.<br />
In this paper, lessons learned from an investigation of two IS outsourcing relationships are shortly<br />
presented. It can be claimed there exists a need of having better management practices to have success<br />
in IS outsourcing. However, as stated above, it is unclear what this better management should<br />
consist of. To be able to say something about this, we evaluate lessons learned from a boundary<br />
spanning perspective. The evaluation of lessons learned assist us when suggesting propositions on<br />
how to deal with challenges that the identified lessons learned suggested. This research aims at contributing<br />
to the knowledge base on management of IS outsourcing by addressing management of IS<br />
outsourcing in a client–supplier relationship from a boundary spanning perspective. The research describes<br />
two IS outsourcing cases that differ in activity outsourced, IS development versus IS maintenance<br />
<strong>and</strong> operation, <strong>and</strong> IS relationship composition. From evaluating the lessons learned, we go<br />
beyond just telling the story <strong>and</strong> give a richer description of how identified challenges could be dealt<br />
with in search of a better management practice in IS outsourcing relationships.<br />
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Björn Johansson <strong>and</strong> Linda Bergkvist<br />
The remainder is structured as follows. The next section first presents the research design <strong>and</strong> thereafter<br />
the two cases of IS outsourcing relationships. The presentation focuses on features of each<br />
case, such as the activity outsourced <strong>and</strong> the relationship. Section 2 then ends with presenting challenges<br />
<strong>and</strong> lessons learned from the two cases. In section 3, the boundary spanning perspective is<br />
presented <strong>and</strong> this perspective is used to analyse lessons learned. The section ends with a set of<br />
propositions for the management of IS outsourcing relationships. The propositions are discussed <strong>and</strong><br />
presented as conclusions. The final section also suggests further research in the area of IS outsourcing<br />
relationships.<br />
2. The IS outsourcing relationships <strong>and</strong> the lessons learned<br />
In this paper, we describe two IS outsourcing relationships: case DevMen <strong>and</strong> case MainOp, see Figure<br />
1. Case DevMen focuses outsourcing of IS development (ISD), whereas case MainOp focuses<br />
outsourcing of IS maintenance <strong>and</strong> operation. Empirical data for these cases has been collected<br />
through semi-structured interviews with representatives from the client firm, the supplier firm <strong>and</strong> the<br />
supplier’s offshore site. In total, 35 interviews were conducted from June 2010 until early 2011 – 20<br />
interviews for case DevMen <strong>and</strong> 15 interviews for case MainOp. The interviewees represented the<br />
business level, process level <strong>and</strong> systems level of included firms. Among those interviewed were<br />
business unit managers, heads of customer management, line managers, one ICT manager, one system<br />
manager, system designers, one service desk manager <strong>and</strong> IT/IS specialists. Each interview<br />
lasted between 1½ to 2½ hours. In addition to the interviews, documents describing the outsourcing<br />
relationships have been included. These documents have primarily been used for verifying statements<br />
from the interviewees but also as complementary sources to the interviews, which is in line with<br />
what Yin (2009) describes as data triangulation.<br />
The lessons learned, presented below, come from a qualitative data analysis inspired by the technique<br />
of open coding (Strauss & Corbin, 1990). The data generated by interviews <strong>and</strong> documents<br />
were examined <strong>and</strong> coded by foc<strong>using</strong> on the interviewees’ experienced challenges associated with<br />
their respective outsourcing relationship. Data quotes were coded, ordered in units, rearranged <strong>and</strong><br />
then categorised in themes. The results are thus grounded in data rather than imposed by theory.<br />
Both the client firm <strong>and</strong> the supplier firm are firms within telecommunication equipment <strong>and</strong> services.<br />
They have experience with outsourcing <strong>and</strong> have both national <strong>and</strong> international outsourcing relationships.<br />
The supplier firm, the focal firm in the research, has a well-developed outsourcing process,<br />
which contributes a common way of working with outsourcing. The following descriptions focus on activities<br />
outsourced <strong>and</strong> features of the outsourcing relationships. Due to confidentiality, the firms included<br />
are not mentioned by their real names.<br />
IS outsourcing<br />
Figure 1: The DevMen <strong>and</strong> MainOp case – organisations <strong>and</strong> roles<br />
235<br />
Offshore insourcing
Björn Johansson <strong>and</strong> Linda Bergkvist<br />
The IS outsourcing relationship, the DevMen case, is built upon three parties, i.e. the client firm, the<br />
supplier firm <strong>and</strong> the supplier’s offshore site. The client firm <strong>and</strong> the supplier firm are located in Sweden,<br />
whereas the supplier’s offshore site is located in the Czech Republic. The DevMen case involves<br />
two phases: first the IS outsourcing <strong>and</strong> then the “offshore insourcing”. The MainOp case involves the<br />
“offshore insourcing”. This means that there is an overlap of the cases when it comes to involved parties<br />
as shown in Figure 1, however, the two cases deals with two different systems/activities outsourced.<br />
In the DevMen case, the client decided in 2002 to outsource management, maintenance, development<br />
<strong>and</strong> support of one of its IS. This specific IS is a correction <strong>and</strong> maintenance system, which is<br />
employed by the client’s end-users <strong>and</strong> the client’s clients for trouble reporting on the client’s products<br />
<strong>and</strong> equipment. It is stated to be a business critical IS <strong>and</strong> it has to be available 24 hours a day, 7<br />
days a week.<br />
Until early 2009, the outsourcing relationship was represented by two parties: the client firm <strong>and</strong> the<br />
supplier firm’s onshore site in Sweden (the IS outsourcing in Figure 1 – the DevMen case). In 2009,<br />
the supplier received requirements on cost reductions, which resulted in maintenance, development<br />
<strong>and</strong> support being outsourced to the supplier’s offshore site in the Czech Republic, also involving the<br />
“offshore insourcing” in Figure 1.<br />
Offshore insourcing is defined by Bergkvist <strong>and</strong> Fredriksson (2008) as a special case of outsourcing<br />
when the supplier/client outsources work to an affiliated firm. However, the IS management was kept<br />
at the supplier’s onshore site. As a result, the relationship increased to include three parties, the client,<br />
the supplier’s onshore site <strong>and</strong> the supplier’s offshore site. This specific IS outsourcing arrangement<br />
is referred to as two-stage offshoring (Holmström Olsson et al., 2008), i.e. offshoring through<br />
domestic suppliers with offshore employees. The DevMen case focuses on issues related to outsourcing<br />
the development of the IS. To manage development related issues, interfaces were established<br />
between the client <strong>and</strong> the supplier’s onshore site <strong>and</strong> between the supplier’s onshore site <strong>and</strong><br />
the supplier’s offshore site, used as communication channel(s), creating a single point of contact for<br />
specific competence areas.<br />
These interfaces are used on a daily basis, as development activities are conducted in an agile way of<br />
working, where the management team <strong>and</strong> the development team meet virtually each morning during<br />
the daily st<strong>and</strong>-up meeting (see e.g., Kniberg, 2007). Almost every team member at the supplier’s onshore<br />
site communicates now <strong>and</strong> then with the IS owner. The communication relates to, for example,<br />
end-users’ <strong>and</strong> client’s requirements <strong>and</strong> requirement analysis.<br />
The relationship case, MainOp, involves the “offshore insourcing” as shown in Figure 1. The supplier<br />
is located in Sweden <strong>and</strong> the supplier’s offshore site is located in the Czech Republic.<br />
The MainOp case includes the maintenance <strong>and</strong> operation of a part of the supplier’s technical infrastructure.<br />
The technical infrastructure can be described as a business specific support process, which<br />
is divided into three parts: first line support, second line support <strong>and</strong> third line support. First line support<br />
solves more simple <strong>and</strong> routine based err<strong>and</strong>s such as password problems. Second line support<br />
manages infrastructural problems related to servers <strong>and</strong> workstations for example. Complex problems<br />
<strong>and</strong> changes, such as further development of the technical infrastructure, are managed by the third<br />
line. The third line also helps end-users with the set up of IT environments for specific projects. Thus,<br />
the first <strong>and</strong> second lines manage more routine based IS operations <strong>and</strong> the third line manages more<br />
specialised maintenance work. In the autumn of 2009, it was decided that the first <strong>and</strong> second lines<br />
should be outsourced to the supplier’s offshore site in the Czech Republic. Among the reasons mentioned<br />
were: a harmonised way of delivering services, reduction of costs, better utilisation of capacity<br />
<strong>and</strong> better service follow up. The main reason for going offshore was that the affiliated firm already<br />
had processes established for the kind of business required. Consequently, necessary competence<br />
was available immediately.<br />
To manage the support process, interfaces between the onshore <strong>and</strong> offshore site were created. In<br />
addition, interfaces at the offshore site were also created between different competence areas at the<br />
second line, as well as between the helpdesk (first line) <strong>and</strong> different competence areas at the second<br />
line.<br />
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2.1 IS Outsourcing relationships: Challenges <strong>and</strong> lessons learned<br />
Outsourcing, particularly offshore, brings geographical limitations, cultural differences, time differences<br />
<strong>and</strong> difficulties in verbal communication. This is described by Edwards <strong>and</strong> Sridhar (2005) as<br />
reasons for why unstructured <strong>and</strong> business specific activities, such as requirement analysis, are recommended<br />
not to be offshored. In the DevMen case, these were stated as reasons for keeping IS<br />
management at the onshore site. This resulted in activities such as requirement analysis <strong>and</strong> systems<br />
management still being managed at the onshore site. Relating this to what the literature recommends,<br />
this was an appropriate decision. Reasons for keeping IS management onshore could be explained<br />
by for example the complexity of the IS <strong>and</strong> the members’ deep knowledge on the client’s business<br />
processes <strong>and</strong> way of working (Vlaar et al 2008). A system manager at the supplier’s onshore site<br />
described the complexity by saying:<br />
“It is not only about knowing the product <strong>and</strong> its code but also about processes <strong>and</strong> the<br />
client’s way of working. […] The product is complex <strong>and</strong> it is difficult to underst<strong>and</strong> what it<br />
is really used for.”<br />
This is confirmed by a system designer at the supplier’s offshore site who stated “it was<br />
difficult to underst<strong>and</strong> the IS from the beginning.” The designer continued<br />
“It is hard to learn the system <strong>and</strong> to find code quickly. Some parts are difficult <strong>and</strong> you<br />
have to read much documentation to learn how the system works”.<br />
The result from this was that the onshore members had to write detailed requirement specifications<br />
<strong>and</strong> requirement analyses before they were h<strong>and</strong>ed over to the offshore site. The explanation for<br />
keeping IS management onshore can also be related to the close <strong>and</strong> informal business relationship<br />
between the client <strong>and</strong> the supplier’s onshore members. The IS owner at the client firm described the<br />
relationship:<br />
“It is completely perfect, I do not think you can have a better relationship. We trust each<br />
other <strong>and</strong> we always try to fulfill each other’s requirements <strong>and</strong> wishes.”<br />
An unreserved client–supplier relationship, the onshore members’ deep IS knowledge, <strong>and</strong> the difficulty<br />
of outsourcing business knowledge are thus reasons for keeping IS management onshore, i.e. in<br />
the same country as the client. This story illustrates the difficulty of outsourcing business specific activities<br />
<strong>and</strong> business knowledge. A lesson learned from the DevMen case is that when outsourcing<br />
business specific activities that require deep business knowledge, these activities should be kept inhouse<br />
or onshore.<br />
The decision in the DevMen case of moving maintenance, development <strong>and</strong> support to the supplier’s<br />
offshore site resulted in two teams geographically dispersed from each other, one team in Sweden<br />
<strong>and</strong> one in the Czech Republic. The onshore site team members spoke of the importance of having a<br />
leader at the offshore site that felt great responsibility towards the client <strong>and</strong> the outsourced product.<br />
The system manager at the onshore site explained:<br />
“You must have a strong person [at the offshore site]. If the team does not have a leading<br />
figure it will be extremely difficult.”<br />
Even though team members at the offshore site rarely spoke with the client, they mentioned a feeling<br />
of responsibility for the product. The team members relied on their leader <strong>and</strong> they had confidence in<br />
their leader. This was not just a result of the style of leadership but also a result of technical knowledge;<br />
their leader could answer most of their questions. A system designer at the supplier’s offshore<br />
site described the importance of a leading figure as:<br />
“It is important to have someone who is really skilled in the offshore site; somebody with<br />
technical skills, developing skills <strong>and</strong> also communication skills.”<br />
A strong leader was mainly mentioned as an advantage, however the onshore team experienced<br />
some challenges connected to having a strong leader at the offshore site. One challenge was experienced<br />
during the daily morning meetings. Each team member at the onshore <strong>and</strong> offshore site should<br />
say something in relation to: what has been done since yesterday, plans for today <strong>and</strong> problems that<br />
prevent future work (Kniberg, 2007). In reality the leader of the offshore site became the offshore<br />
team members’ spokesman. The line manager at the supplier’s onshore stated:<br />
“During Scrum meetings the idea is that everyone should say something. This was very<br />
difficult. It felt as if we had to point. It became better <strong>and</strong> better but it was difficult. They<br />
wanted to speak through their leader.”<br />
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This was experienced as a problem since the onshore team had difficulties in assessing the continuous<br />
work at the offshore site. The team members kept a low profile <strong>and</strong> the system manager at the<br />
onshore site pointed out: “Often we had to pull out information about status <strong>and</strong> their feeling, if everything<br />
was ok or not.” The offshore team members’ silence could be a result of having a strong leader<br />
but it could also be explained as a cultural matter. Czech management culture is recognised by a hierarchical<br />
approach. The line manager at the supplier’s onshore site experienced “that it was extremely<br />
hierarchical, the leader was guru <strong>and</strong> the other did not dare to say anything.” A system designer<br />
at the offshore site explained their silence <strong>and</strong> the Swedes desire to talk as a cultural<br />
difference by saying:<br />
“One cultural difference is that Swedish work climate is more open <strong>and</strong> friendly <strong>and</strong> people<br />
are more involved in discussions <strong>and</strong> meetings. We do not ask so many questions<br />
which is also visible during Scrum meetings. Here we discuss problems before the<br />
Scrum meeting <strong>and</strong> then take a note or mention it during the Scrum meeting.”<br />
From this, two things could be learned. First, the importance of having a leader at the offshore site, a<br />
person that has the ability to guide the receiving team in the right direction. This research shows that<br />
problems may follow with having a strong leadership. However, it is assumed that the advantages<br />
outweigh the disadvantages. Second it is important to be aware of each other’s cultural differences in<br />
order to better underst<strong>and</strong> different ways of working <strong>and</strong> behaviours.<br />
The “offshore insourcing” in the DevMen case resulted in the outsourcing relationship consisting of<br />
three parties. The supplier’s onshore site <strong>and</strong> offshore site should however act as one towards the<br />
client. The line manager at the supplier’s onshore site mentioned the importance of creating a team<br />
<strong>and</strong> a feeling of ‘we’ instead of ‘we <strong>and</strong> them’:<br />
“Our main focus was on how we should perform work: we should work with scrum, we<br />
should meet. We should be a team with good communication. We should work together<br />
<strong>and</strong> meet face-to-face as often as possible.”<br />
Besides the possibility to meet face-to-face during the knowledge transfer, the agile way of working<br />
was mentioned as contributing to a team feeling. Agile methods promote daily meetings <strong>and</strong> short development<br />
cycles (Lindstrom & Jeffries, 2004), which have facilitated the activity of getting to know<br />
each other. One system designer at the offshore site mentioned strengths with the relationship: “We<br />
respect each other, the relationship is friendly <strong>and</strong> we try to respond to each other as soon as possible.”<br />
A lesson learned from the DevMen case then is that agile methodologies, such as Scrum, are<br />
preferable when development is conducted by geographically dispersed teams.<br />
In the MainOp case, members at the third line support mentioned the problem with work tasks (tickets)<br />
going ping-pong between the second <strong>and</strong> third lines. The ICT manager at the supplier’s onshore<br />
site described this by giving the following example:<br />
Say that a ticket passes the first <strong>and</strong> second line <strong>and</strong> arrives to us at the third line. We<br />
look at it <strong>and</strong> assess it as a ticket that should have been managed at the first or second<br />
line. As a result, we send it back with a note saying something like: this you ought to<br />
have managed. And then the ticket comes back to us with the message: but we have not<br />
received any instructions.<br />
The underlying cause for this problem with sending work tasks back <strong>and</strong> forth is believed to be related<br />
to the non-existence of clear <strong>and</strong> written specifications for what should be solved at the second <strong>and</strong><br />
third line respectively. The Unix specialist at the supplier’s onshore site requested “an explicit definition<br />
of which services should be transferred <strong>and</strong> which should be kept onshore.” When support concerns<br />
a business specific infrastructure, as in this case, the importance of instructions becomes even<br />
clearer, as pointed out by both the second <strong>and</strong> third line. The Unix specialist at the offshore site described<br />
the technical infrastructure as being one of the biggest <strong>and</strong> strangest he had ever worked<br />
with. The specialist’s words were: “Because it is not st<strong>and</strong>ardized, because it was built during many<br />
years by only a few persons. They have done it by themselves <strong>and</strong> everybody had everything in their<br />
minds.” This makes instructions necessary for knowing what should be solved at the second <strong>and</strong> third<br />
line. From this, two things could be learned. First, it is essential that actors at both the sending firm (in<br />
case MainOp the sending firm is the same as the supplier’s onshore site) <strong>and</strong> the offshore site have a<br />
common underst<strong>and</strong>ing of what each party is intended to manage. Second, the business processes<br />
<strong>and</strong> the set up of technical infrastructures need to be documented so that the offshore site can manage<br />
their part of the agreement. This is particularly important when the outsourced activity is tailor-<br />
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built. Consequently, it is recommended that an outsourcing knowledge transfer should include work<br />
packages for documentation, the creation of formalised instructions <strong>and</strong> h<strong>and</strong>s-on training.<br />
Other challenges in the MainOp case are related to differences in ways of working. The supplier’s offshore<br />
site, which manages first <strong>and</strong> second line support, is referred to as a factory, supporting several<br />
clients. This means that the work processes have similarities with industrialised, routine based work.<br />
The first <strong>and</strong> second lines support a range of different clients but how it is done does not differ. The<br />
outsourcing coordinator at the supplier’s offshore site summarised the challenge of different ways of<br />
working as:<br />
“The way of working in Sweden is very, very different from way of working here in [the<br />
offshore site]. Basically it is about that in Sweden the support was in a very customer oriented<br />
way, very tailored way, it was not so much based on processes, it was based basically<br />
on a very close relationship towards the customer <strong>and</strong> there was a dedicated team<br />
for the support. This is something that we do not have in [the offshore site]. This is a big<br />
service center, <strong>and</strong> it is a very process <strong>and</strong> rigid directed way of working, strictly based<br />
on processes. It is more like a factory so to say. I guess that a lot of people in Sweden<br />
were surprised how we work <strong>and</strong> how we organize our work. So this is more or less the<br />
big difference between the [offshore site] factory approach <strong>and</strong> this very customer oriented<br />
approach in Sweden. This was the main challenge during the outsourcing preparations”.<br />
From this it can be stated that IS outsourcing should be preceded by an examination of involved parties’<br />
way of working so that differences not will be a surprise when outsourcing becomes actual.<br />
During outsourcing, the need of communication channels came apparent. Team members at the third<br />
line of support experienced the necessity for single point of contact to facilitate the communication between<br />
the second <strong>and</strong> third lines of support. The Unix specialist at the supplier’s onshore site said:<br />
“Channels of communication are important for knowing with whom to communicate. It<br />
does not have to be a personal relation but communication must be easy. For example if<br />
I want to share information with a group of people I can use this communication channel.<br />
Then I know that the information has received the other ones. The communication channel<br />
can be informal or formal; the main thing is that communication is easy”.<br />
Through a single point of contact, it becomes possible to share information between different teams<br />
through one person. Thus, communication channels, such as a single point of contact, are believed to<br />
facilitate problems related to information <strong>and</strong> knowledge sharing. However, the team members at the<br />
first <strong>and</strong> second lines of support did not mention any problems connected to communication <strong>and</strong> information<br />
sharing. Explanations are related to the fact that they received answers to most of their<br />
questions <strong>and</strong> if they did not, unmanaged tickets were passed on to another competence area or to<br />
the third line. From this, it can be stated that communication channels for information <strong>and</strong> knowledge<br />
sharing are important in outsourcing relationships.<br />
Another finding from the MainOp case is that employees from the third <strong>and</strong> second line differ in their<br />
mentality towards their client, i.e. the end-users. It is stated that third line support always strives for<br />
satisfied end-users <strong>and</strong> that is why they help the second line when needed: if they did not, the enduser<br />
would suffer. For the second line, on the other h<strong>and</strong>, the end-users are quite unknown <strong>and</strong> that is<br />
why their motivation is related to the business agreement rather than to satisfied end-users. The outsourcing<br />
coordinator at the supplier’s offshore site explained it as: “We miss this very close relationship<br />
with the customer. […] We really make it work based on service level agreements.” Thus, people<br />
at the second line do their work according to what is written in the business agreement. One explanation<br />
for this is that the second line supports a lot of different clients <strong>and</strong> end-users. From this it, can be<br />
recommended that expectations should be discussed during outsourcing preparations to avoid misunderst<strong>and</strong>ings<br />
later on. One lesson learned from the MainOp case is that not only representatives<br />
from the business level should be part of the preparations, but also representatives from the system<br />
level <strong>and</strong> process level, to be able to learn more about each other.<br />
Lessons learned from the DevMen <strong>and</strong> the MainOp cases are summarised in Table 1. They are then<br />
discussed from a boundary spanning perspective in the next section.<br />
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Table 1: Summary of lessons learned from the DevMen <strong>and</strong> MainOp cases<br />
Lessons learned Main source<br />
Keep IS activities that require deep business knowledge in-house or onshore DevMen case<br />
Make sure to have a strong leader at the offshore site DevMen case<br />
Learn about differences in organisational culture during IS outsourcing preparation DevMen case<br />
Adopt agile ways of working to facilitate cooperation <strong>and</strong> the feeling of working as one DevMen case<br />
team in geographically dispersed teams<br />
Make sure that actors at both the onshore site <strong>and</strong> the offshore site have a common un- MainOp case<br />
derst<strong>and</strong>ing of each party’s expectations <strong>and</strong> responsibilities according to the IS outsourcing<br />
agreement<br />
When outsourcing tailor-built IS, detailed IS specifications should be included as part of MainOp case<br />
the knowledge transfer<br />
IS outsourcing should be preceded by an examination of involved parties’ way of working MainOp case<br />
Established communication channels for information <strong>and</strong> knowledge sharing are crucial<br />
during IS outsourcing relationships<br />
3. Concluding propositions from a boundary spanning perspective<br />
MainOp case<br />
The boundary spanning perspective has a potential in describing outsourcing relationships as described<br />
by Du <strong>and</strong> Pan (2010). They define boundary spanners as someone who operates at the periphery<br />
of an organisation. This person could then be described as having a boundary role, <strong>and</strong> according<br />
to Aldrich <strong>and</strong> Herker (1977) there are basically two functions performed by boundary roles:<br />
information processing <strong>and</strong> external representation. The information processing role is described as<br />
dealing with information overload. The basic thought about the information processing function is that<br />
it should be able to select information acting as both filters <strong>and</strong> facilitators. As stated by Aldrich <strong>and</strong><br />
Herker (1977), the information processing function of a boundary role decides an organisations ability<br />
to adapt to environmental contingencies. However, it is dependent on the expertise of the boundary<br />
role incumbents <strong>and</strong> the success in selecting, transmitting, <strong>and</strong> interpreting information. The external<br />
representation function is then related to how an organisation responds to environmental influence<br />
(Aldrich & Herker, 1977). Aldrich <strong>and</strong> Herker (1977) describe three different ways for dealing with environmental<br />
constraints <strong>and</strong> contingencies: first, by an internal structural differentiation match patterns<br />
of relevant information; second, by gaining power over relevant elements in the environment, <strong>and</strong><br />
from that manipulating it so that it conforms to the organisation’s needs; <strong>and</strong> third, a compromise position<br />
which means a modal pattern of use of boundary personnel. In summary, it can be said that individuals’<br />
technical <strong>and</strong> communicative abilities constitute the organisation’s boundary-spanning capability<br />
(Du & Pan, 2010).<br />
It can be stated that IS outsourcing relationships face numerous challenges in developing <strong>and</strong> delivering<br />
software services across firm boundaries. This is especially the case in the context of information<br />
systems development. Fisk et al (2010) state that a persistent problem in the IS development context<br />
is the different parties’ different knowledge. They also state that this boundary problem hinders project<br />
success <strong>and</strong> they claim that boundary spanning significantly affects IS development success. According<br />
to Levina <strong>and</strong> Vaast (2008), the boundaries are related to lack of shared economic, intellectual,<br />
social, <strong>and</strong> symbolic resources. To deal with these boundaries, it can be said that boundary spanners<br />
are necessary, but it can also be said that they need to be developed to deal with a specific set of<br />
tasks. This is described in a set of propositions that aims at shaping future research but also as guidance<br />
for how to think about IS outsourcing relationships.<br />
The analysis of lessons learned from the cases from the boundary spanning perspective resulted into<br />
the following propositions:<br />
Proposition 1: IS activities that require frequent face to face interaction <strong>and</strong> deep business knowledge<br />
should be kept in-house if the boundary spanner role that deals with the information overload is<br />
are present at either of the organisations in the IS outsourcing relationship.<br />
However, to deal with the information overload there is a need to decide on what information the different<br />
actors in the relationship are dependent on, which, if not totally clear, according to Shao <strong>and</strong><br />
David (2007), could be one reason to remain onshore.<br />
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Proposition 2: An extensive boundary spanner role is crucial when developing new <strong>and</strong> immature<br />
outsourcing relationships with non-established processes for ways of working.<br />
This can be related to the statement by Holmström, Olsson et al (2008) who state that when establishing<br />
new offshore relationships, designers need to be trained extensively.<br />
To be able to develop this extensive boundary spanner role, it can be suggested that there is a need<br />
to examine organisational culture in depth <strong>and</strong> that it should be done before the implementation of the<br />
outsourcing as suggested in proposition 3.<br />
Proposition 3: The client’s <strong>and</strong> supplier’s organisational cultural differences should be examined in<br />
the preparation phase of the IS outsourcing relationship.<br />
It is stated by for instance Fabriek et al. (2008) that the more cultural alike <strong>and</strong> the more familiar the<br />
client <strong>and</strong> the supplier are, the more likely it is that the relationship will bring successful outcomes.<br />
They state that team members should be introduced on both sides to learn about each other’s way of<br />
working, in order to reduce distances related to organisational fundamentals. However, if there are<br />
cultural differences, it ought to be of interest to have knowledge about these to be able to deal with<br />
them.<br />
Proposition 4: Boundary spanners have a specific importance when outsourcing relationships are<br />
new <strong>and</strong> immature.<br />
As described Holmström, Olsson et al. (2008), in new <strong>and</strong> immature outsourcing relationships, intense<br />
communication on a daily basis between both managers <strong>and</strong> designers is important due to nonestablished<br />
ways of working. This means that it is fruitful to adopt a development methodology that<br />
focuses on the team rather than on the techniques. It also means that a common underst<strong>and</strong>ing of<br />
each party’s expectations <strong>and</strong> responsibilities according to the contractual agreement is necessary<br />
<strong>and</strong> the boundary spanner plays a crucial role for being able to have that. Lee et al (1999) state that a<br />
prerequisite for managing outsourcing relationships is the client’s <strong>and</strong> the supplier’s common underst<strong>and</strong>ing<br />
<strong>and</strong> a systematic way of working. It can also be related to what Davey <strong>and</strong> Allgood (2002)<br />
recommend about IS: that packaged IS solutions are preferable to tailor-built IS, since packaged systems<br />
often are well specified. From this, it can be stated that tailor-built IS should not be outsourced<br />
but they can be if boundary spanners have a specific role in making sure that detailed IS specifications<br />
are included in the knowledge transfer.<br />
All of this can be concluded in the final proposition, proposition 5 that states that: Communication<br />
channels must be in place to reach desired levels of knowledge exchange quality <strong>and</strong> for informal<br />
communication opportunities.<br />
It can be concluded that boundary spanners at both ends of the relationship play an extremely important<br />
role in this context.<br />
This research contributes to the knowledge base on the management of IS outsourcing relationships<br />
by describing lessons learned from two cases. From this, some propositions are presented that aim to<br />
act as both a guiding tool for how to further develop boundary spanner roles in outsourcing relationships<br />
<strong>and</strong> to act as a base for future research on outsourcing relationships.<br />
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Communications of the ACM, 50(2): 89-94.<br />
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242
A Fair Partnership Model by Sharing the Benefit of<br />
<strong>Knowledge</strong> Creation<br />
Ghassan Kbar<br />
Riyadh Techno Valley, King Saud University, Saudi Arabia<br />
gkbar@ksu.edu.sa<br />
gahkbar@yahoo.com<br />
Abstract: Sharing of information <strong>and</strong> knowledge as well as providing the relevant financial support is the main<br />
factor for creating innovations, while protecting the Intellectual property (IP) will satisfy the requirement for<br />
sharing of knowledge fairly <strong>and</strong> preserve the right of the inventors. In order to benefit from the innovations by<br />
creating or enhancing the characteristics of associated products at science parks, investors need to be<br />
encouraged for spending enough funds for the development. This can be done by providing a fair partnership<br />
model that intends to identify the role, right, <strong>and</strong> responsibility of each party, in addition to providing a good<br />
incentive program to attract the Venture Capital (VC) fund to support the project development. In this paper, a<br />
survey has been conducted to evaluate projects that are running in Saudi Arabia in order to underst<strong>and</strong> the<br />
difficulties in attracting funds through a Venture Capital program, so the proper solution can be recommended.<br />
Moreover, a proper partnership model that is based on a good incentive <strong>and</strong> a fair sharing of profit <strong>and</strong> risk is<br />
presented. Two categories of partnership models <strong>and</strong> fair methods for sharing the benefit of IP <strong>and</strong> the Return of<br />
Investment ROI have been proposed. These categories are based on sharing the development <strong>and</strong> investment.<br />
The partnership development model includes the owner of the idea, the funding partner, <strong>and</strong> the operational<br />
partner. The calculations of the two partnership models have been presented, which highlight on the distribution<br />
of profit or loss in a fair manner. Providing a fair partnership solution would improve the trust among partners <strong>and</strong><br />
attracted them to work harder toward successful projects<br />
Keywords: knowledge economy, partnership, venture capital, investment<br />
1. Introduction<br />
<strong>Information</strong> sharing is critical for the creating of useful knowledge. At the same time protecting the<br />
Intellectual property (IP) satisfies the requirement for sharing of knowledge to a certain group, <strong>and</strong><br />
encourages innovators, researchers, partners <strong>and</strong> investors to put extra effort to develop their ideas<br />
towards innovation. Networks encourage sharing of knowledge <strong>and</strong> play an important role for bringing<br />
innovation-specific resources <strong>and</strong> expertise for entrepreneurial teams to create new opportunities<br />
(Rothwell 1991), <strong>and</strong> (Zaheer 2005). Stakeholders such as government agencies, universities,<br />
science parks, suppliers <strong>and</strong> competitors have a great influence on innovation (Gibb 1995). In<br />
addition, partnership between industry <strong>and</strong> universities has been considered in many countries as<br />
part of national policies to strengthen innovation. Most innovative firms, around 90%, had formal links<br />
with universities according to study done by Wilkinson et al. (1996). Additionally, a significant<br />
relationship was found between the introduction of new products <strong>and</strong> university networking (Freel<br />
2003). Hence, collaboration among universities <strong>and</strong> industries as well as government agencies,<br />
science parks <strong>and</strong> investors is highly recommended for successful innovative products. Since there<br />
would be many parties involved in the development <strong>and</strong>/or investment to create product from the<br />
innovation, there should be a proper <strong>and</strong> fair way to share the benefit <strong>and</strong> profit/loss of the<br />
investment. This can be done through an attractive partnership model. Where the model should<br />
identify what the partnerships can accomplish, the initial terms <strong>and</strong> conditions to be, the best way of<br />
communication that can be used to discuss their possible involvement, the development of a fair<br />
business sharing model, <strong>and</strong> what role <strong>and</strong> commitment of each party to have.<br />
In order to have an effective partnership relationship management, there is a need to build<br />
partnership culture, which can be done through openness, creativity, ability, <strong>and</strong> resiliency (Stephen<br />
2006). Building a trust <strong>and</strong> mutually beneficially relationship is the main criteria for accomplishing the<br />
goals of all partners to obtain an effective partnership. According to Stephen (2006), this can be done<br />
by; all partners are entered in the agreement voluntarily, all partners have equal power <strong>and</strong><br />
accountability, all partners share information <strong>and</strong> knowledge openly, all partners are equally valuable,<br />
all partners want to arrive at the best outcome, <strong>and</strong> partners seek out <strong>and</strong> support success for other.<br />
Partnership culture should be based on a fair model, where fairness becomes the main critical issue<br />
for successful partnership since it provides a good chance for partners to accept the deal <strong>and</strong> allows<br />
them to quickly grow their business together. Partner Relationship <strong>Management</strong> (PRM) is about<br />
underst<strong>and</strong>ing the needs of one’s business partners to satisfy those needs while maintaining the trust<br />
among all parties. In order for partners to underst<strong>and</strong> each other commitments in the partnership<br />
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model, Stephen (2006) developed a survey with 15 questions that are focused of building trust,<br />
solving conflict, meet the needs of partners, sharing information <strong>and</strong> experiences, respect other party<br />
time, reinforcing the vision, monitoring the relationship, providing constructive feedback, how to reach<br />
the proper decisions, addressing the hard time, <strong>and</strong> celebrating the accomplishments.<br />
The current practice in almost all organizations doesn’t tackle the partnership issues fairly to attract<br />
partners <strong>and</strong> investors to contribute to the development <strong>and</strong> investment cycles. In order to build an<br />
effective partnership that is based on trust, a strategic framework that defines the vision, mission <strong>and</strong><br />
strategic directions has to be done first. Then a proper partnership culture should be prepared. A fair<br />
partnership model would boost the trust <strong>and</strong> prepare the ground for best partnership culture.<br />
Moreover, fairness is associated with fair in responsibility <strong>and</strong> commitment, fair in right <strong>and</strong> benefit,<br />
<strong>and</strong> fair in distributing the rewards <strong>and</strong> celebrating the accomplishments. On the other h<strong>and</strong>, a<br />
mechanism for assessing the value flows at the individual role level within partnerships has been<br />
covered by Optimice (2008). Where, the fundamental process for creation of the Partnership<br />
Scorecard is value network analysis (VNA). VNA identifies both tangible <strong>and</strong> intangible value flows<br />
between identified roles in the partnership. In this way performance is assessed at the “role” level<br />
enabling corrective or enhancement actions to be implemented directly. Fairness in development <strong>and</strong><br />
investment partnerships can be achieved by calculating the overall cost of the system associated with<br />
these partnerships, <strong>and</strong> based on the contribution of each party there would be appropriate benefit. In<br />
addition to fairness, there should be a proper incentive program which brings confidence <strong>and</strong> used to<br />
attract the Venture Capital (VC) organizations or bodies to fund the project development. This has an<br />
effect on improving the climate of investment <strong>and</strong> building the trust among researchers <strong>and</strong> the VC<br />
bodies. In order to achieve this target, it is recommended to simplify the administrative procedures at<br />
all institutions related to investment activity, intensify the advisory side to strengthen the confidence in<br />
investment environment, solve the problems of corruption <strong>and</strong> mismanagement, <strong>and</strong> encourage the<br />
foreign investment.<br />
A partnership model allows funders to share the responsibility <strong>and</strong> profits where VC tries to facilitate<br />
the work between the investors <strong>and</strong> funder by getting some financial reward for the funder that ranges<br />
from 15% to 30%, in addition to around 2.5% for management expensive. This is unlike a bank loan<br />
where the investors have to return the loan plus interest in regards whether the project is successful<br />
or not, but in VC the investors would take all the profit generated from their projects. To build the trust<br />
between funders through VC <strong>and</strong> investors <strong>and</strong> reducing the risk, the fund can be done in different<br />
steps which can be aligned to seed fund phase, starting phase, growing <strong>and</strong> development phase,<br />
transition phase, final funding phase <strong>and</strong> exit phase. There are some disadvantages for partnership<br />
through VC, such as the involvement in managing the project which might direct it to different<br />
direction that is the opposite to the will of executive managers, <strong>and</strong> the high risk that might be<br />
associated with loosing the invested money in case of project failure. By looking at the case of<br />
funding projects <strong>and</strong> companies in the development countries such as King Saudi Arabia (KSA), there<br />
are around 700 companies or projects have been licensed but couldn't start because of the lack in<br />
funding <strong>and</strong> expertise (Saudi-chamber 2011). To overcome this problem, these projects can be<br />
evaluated to attract funding through Venture Capital program, where proper partnership models that is<br />
based on good incentive <strong>and</strong> fair sharing of profit <strong>and</strong> risk can be adopted. The role of government<br />
has facilitated the VC funding for small <strong>and</strong> medium projects to minimize the risk (Saudi-fund 2011).<br />
There are advantages of funding projects through partnership compared to loan funding which<br />
includes the following: partnership commitment according to participation, the ability to distribute profit<br />
among partners according to level <strong>and</strong> amount of share, the possibility of partner exiting the projects<br />
by selling its shares. However, the disadvantage of partnership model is the possibility of stopping the<br />
execution of the projects in case some partners can't commit to provide the agreed funding. Funding<br />
projects through Incubators <strong>and</strong> Science Parks can be done to support innovation (Sophia-antipolis<br />
2011), (Galbraith 2002), <strong>and</strong> (ncsu 2011). Science parks at development countries are facing<br />
difficulties in attracting companies to have partnership <strong>and</strong> to fund the technological projects. These is<br />
related to lack of trust among investors in the research outcome, lack of knowledge in Venture Capital<br />
funding, some of the legal constraints that discourages the investment in technologies, weakness <strong>and</strong><br />
lack of management skills, <strong>and</strong> lack of fair partnership models. In the following section VC project<br />
funding at KSA would be analyzed to determine the obstacles facing its progress, <strong>and</strong> in section III,<br />
fair partnership models are presented to attract investors <strong>and</strong> innovators to work together.<br />
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2. Partnership <strong>and</strong> VC project funding in KSA<br />
In order to identify the problems facing the technological entrepreneurship projects at KSA, a survey<br />
has been conducted through contacting companies' managers in Saudi Arabia as shown in Figure 1.<br />
According to this survey, the most critical obstacles facing the VC project funding are related to lack of<br />
skills (61%), education programs (54%), research capability (51%), <strong>and</strong> management (37%), which all<br />
contributes to lowering the trust among investors <strong>and</strong> funders. There are other obstacles associated<br />
with funding constraints that are caused by the lack of knowledge <strong>and</strong> good incentive program to<br />
attract partners through a fair partnership models. There are some other obstacles associated with<br />
acquiring knowledge, existing regulations <strong>and</strong> conf<strong>using</strong> procedures <strong>and</strong> company processes. These<br />
results give an indication to the main obstacles facing the development countries, where skills,<br />
experiences <strong>and</strong> knowledge are the main factors in slowing down the creation of knowledge based<br />
economy compared to the existence of funding. This will reduce the trust among VC organizations to<br />
involve in the partnership <strong>and</strong> to support the development of technological projects.<br />
Figure 1: Obstacles <strong>and</strong> difficulties facing technological entrepreneurship projects at KSA<br />
3. Fair partnership models<br />
Two categories of partnership models <strong>and</strong> fair methods for sharing the benefit of IP <strong>and</strong> the Return of<br />
Investment ROI are described in this section. These categories are based on development <strong>and</strong><br />
investment. In both partnership models, the following methodology describes how to reach a effective<br />
fair partnership. First, the involved parties have to be determined. Then, their direct <strong>and</strong> indirect<br />
contributions to the shared project would be identified, <strong>and</strong> finally the formulas that calculate the value<br />
of the project at a particular time <strong>and</strong> how profit or loss can be distributed fairly among partners need<br />
to be done. The partnership development model includes the following parties, the owner of the idea,<br />
the funding partner, <strong>and</strong> the operational partner. Up on completion of the development, these 3<br />
parties would share the value of IP that is based on the stage of innovation <strong>and</strong> partner’s<br />
contributions. Where there are 4 innovation stages which include novel idea, proof of concept,<br />
prototype, <strong>and</strong> advance prototype. The following presents the percentage contribution of each party,<br />
<strong>and</strong> the calculation of the development partnership model that is based on the bellow assumptions:<br />
D = Total expense of development (for the period of the projects)<br />
P = Partnership development contribution = D/X, where 1/X is the percentage of contribution<br />
K = Science Park development contribution = D(1 – 1/X)<br />
V = Value of IP<br />
Idea Owner share = O<br />
R = Residue of share = V – O<br />
Partner share of V = [(1/X)*100]% of R = y of R<br />
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Science Park share of V = [100-(1/X)*100]% of R = z of R<br />
Assumptions: for New Ideas O = 50% of V, for Proved Ideas O = 60% of V, for Prototype O = 70%<br />
of V, for Advance prototype O = 80% of V.<br />
Therefore, the science park share of IP would be: z of (V – O), <strong>and</strong> the Partner share of IP would be y<br />
of (V – O)<br />
Development Partnership Calculation:<br />
As shown in Table 1, the formula used for calculating the benefit of all partners in the development<br />
partnership model is presented, <strong>and</strong> Table 2 shows an example for sharing the IP benefit. The<br />
following assumptions <strong>and</strong> formulas are used in the tables:<br />
D = Total expense of development (for the period of the projects) = equip cost + office cost +<br />
service cost + training cost + developer cost + travel cost + core equip cost<br />
P = Partnership development contribution = D/X<br />
K = Science Park development contribution = D(1 – 1/X)<br />
V = Value of IP<br />
Idea Owner share = O<br />
R = Residue of share = V – O<br />
Partner share of V = [(1/X)*100]% of R = y of R<br />
Science Park Share of V = [100-(1/X)*100]% of R = z of R<br />
Table 1: Sharing of intellectual property formula<br />
Entering state of the projects<br />
New Ideas Proved Ideas Prototype Advance prototype<br />
Intellectual Owner share of O = 50% of O = 60% of V O = 70% of V O = 80% of V<br />
property<br />
IP<br />
V<br />
Science Park<br />
share of IP<br />
z of (V – O)<br />
Partner share of<br />
IP<br />
y of (V – O)<br />
Example: D = 6,000,000 SR, X = 3, V = 20,000,000 SR<br />
P = 6,000,000/3 = 2,000,000 SR (Partner contribution)<br />
K = 6,000,000 – 2,000,000 = 4,000,000 (Science Park contribution)<br />
Y = [(1/X)*100]% = (1/3*100)% = 33 %<br />
z = [(100- 1/X)*100]% = (100-1/3*100)% = 67 %<br />
Table 2: Example for sharing of intellectual property calculation<br />
Entering state of the projects<br />
New Ideas Proved Ideas Prototype Advance<br />
prototype<br />
Intellectual Owner share of O = 50% of V = O = 60% of V = O = 65% of V = O = 70% of V =<br />
property IP<br />
10,000,000 12,000,000 13,000,000 14,000,000<br />
Science Park z of (V – O) = z of (V – O) = z of (V – O) = z of (V – O) =<br />
share of IP 67%<br />
67%<br />
67%<br />
67%<br />
(20,000,000- (20,000,000- (20,000,000- (20,000,000-<br />
10,000,000) 12,000,000) 13,000,000) 14,000,000)<br />
=6,700,000 =5,360,000 =4,690,000 =4,020,000<br />
Partner share of y of (V – O) = y of (V – O) = y of (V – O) = y of (V – O) =<br />
IP<br />
33%<br />
33%<br />
33%<br />
33%<br />
(20,000,000- (20,000,000- (20,000,000- (20,000,000-<br />
10,000,000) 12,000,000) 13,000,000) 14,000,000)<br />
=3,300,000 =2,640,000 =2,310,000 =1,980,000<br />
EL=Expense left D-D = 0 5%D = 300,000 10%D = 600,000 15%D =<br />
over (Science<br />
Park)<br />
sR<br />
sR<br />
9,000,000 SR<br />
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Entering state of the projects<br />
New Ideas Proved Ideas Prototype Advance<br />
prototype<br />
6.7 m – 4 m = 5.36 m – 4 m + 4.69 m – 4 m 4.02 m – 4m +<br />
Science Park<br />
profit<br />
2.7 m<br />
0.3m = 1.66m<br />
Partner profit 3.3m-2m= 1.3m 2.64m-<br />
2m=0.64m<br />
Investment Partnership Calculation:<br />
+0.6m = 1.29 m<br />
2.31m-<br />
2m=0.31m<br />
0.9m = 0.92m<br />
1.98m-2m=-<br />
0.02m<br />
The partnership investment model includes the owner of IP, the investing partner, the funding partner,<br />
<strong>and</strong> the operational partner. At any stage of the investment, these 4 parties would share the value of<br />
the business which based on the invested capital or partners’ contributions, the current value of IP<br />
<strong>and</strong> the current value of the business. The proposed method provide fair distribution of benefit which<br />
preserve the right of involved parties <strong>and</strong> consequently attract partners to invest in developing new<br />
innovation <strong>and</strong> creating useful products. The development partnership model would be excellent for<br />
Incubation, <strong>and</strong> the investment partnership model would be excellent for Science Park.<br />
As shown in Table 3, the formula used for calculating the benefit of all partners in the investment<br />
partnership model is presented, Table 4 shows an example for sharing the profit generated from this<br />
investment, <strong>and</strong> Table 5 shows another example for sharing the loss generated from this investment.<br />
The following assumptions <strong>and</strong> formulas are used in the tables:<br />
I = Total expense of Investment (for the period of the projects) = value of IP + equip cost+<br />
operation cost<br />
Pi = Partnership Investment contribution = I/w<br />
Fi = Funder Investment contribution = I/F<br />
Ki = Science Park Investment contribution = I – I/w – I/F<br />
V i= current Value of Investment<br />
Initial Value of IP = V<br />
Current Value of IP =Vc =V+20% of (Vi-I)<br />
ROI =Return of Investment or Profit/Loss of Investment = Vi-I-Vc<br />
Partner share of Vi = [(1/w)*100]% of ROI = p of ROI<br />
Funder share of Vi = [(1/F)*100]% of ROI = q of ROI<br />
Science Park Share of Vi = [100-(1/w+1/F)*100]% of ROI = s of ROI<br />
Table 3: Sharing of investment partnership formula<br />
IP owner Science Park Partner Funder<br />
Investment cost<br />
percentage<br />
0 [1-(1/W+1/F)]% of I 1/W% of I 1/F% of I<br />
ROI percentage<br />
of parties<br />
V-Vc s of ROI p of ROI q of ROI<br />
In order to calculate the profit or loss at a particular time in the partnership investment model, there is<br />
a need to know the correct value of the project investment including the value of current IPs, the<br />
overall cost of the project <strong>and</strong> its current assets, <strong>and</strong> the market value of the product outcome, in<br />
addition to the indirect business value such as knowledge <strong>and</strong> employees experiences. The most<br />
challenging issue is related to accurate estimation of the current IPs <strong>and</strong> knowledge creation,<br />
whereas the estimation of current assets <strong>and</strong> product value would be easier. The estimation of<br />
knowledge <strong>and</strong> employees experiences is subjective <strong>and</strong> depends on how relevant these parameters<br />
to organizations or partner. Therefore, the current value of investment has to be calculated on a<br />
project basis, where the indirect benefit related to knowledge <strong>and</strong> experiences might vary from<br />
country to country, <strong>and</strong> from organizations to other. Example experiences <strong>and</strong> knowledge in<br />
development countries would be valued more than developed countries because of the relatively low<br />
st<strong>and</strong>ard education in these development countries.<br />
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Example (profit): Investment cost: I = 50,000,000 SR , Pi: 1/W=30%, Fi=1/F=50%, Ki=20%, Initial<br />
value of IP V= 20,000,000 SR<br />
V i= current Value of Investment = 100,000,000 SR<br />
Current value of IP = Vc = 20m+0.2*(100m-50m)=20m+10m=30m<br />
ROI = Vi-I-Vc = 100m-50m-10m = 40m<br />
Table 4: Example for sharing the profit of investment partnership calculation<br />
IP owner Science Park Partner Funder<br />
Investment cost<br />
percentage<br />
0 0.2*50m= 10m 0.3*50m= 15m 0.5*50m= 25m<br />
ROI percentage of V-Vc=25m-<br />
s of ROI = p of ROI = 0.3*40m q of ROI = 0.5*40m<br />
parties (profit) 20m=5m 0.2*40m= 8m<br />
= 12m<br />
= 20m<br />
Example (Loss): Investment cost: I = 50,000,000 SR , Pi: 1/W=30%, Fi=1/F=50%, Ki=20%, Initial<br />
value of IP V= 20,000,000 SR<br />
V i= current Value of Investment = 40,000,000 SR<br />
Current value of IP = Vc = 20m+0.2*(40m-50m)=20m-2m=18m<br />
ROI = Vi-I-Vc = 40m-50m-2m = -12m<br />
Table 5: Example for sharing the loss of investment partnership calculation<br />
IP owner Science Park Partner Funder<br />
Investment cost<br />
percentage<br />
0 0.2*50m= 10m 0.3*50m= 15m 0.5*50m= 25m<br />
ROI percentage of V-Vc=18m-20m= - s of ROI = 0.2*(- p of ROI = 0.3*(- q of ROI = 0.5*(parties<br />
(loss)<br />
2m<br />
12)m= -2.4m 12)m= -3.6m 12)m= -6m<br />
4. Conclusion<br />
The concept of fair partnership models has been presented, which is based on a fair calculation<br />
method for sharing the benefit/loss of the knowledge creation, as well as presenting a proper way for<br />
attracting funds through VC. The fair partnership methodology requires identifying the relevant<br />
partners, their contribution, <strong>and</strong> the formula for calculating their shares <strong>and</strong> return on investment. The<br />
VC funding in development country at Saudi Arabia has been analysed <strong>and</strong> the indications has shown<br />
a lack of trust in innovation caused by low level of innovation skills <strong>and</strong> problems in education<br />
programs <strong>and</strong> management, in addition to other obstacles associated with regulation <strong>and</strong> internal<br />
process. A new method for sharing the IP among partners <strong>and</strong> innovators has been described, which<br />
provide a fair <strong>and</strong> proper way for sharing the benefit or loss. In addition to presenting the method for<br />
sharing benefit or loss among investors <strong>and</strong> partners who support the project development toward<br />
creating products to assist the knowledge based economy. Two examples for calculating the benefit<br />
<strong>and</strong> loss for all partners in the investment partnership model has been presented, where it is clear<br />
how fair is the suggested solution in sharing the outcome of the projects. This would achieve a high<br />
level of trust among partners, <strong>and</strong> therefore make them doing their best toward achieving successful<br />
project <strong>and</strong> celebrating their achievement.<br />
References<br />
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Optimice, (2008) The Partnership Scorecard, [online],<br />
http://www.optimice.com.au/documents/ThePartnershipScorecard.pdf, Optimice.<br />
Rothwell, R. (1991) “External networking <strong>and</strong> innovation in small <strong>and</strong> medium size manufacturing firms in<br />
Europe”, Technovation, 11(2). pp. 93-112.<br />
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Saudi-chamber, (2011) [online], http://www.chamber.org.sa/English/<strong>Information</strong>Center/Pages/db.aspx.<br />
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Sophia-antipolis, (2011) [online], http://investincotedazur.com/en/projet/implantation.php.<br />
Stephen M. Dent, (2006) “Implementing a Plan for Success, Partnership Relationship <strong>Management</strong>”, [online],<br />
www.partneringintelligence.com, Partnership Continuum, Inc.<br />
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performance”, Strategic <strong>Management</strong> Journal, 26, 809-825.<br />
Wilkinson, F., Lawson, C, Keeble, D., Lawton-Smith, H. <strong>and</strong> Moore, B. (1996) “Innovative behaviour of<br />
technology-based SMEs”, joint CBR/Warwick SME Centre conference on innovation in small firms,<br />
University of Cambridge, Cambridge.<br />
249
Measuring the Effectiveness of National <strong>Knowledge</strong> Based<br />
Economy<br />
Ghassan Kbar <strong>and</strong> Abdul Aziz AlDusari<br />
Riyadh Techno Valley, King Saud University, Saudi Arabia<br />
gkbar@ksu.edu.sa<br />
gahkbar@yahoo.com<br />
adawsari@KSU.EDU.SA<br />
Abstract: Effective <strong>Knowledge</strong> <strong>Management</strong> KM is an important process for h<strong>and</strong>ling information which is<br />
essential for implementing successful projects <strong>and</strong> makes improvement to the knowledge based economy. KM<br />
deals with how knowledge is produced, shared in a secure manner, <strong>and</strong> used by organizations or individual for<br />
the benefit of the economy. In order to achieve an effective KM that contributes to the overall knowledge<br />
economy, there should be a proper way to measure it according to well known set of criteria. In this paper an<br />
analytical method has been devised based on different performance indicators to verify the availability of useful<br />
knowledge which is linked successful knowledge investment <strong>and</strong> its business continuity. Unlike other methods<br />
that focus on descriptive approach, the analytical method relies on qualitative approach that is based on how the<br />
probability of the knowledge factors can occur in a certain environment. This new method would allow managers<br />
to evaluate the performance of knowledge based economy of different nations an assist them in identifying the<br />
reason for lacking economy growth, <strong>and</strong> therefore plan for improvement.<br />
Keywords: knowledge economy, measuring effectiveness, performance indicator, assess of knowledge<br />
1. Introduction<br />
New information that is created by individual or group would become useful knowledge once is shared<br />
among other <strong>and</strong> used to improve the operation of related phenomenon. In this era, the computer<br />
technology contributes so heavily to superabundance of information which starts to become part of<br />
the solution for knowledge management KM, in a variety of domains. By the mid-1990s, knowledge<br />
management initiatives were flourishing because of the wide spread of the Internet. The International<br />
<strong>Knowledge</strong> <strong>Management</strong> Network (IKMN), begun in Europe in 1989, went online in 1994 <strong>and</strong> was<br />
soon joined by the U.S.-based <strong>Knowledge</strong> <strong>Management</strong> Forum <strong>and</strong> other KM-related groups <strong>and</strong><br />
publications. In 1994 the IKMN published the results of a knowledge management survey conducted<br />
among European firms, <strong>and</strong> the European Community began offering funding for KM-related projects<br />
through the ESPRIT program in 1995. <strong>Knowledge</strong> is not only about creation of information, but rather<br />
about developing certain pattern <strong>and</strong> distributes it efficiently to selective people. The mechanism of<br />
creation of knowledge, storing it, sharing it <strong>and</strong> dissemination <strong>and</strong> how to convey them meaningfully<br />
to some other person is called knowledge management KM.<br />
<strong>Knowledge</strong> <strong>Management</strong> relates directly to the effectiveness with which the managed knowledge<br />
enables the members of the organization to deal with today's situations <strong>and</strong> effectively envision <strong>and</strong><br />
create their future (bel97a 2004).<br />
A sound KM depends on the effective distribution of KM <strong>and</strong> not only the production of efficient KM.<br />
This can be done through secure Wireless network that has the advantages of flexibility, mobility,<br />
easy administration, reducing the information-related risk, <strong>and</strong> support of security (G. Kbar 2005).<br />
Wireless Local Area Network (WLAN) technology is rapidly becoming a crucial component of<br />
computer networks that widely used in the past few years (Jim 2002), (Rob 2001), (Signa 2001), <strong>and</strong><br />
(Nortel 2001). It provides mobility as well as essential network services where wire-line installation<br />
proved impractical. The inclusion of the newer IEEE 802.11g versions of the st<strong>and</strong>ard offers a firm<br />
basis for high performance wireless LANs. Companies <strong>and</strong> organizations are investing in wireless<br />
networks at a higher rate to take advantage of mobile, real-time access to information. However,<br />
users of wireless technology need to be aware of its performance in term of coverage, throughput,<br />
accessibility <strong>and</strong> security. The security factor is critical in wireless LAN. There are many research<br />
papers discussing how to improve the security of wireless system to an equivalent or better rate than<br />
wired LAN (Nortel 2011), (Lisa 2001), (Schwartau 2001), (Dave 2002), <strong>and</strong> (Blackwell 2002).<br />
Successful collaborative platform strategies provide value for users by improving knowledge sharing.<br />
This encourages many enterprises that have been tantalized by the promise of collaborative<br />
technologies claiming to offer everything from better innovation to streamlined workflows. However<br />
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successful sustainable collaborative platform strategies must be designed, from the ground up,<br />
around three major factors, which are usability, impact on end user, <strong>and</strong> organizational readiness.<br />
Collaborative platform success is dependent on user adoption <strong>and</strong> adoption is based on thoughtful<br />
design <strong>and</strong> forward-thinking enterprise processes (nGenera 2010). A knowledge society is an<br />
indication of the ability of society to produce <strong>and</strong> use of knowledge as well as sharing of knowledge<br />
<strong>using</strong> the proper technology (Paul 2003).<br />
A READINESS ASSESSMENT is a necessary part of 'due diligence' in any serious new initiative,<br />
most especially so in corporate business, where a failed initiative is more often than not painfully<br />
costly (Ann 2008). With respect to the company's knowledge <strong>and</strong> KM status, the KeKma-Audit (Ann<br />
2008) READINESS Analysis is designed to determine/show: the Current READINESS State, the<br />
Desired READINESS State, the READINESS Gap State (difference between current & desired state),<br />
the True READINESS State (what is perceived vs what really is), the Necessary ACTION (what needs<br />
to done to bridge gaps). The method used in KeKma-Audit can be used for determining the<br />
organization's readiness not only to implement KM, but also its readiness to be truly a knowledgebased,<br />
knowledge driven organization. However, this method focuses on the descriptive<br />
questions/answer approach to determine the gap, which can't be quantified to measure the<br />
organization performance. In this paper a new analytical method that is based on how the probability<br />
of the knowledge factors can occur in certain environment has been suggested to quantify the<br />
performance of certain organization. This new method would allow managers to evaluate the<br />
performance of knowledge based economy of different nations or organizations <strong>and</strong> assist them in<br />
identifying problems <strong>and</strong> guide them on how to plan for improvement.<br />
2. Measuring the effectiveness of <strong>Knowledge</strong> Based Economy (KBE)<br />
The World Bank invented a method for assessing the knowledge which is known as "<strong>Knowledge</strong><br />
Assessment Methodology (KAM)" (Worldbank 2011). This method includes 109 parameters which<br />
can be used to assess the core of knowledge based economy that is associated with economical<br />
incentive, education, innovation, <strong>and</strong> ICT. There is no correlation among the different parameters<br />
used in this assessment, <strong>and</strong> what would be the overall performance indicator for a particular nation.<br />
In addition, these parameters that are used for measuring the effectiveness are grouped in 8<br />
elements. These elements are economical performance, system of economy, government, innovation<br />
system, education system, workers, equal employment opportunities, <strong>and</strong> ICT. Evaluation of these<br />
parameters is subjective <strong>and</strong> is based sometime on absolute values, or relative values, To complete<br />
the assessment of a particular country, it requires to cover the 109 parameters, where many variables<br />
have to be considered. These variables include some of the indexes such as; annual GDP growth,<br />
human development index, poverty index, composite risk rating, capital formation, trade, tariff, IP,<br />
export, interest rate, rule <strong>and</strong> law, regulatory quality, political stability, control of corruption, research,<br />
publication, employment, technology, <strong>and</strong> many other parameters. To simplify the procedure, the<br />
World Bank reduces the groping to six which are <strong>Knowledge</strong> Economy Index, <strong>Knowledge</strong> Index,<br />
Economic Incentive, Innovation, Human capital, <strong>and</strong> ICT. Table 1 presents some of the result given<br />
by the KMA 2009 measurement (info.worldbank 2009).<br />
In this paper to validate the performance of <strong>Knowledge</strong> based Economy for certain nation, a<br />
quantitative <strong>Knowledge</strong> Base Economy (KBE) assessment methodology has been used to evaluate<br />
the outcome based on identified Key Performance Indicators PKI as shown in the next subsection.<br />
This new method try to simplify the measurement performance procedure based on defining a new<br />
set of groups <strong>and</strong> parameters. By looking at the topic of sustainable nation’s knowledge based<br />
economy, we can determine three main indicators which affect the KBE performance which are<br />
knowledge, investment, <strong>and</strong> Business continuity. Each of these elements group is associated with<br />
different parameters as will be explained in the subsection B. There are different PKI group that can<br />
be used to analyze the performance of the knowledge based economy. The first PKI can be used to<br />
check the probability of having the required useful knowledge, where PKI=100% means a nation<br />
would have all the required knowledge factors to build its economy. The second PKI is the ability to<br />
invest which can be measured by the different factors as explained below, where the total PKI of<br />
100% would mean a high success in the project investment. The third PKI is the ability to maintain the<br />
success of the business which can be measured by the different factors as explained below, where<br />
the total PKI of 100% would mean of having high business project success continuity. In the<br />
subsection B, the description of each performance indicators <strong>and</strong> their factors which contributes to the<br />
overall value of these indicators is included.<br />
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Table 1: KEI <strong>and</strong> KI indexes (KAM) 2009<br />
Rank<br />
1 +2 Denmark<br />
Co un try (click o n the<br />
nam e to see basic<br />
scorecard)<br />
Ghassan Kbar <strong>and</strong> Abdul Aziz AlDusari<br />
KEI<br />
KI<br />
Eco no m ic<br />
Incentiv e<br />
Re gim e<br />
Innovation<br />
Education<br />
9.5 2 9.49 9.61 9.49 9.78 9.21<br />
2 -1 Sw e den 9.51 9.57 9.33 9.76 9.29 9.66<br />
3 -1 Finl<strong>and</strong> 9.37 9.39 9.31 9.67 9.77 8.73<br />
4<br />
N eth e rla nd s 9.3 5 9.39 9.22 9.45 9.21 9.52<br />
5 +2 Norway 9.31 9.25 9.47 9.06 9.60 9.10<br />
6 +6 Canada 9.17 9.08 9.45 9.44 9.26 8.54<br />
7 +2 Unite d Kingdom 9.10 9.06 9.24 9.24 8.49 9.45<br />
8 +6 Irel<strong>and</strong> 9.05 8.98 9.26 9.08 9.14 8.71<br />
9 -3 Unite d States 9.02 9.02 9.04 9.47 8.74 8.83<br />
10 -5 Sw itze r la n d<br />
9.0 1 9.09 8.79 9.90 7.68 9.68<br />
11 -3 A u str a lia 8.97 9.08 8.66 8.88 9.69 8.67<br />
12 +3 Ge rm any 8.96 8.92 9.06 8.94 8.36 9.47<br />
13 +4 Icel<strong>and</strong> 8.95 8.76 9.54 8.07 9.41 8.80<br />
14 -3 N ew Ze al<strong>and</strong> 8.92 8.97 8.79 8.66 9.78 8.46<br />
15 -5 Austria 8.91 8.78 9.31 9.00 8.48 8.85<br />
16 -3 B e lg ium 8.80 8.77 8.87 8.93 9.14 8.25<br />
17 +2 Luxembourg 8.64 8.37 9.45 9.00 6.61 9.51<br />
18 +3 Ta iw a n, Ch in a<br />
8.4 5 8.79 7.42 9.27 7.97 9.13<br />
19 +1 Singapore 8.44 8.03 9.68 9.58 5.29 9.22<br />
20 -4 Jap an 8.42 8.63 7.81 9.22 8.67 8.00<br />
2.1 Quantitative KBE assessment methodology<br />
In order to assess the performance of a sustainable nation’s knowledge based economy, there is a<br />
need to identify the main indicators that affect the KBE performance, as well as the elements related<br />
to them <strong>and</strong> how they are correlated to each other. There three are three main keywords associated<br />
with the sustainable KBE; knowledge, investment, <strong>and</strong> Business continuity. The first main indicator<br />
associated with KBE is the required knowledge which determines the level of competency <strong>and</strong> ability<br />
to play an important role for building a strong KBE. The second main indicator is investment, which is<br />
needed for developing projects required for the success of KBE. The third main indicator is continuity<br />
of business for sustainable KBE. These three indicators (knowledge, investment <strong>and</strong> business<br />
continuity KIC) are the one that needs to be measured <strong>and</strong> evaluated in order to measure the<br />
effectiveness of the KBE. Furthermore, the elements associated with each of these indicators have to<br />
be identified, as well as the correlation that exists among them. There is direct correlation between<br />
the knowledge <strong>and</strong> investment indicators since it is unlikely that an investment can be done without<br />
the existence of knowledge. However, there is less dependency among the first 2 indicators <strong>and</strong> the<br />
business continuity indicator since it is mainly depends on entrepreneurship, technology<br />
infrastructure, management <strong>and</strong> leadership. The main indicator of successful KBE is investment<br />
indicator which directly affects the nation economy. However, in order to quantify the investment<br />
indicator value, the effect of its elements including the knowledge indicator has to be assessed. The<br />
elements affect the value of investment indicator are knowledge, fund, technology infrastructure,<br />
skills/experience, <strong>and</strong> management. The percentage or the value of these elements has to be<br />
determined, <strong>and</strong> their values need to be optimized in order to maximize the overall investment<br />
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indicator value to be close to 100%. To determine the percentage of each element is the investment<br />
indicator, we can refer to the goals that have been identified for a particular nation’s KBE, <strong>and</strong> try to<br />
link these elements to the goals by identifying the repetition of each element in the defined goals. Eg.<br />
Let’s analyze the goals of a particular science park (rtv 2011), listed below:<br />
Goals of (rtv 2011):<br />
Increase the level of interaction between KSU <strong>and</strong> Saudi knowledge-based industry, business<br />
<strong>and</strong> commerce. (requires management)<br />
Diversify the employment opportunities for graduates <strong>and</strong> post graduates. (requires knowledge,<br />
skills)<br />
Create a site that can be groomed to encourage foreign direct investment in the form of<br />
technology-based companies. (requires fund, technology infrastructure)<br />
Raise the profile of KSU as modern industry <strong>and</strong> business facing centre of learning. (requires<br />
knowledge)<br />
Create a source of independent income from KSU from its estate <strong>and</strong> from investments in<br />
technology-Based companies. (requires fund, management)<br />
Create an appropriate environment for establishing <strong>and</strong> developing a school of entrepreneurship.<br />
(requires knowledge)<br />
By looking at the above example, we can find that knowledge is repeated 3 times, management 2<br />
times, fund 2 times, skills <strong>and</strong> technology infrastructure one time. This can be related to percentage of<br />
the 5 elements, where the percentage of a particular element equal: element repetition/ total num of<br />
repetition X 100. Therefore, the knowledge or Metric <strong>Knowledge</strong> Investment (MKI) indicator would be<br />
(element repetition/ total num of repetition X 100 = 3/9X100= 30%) of the investment indicator, the<br />
fund or MKI indicator would be (2/9X100= 25%), the skills/experiences affects the MKI indicator by<br />
(1/9X100= 10%), the technology infrastructure affects the MKI indicator by (1/9X100= 10%), <strong>and</strong> the<br />
management affects the MKI indicator by (2/9X100= 25%).<br />
In order to determine the elements affecting the availability of useful knowledge indicator <strong>and</strong> their<br />
percentages, there is a need to identify how knowledge is created <strong>and</strong> how to quantify the contribution<br />
of these elements in creating a nation’s knowledge. <strong>Knowledge</strong> depends on the following elements;<br />
invention (discover new idea), additional value (innovation, quality of research), documentation, proof<br />
of new information, protection, <strong>and</strong> sharing of information. To determine the percentage of each<br />
element is the knowledge indicator, we can refer to the education system for a particular university<br />
<strong>and</strong> schools, <strong>and</strong> try to link these elements to their effect of the success of this education system by<br />
giving an equal or close value for the core, the quality, <strong>and</strong> processing of information. Therefore, the<br />
core (base knowledge, educational programs) would have a value of 35%, <strong>and</strong> 35% to quality which<br />
is divided among the additional value of 20%, <strong>and</strong> the proof of new information of 15% which is<br />
related to review process <strong>and</strong> implementation, <strong>and</strong> finally 30% for the processing of information which<br />
is divided equally (of 10%) among for the rest elements of documentation, protection <strong>and</strong> sharing of<br />
information.<br />
2.2 Key performance indicator definition <strong>and</strong> value<br />
By referring to the previous section which identifies the main indictors of KBE <strong>and</strong> theirs elements as<br />
well as the values <strong>and</strong> distribution of these elements that quantify the indicators (Availability of Useful<br />
<strong>Knowledge</strong>, Metric <strong>Knowledge</strong> Investment, <strong>and</strong> Business Project Continuity), the following sub<br />
sections explain in details the relevance <strong>and</strong> effect of these elements to the creation of the identified 3<br />
indicators. These indicators are used to measure the effectiveness of a nation’s KBE as shown in next<br />
section.<br />
2.2.1 Availability of Useful <strong>Knowledge</strong> (AUK) (maximum PKI of 100%)<br />
The following indicators can be used to evaluate the availability of useful knowledge which is a key<br />
factor for building a successful <strong>Knowledge</strong> Based Economy, where<br />
AUK=ADNI+CDV+RI+PNI+PK+ASI:<br />
ADNI Ability to Discover New Idea (maximum of 35% of the AUK's PKI) that depends on the following<br />
Items:<br />
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Having wide base knowledge 10% (base of education, level of experience of researcher or<br />
student, number of contributing to events)<br />
Having good Education system 10% (curriculum, type of delivery, experience level of instructor,<br />
qualification of Instructor)<br />
Having good Competition program 5% (university competition, national competition, world<br />
competition)<br />
Having good Reward 5% (based on achievement <strong>and</strong> outcome)<br />
Gaining experiences 5% (ability to gain experience, availability of opportunity to gain experiences)<br />
CDV Characteristic Additional Value (maximum of 20% of the AUK's PKI) that depends on the<br />
following Items:<br />
Quality of research 5% (ability to publish in conference <strong>and</strong> journals, internal evaluation of<br />
research)<br />
Ability for innovation <strong>and</strong> creativity 5% (help <strong>and</strong> fund, innovation skills, sharing events <strong>and</strong> learn<br />
about innovation)<br />
Evaluated by high st<strong>and</strong>ard organization 5% (evaluated by partners, evaluated by professional<br />
people, evaluated by marketing <strong>and</strong> investment professionals)<br />
Sharing <strong>and</strong> partnership 5% (existing of partner with companies, existing of joint research)<br />
RI Registering of <strong>Information</strong> (maximum of 10% of the AUK's PKI) that depends on the following<br />
Items:<br />
Existing of technology 3% (existing of technology hardware, software program for aided design<br />
<strong>and</strong> documentation)<br />
Willing for documentation 3%<br />
Ability to retrieve information 4% (easy to access information <strong>and</strong> publication)<br />
PNI Prove of New <strong>Information</strong> (maximum of 15% of the AUK's PKI) that depends on the following<br />
Items:<br />
Review of work 3% (reviewed by professional people, peer review)<br />
Ability to Implement a proof of concept 3% (design, pseudo code, algorithm)<br />
Ability to simulate 3% (simulation software)<br />
Ability to implement solution 5-6% (partial implementation, prototype, functional prototype,<br />
advance prototype)<br />
Existing of necessary facilities 3% (equipment, lab, software)<br />
PK Protecting of <strong>Knowledge</strong> (maximum of 10% of the AUK's PKI) that depends on the following<br />
Items:<br />
Having IP system 5%<br />
Sharing of profit 5% (partial, limited)<br />
ASI Absolute of Sharing of <strong>Information</strong> (maximum of 10% of the AUK's PKI) that depends on the<br />
following Items:<br />
Willing to share information 2%<br />
Workshop, conference <strong>and</strong> journal publication 4%<br />
Seminar <strong>and</strong> lecture presentation 2%<br />
Discussion & Brain storm 2%<br />
2.2.2 Metrics of knowledge Investment (MKI) (maximum PKI of 100%)<br />
The following indicators can be used to evaluate the possibility of successful knowledge investment,<br />
where MKI=AUK+APF+EI+ARS+GMT:<br />
AUK Availability of Useful <strong>Knowledge</strong> (maximum of 30% of the MKI's PKI) which can be measured as<br />
explained before.<br />
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APF Ability to provide Fund (maximum of 25% of the MKI's PKI) that depends on the following Items:<br />
Existing of fund 10% (organization support, government support, Angel fund<br />
Strategy for partnership 8% (venture capital: trust in research outcome, trust in team work, trust in<br />
project management, trust in organizational management, other party support, government legist<br />
elation, investment skills, ip ownership)<br />
Variety of funds 2%<br />
Mechanism of acquiring fund 5% (preparation, strategy, communication)<br />
EI Existing Infrastructure (maximum of 10% of the MKI's PKI) that depends on the following Items:<br />
Services <strong>and</strong> facility 3%<br />
Equipments 5%<br />
Consultation <strong>and</strong> support 2%<br />
ARS Availability of Required Skills (maximum of 10% of the MKI's PKI) that depends on the following<br />
Items:<br />
Local skills 3%<br />
Attract new skills 4% (ability to attract, involve imported skilled people in management)<br />
Legistelation 3%<br />
GMT Good <strong>Management</strong> Team (maximum of 25% of the MKI's PKI) that depends on the following<br />
Items:<br />
Experienced staff 10% (limited experience, academic experience, relevant experience,<br />
entrepreneurship skill)<br />
Ability to learn <strong>and</strong> training 3%<br />
Sharing experience 2%<br />
Right person for right position 10% (accepting position for non local, advertise position, appoint<br />
through friendship, not checking qualification)<br />
2.2.3 Business Project Continuity (BPC) (maximum PKI of 100%)<br />
The following indicators can be used to evaluate the possibility of maintaining the continuity <strong>and</strong><br />
successful business project, where BPC= EA+DTI+MLP:<br />
EA Entrepreneurship Ability (maximum of 30% of the BPC's PKI) that depends on the following Items:<br />
Entrepreneurship skills 15% (courage, wise, making right decision)<br />
Communication skills 8% (ability to market ideas)<br />
Exposing to other practices 7 % (sharing of events, good listener, reading related article <strong>and</strong><br />
news)<br />
DTI Developing the Technology Infrastructure (maximum of 20% of the BPC's PKI) that depends on<br />
the following Items:<br />
Updated Technology 8%<br />
Continuous Access <strong>and</strong> Business Continuity Plan 12%<br />
MLP <strong>Management</strong> & Leadership Performance maximum of 50% of the BPC's PKI) that depends on<br />
the following Items:<br />
<strong>Management</strong> skills <strong>and</strong> qualification 15%<br />
Having right staff with right expertise 8%<br />
Execution according to plan 12%<br />
Monitoring <strong>and</strong> apply right appraisal 10%<br />
Training <strong>and</strong> education 5%<br />
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3. Comparing the knowledge based economy performance between<br />
developed <strong>and</strong> development countries<br />
Based on the study that has been conducted at Riyadh Techno Valley, <strong>and</strong> the experiences of people<br />
in developed <strong>and</strong> development countries, Table 2 presents a comparison between developed <strong>and</strong><br />
development countries. This comparison highlights the average performance key indicators in order to<br />
measure the availability of useful knowledge AUK. It is clear from this table that AUK in development<br />
countries is nearly one third less than developed countries. This indicates that development countries<br />
suffer from building a proper knowledge based economy. These problems are associated with their<br />
average education system, low research capability, improper review process, <strong>and</strong> average Intellectual<br />
Properties outcomes.<br />
In Table 3, a comparison between developed <strong>and</strong> development countries based on the average<br />
metric of knowledge investment MKI performance indicator is presented. It is clear that low AUK as<br />
well as problems in providing enough variety funding for technological projects, low technical profiles,<br />
<strong>and</strong> poor management experiences in development countries would give a average indicator for<br />
investment in the knowledge based projects.<br />
Table 2: Average performance key indicators for the Availability of Useful <strong>Knowledge</strong> (AUK) at<br />
developed vs development countries (maximum PKI of 100%)<br />
Ability to Discover<br />
New Idea<br />
ADNI (max 35%)<br />
Characteristic<br />
Additional Value<br />
CDV (max 20%)<br />
Registering of<br />
<strong>Information</strong><br />
Type of PKI Developed Countries Development Countries<br />
Base knowledge 10% 10 6<br />
Education system 10% 8 6<br />
Competition program 5% 4 2<br />
Reward 5% 4 2<br />
Experiences 5% 5 3<br />
Research quality 5% 5 2<br />
Creativity 5% 4 1<br />
High st<strong>and</strong>ard 5% 4 2<br />
Sharing, partnership 5% 4 2<br />
Existing technology 3% 3 3<br />
Documentation 3% 3 1<br />
RI (max 10%) Retrieve information 4% 4 3<br />
Prove of New<br />
<strong>Information</strong><br />
PNI (max 20%)<br />
Protecting of<br />
<strong>Knowledge</strong><br />
PK (max 10%)<br />
Absolute of<br />
sharing<br />
<strong>Information</strong><br />
Review process 3% 3 1<br />
Proof of concept 3% 3 3<br />
Simulation 4% 4 1<br />
Implement solution 7% 6 2<br />
Necessary facilities 3% 3 1<br />
Intellectual Properties 5% 5 3<br />
Sharing profit 5% 4 5<br />
Share information 2% 2 2<br />
<strong>Knowledge</strong> Events 4% 3 3<br />
Presentation 2% 2 1<br />
ASI (max 10%) Brain storm 2% 2 1<br />
Total 91 56<br />
4. Conclusion<br />
The concept of knowledge management has been presented, where it shows the importance of<br />
effective knowledge sharing <strong>using</strong> latest technologies <strong>and</strong> successful collaborative platform<br />
strategies. In addition to determining the organization's readiness not only to implement KM, but also<br />
its readiness to be truly a knowledge-based, knowledge driven organization. Unlike the descriptive<br />
approach used checking the organization's readiness to identify the gap <strong>and</strong> try to fill in this gap, a<br />
better method <strong>using</strong> analytical approach has been suggested in this paper. Where, a new method for<br />
measuring the effectiveness of national based economy has been presented, <strong>and</strong> is based on<br />
analytical approach. It uses different performance indicators that are associated with the availability of<br />
knowledge, the knowledge investment <strong>and</strong> business project continuity. A comparison between<br />
developed <strong>and</strong> development countries have shown average performance indicators in the<br />
development countries which is due to problems in their education system, average research<br />
capabilities <strong>and</strong> Intellectual Properties, low projects funding <strong>and</strong> lack of management experiences.<br />
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Ghassan Kbar <strong>and</strong> Abdul Aziz AlDusari<br />
Table 3: Average performance key indicators for the Metric <strong>Knowledge</strong> Investment MKI at developed<br />
vs development countries (maximum MKI of 100%)<br />
AUK Availability<br />
of Useful<br />
<strong>Knowledge</strong><br />
(max 30%)<br />
APF Ability to<br />
provide Fund<br />
(max 25%)<br />
Type of MKI Developed<br />
Countries<br />
Development Countries<br />
91*0.3=27.3 56*0.3=16.8<br />
Existing of fund 10% 9 7<br />
Partnership Strategy 8% 8 4<br />
Variety of funds 2% 2 0.4<br />
Mechanism of acquiring fund 5% 5 2<br />
EI Existing<br />
Services <strong>and</strong> facility 3% 3 2<br />
Infrastructure<br />
Equipments 5% 4 4<br />
(max 10%) Consultation <strong>and</strong> support 2% 2 1<br />
ARS Availability<br />
Local skills 3% 3 1<br />
of Required Skills Attract new skills 4% 3 2<br />
(max 10%) legist elation 3% 3 1.3<br />
GMT Good<br />
<strong>Management</strong><br />
Team<br />
Experienced staff 10% 9 5<br />
Ability to learn <strong>and</strong> training 3% 3 2<br />
Sharing experience 2% 2 1<br />
(max 25%) Right person for right position 10% 9 6<br />
Total 92.3 55.5<br />
References<br />
Bellinger, G bel97a, (2004) <strong>Knowledge</strong> <strong>Management</strong>—Emerging Perspectives, [online], http://www.systemsthinking.org/kmgmt/kmgmt.htm,.<br />
Blackwell (2002), Assessing WLAN Security Threats, [online],<br />
http://www.80211planet.com/tutorials/article/0,4000,10724_953481,00.html,<br />
David Paul A. & Foray Dominique (2003), Economic Fundamentals of the knowledge Society Policy Futures in<br />
Education, Volume 1.<br />
Geier Jim, (2002), Assigning 802.11b Access Point Channels, [online],<br />
http://www.80211planet.com/tutorials/article/0,4000,10724_972261,00.html<br />
Hylton Ann, (2008) A Readiness Assessment is Essential in a KM <strong>and</strong> <strong>Knowledge</strong> AUDIT Initiative, [online],<br />
http://KeKma-audit.com , <strong>Knowledge</strong> Auditor.<br />
Info.Worldbank, (2009), http://info.worldbank.org/etools/kam2/KAM_page5.asp.<br />
Kbar G., Ubeida W.S (2005) Wireless Network as solution for efficient distribution of <strong>Knowledge</strong> <strong>Management</strong>.<br />
ICICKM 2nd International Conference on Intellectual Capital <strong>Knowledge</strong> <strong>Management</strong> <strong>and</strong> Organizational<br />
Learning, AUD-Dubai.<br />
Molta Dave, (2002), WLAN Security on the Rise [online],<br />
http://www.networkcomputing.com/1303/1303ws2.html.<br />
nGenera Insight (2010), Enabling Collaborative Platform Adoption, [online], http://www.moxiesoft.com.<br />
Nortel, (2001), IEEE 802.11 St<strong>and</strong>ard For Wireless LANs, [online],,<br />
http://www.nortelnetworks.com/solutions/financial/collateral/mar00_wireless.pdf.<br />
Phife Lisa (2001), Wireless Privacy: An Oxymoron, [online],<br />
http://www.80211planet.com/columns/article/0,4000,1781_786641,00.html.<br />
Rtv, (2011), http://www.rtv.com.sa,<br />
Schenk Rob, (2001), Wireless LAN Deployment <strong>and</strong> Security basics network, [online],<br />
http://www.extremetech.com/article/0,3396,s%253D1034%2526a%253D13521,00.asp.<br />
Signa Services (2001), Best Practices for Deploying Wireless LANs, [online], Planet,<br />
http://www.80211planet.com/tutorials/print/0,,10724_985421,00.html.<br />
Schwartau, (2001), How to Break Into a Network with Only Three Keystrokes, [online],<br />
http://searchwebservices.techtarget.com/originalContent/0,289142,sid26_gci770991,00.html.<br />
Worldbank, (2011), http://www.worldbank.org/kam,<br />
257
Empirical Study on IT Productivity in eGovernment in<br />
Korea<br />
Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
National <strong>Information</strong> Society Agency, Seoul, Korea<br />
kimdh@nia.or.kr<br />
hyunjoo@nia.or.kr<br />
Abstract: Korean government ministries are asked to carry out their works <strong>and</strong> to operate internal organization<br />
along the principle of economic efficiency. We develop <strong>and</strong> apply IT systems in order to make work processes<br />
more efficient <strong>and</strong> more effective. Certainly they have done their jobs, but still must be subjected to an economic<br />
efficiency assessment. But it is not easy to assess IT systems in non-profit organizations with economic<br />
measurement for the reason why they have various <strong>and</strong> different stakeholders <strong>and</strong> their services are frequently<br />
intangible. Many scholars <strong>and</strong> researchers take interests in assessing IT systems in non-profit organizations as<br />
well. The purpose of this paper is to offer the real calculation which provides an overall statement concerning the<br />
economic efficiency of the IT system in public sector in Korea. It also provides some factors to be considered<br />
when not only assessing IT systems in non-profit organizations but also presenting a methodological frame for IT<br />
evaluation <strong>and</strong> the government ministries.<br />
Keywords: ICT, productivity, intellectual property, non-profit organization, assessment<br />
1. Introduction<br />
Korean Intellectual Property Office (KIPO) is the major governmental authority in charge of intellectual<br />
property matters in Korea. KIPO offers information on patent applications <strong>and</strong> provides an accurate<br />
examination/trial service to satisfy global st<strong>and</strong>ards. The mission of KIPO is to help Korea become an<br />
advanced country, by providing legal <strong>and</strong> institutional administration with regard to the creation <strong>and</strong><br />
utilization of highly creative, value-added intellectual property <strong>and</strong> by promoting technological<br />
innovation <strong>and</strong> industrial development(see http://www.kipo.go.kr/).<br />
eGovernment refers to the delivery of government services <strong>and</strong> production improvement through IT<br />
applications ([Chen], [Sprecher]). eGovernment services include eGovernment initiatives to create<br />
efficiencies at both inter- <strong>and</strong> intra- governmental agency levels ([Lee]). As one of eGovernment<br />
initiatives KIPO set out to automate its workforce several years ago, computerizing all administrative<br />
procedures for their knowledge workers. Now a days KIPO wanted to know whether if this strategy<br />
has resulted in increased employee productivity throughout the organization or not. And also it wanted<br />
to underst<strong>and</strong> the business value of such strategy to itself.<br />
Recently there have been many attempts to underst<strong>and</strong> <strong>and</strong> measure the returns from information<br />
technology investment in public sector([Braaksma et al], [Danayan], [Castelnovo et al]). The purpose<br />
of this paper is to offer the real calculation which provides an overall statement concerning the<br />
employee productivity of the KIPO IT system. It also provides some factors to be considered when not<br />
only assessing IT systems in non-profit organizations but also presenting a methodological frame for<br />
IT evaluation <strong>and</strong> the government ministries.<br />
2. Study methodology<br />
To underst<strong>and</strong> <strong>and</strong> explore the impact of IT system on employee productivity during the two-month<br />
evaluation period, we used couple of data collection techniques:<br />
Surveys to collect satisfaction data<br />
Employees interviews<br />
System-generated data<br />
Sample surveys <strong>and</strong> controlled experiment are the primary data collection techniques ([Guba],<br />
[Orlikowski]). Hence we surveyed some employees who had experienced old ways without IT systems<br />
to collect satisfaction data of IT systems. Due to KIPO's help, surveys were easy to administer <strong>and</strong><br />
could be collected efficiently from sample emloyees. But since surveys can be impacted by a<br />
participant's willingness to respond <strong>and</strong> other user reporting biases, we also collected other<br />
information.<br />
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Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
We interviewed some employees to gather open-ended responses, to allow for follow-up questions,<br />
<strong>and</strong> to uncover unanticipated information. We also asked them to keep activity logs capturing how<br />
often <strong>and</strong> for how long activities were performed, defining a core set of activities with clear start <strong>and</strong><br />
stop points. Then we reviewed system-generated data to figure out the productivity of the employees<br />
who were performing certain activities with IT.<br />
This paper was designed to quantitatively underst<strong>and</strong> the impact to productivity <strong>and</strong> to develop a<br />
deeper underst<strong>and</strong>ing of the qualitative findings with knowledge workers in the office. We defined<br />
employee productivity as organization's average quantity of output produced by one employee<br />
([Barton]). We consider a catalogue of criteria containing the quality criteria which are related to<br />
quality improvements within the public agency, <strong>and</strong> to the effect on the staff of the public<br />
administration:<br />
Improved job performance<br />
Acceleration of work procedures <strong>and</strong> processes<br />
St<strong>and</strong>ardised <strong>and</strong> uniform administrative work<br />
Public image improvement<br />
Attractiveness of working conditions<br />
3. Korea Intellectual Property Office <strong>and</strong> information system overview<br />
(http://www.kipo.go.kr)<br />
3.1 Korea Intellectual Property Office<br />
After a patent application is filed with the KIPO, a patent right is granted through various steps. The<br />
Korean system is characterized by (ⅰ) First-to-File Rule; (ⅱ) Publication of Unexamined Application; (ⅱi)<br />
Request for Examination. Either the inventor of an invention or his assignee can file a patent<br />
application for the invention with KIPO. The applicant may be either a natural person or a juristic<br />
person.<br />
When a patent application is submitted to KIPO, it is checked to ensure that all requirements<br />
necessary to accord the application a filing date have been satisfied. Applications that have not yet<br />
been published will be automatically laid-open in the official gazette called "Patent Laid-open Gazette"<br />
after 18 months from the filing date in the Republic of Korea or, if the right of priority is claimed from<br />
an earlier foreign filing, from the priority date.<br />
A patent application will be taken up for examination only if a request for examination is made either<br />
by the applicant or by any interested party within 5 years from the filing date of the application. If the<br />
examiner finds a ground for rejection of a patent application, a notice of preliminary rejection will be<br />
issued; <strong>and</strong> the applicant will be given an opportunity to submit a response to the preliminary rejection<br />
within a time limit designated by the examiner. Such time limit is extendable upon the request for an<br />
extension by the applicant.<br />
When a patent applicant receives a notice of decision to grant a patent he should pay, as a<br />
registration fee, the first 3 years' annuities within 3 months from the date of receipt of such notice.<br />
Where the examiners finds no grounds for refusal of a patent application, KIPO publishes the patent<br />
registration after the patent applicant pays the registration fee. Once a patent has been published in<br />
the Patent Registration Gazette, any person may file an opposition against the registration of a patent<br />
between the date on which the patent is registered <strong>and</strong> the date that marks a lapse of three months<br />
since the publication date.<br />
Figure 1: Procedures for granting a patent<br />
259
3.2 <strong>Information</strong> system overview<br />
Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
KIPOnet is an office automation system that enables complete electronic management of IPR affairs.<br />
It provides applicants with a breadth of electronic services such as on-line filing <strong>and</strong> patent<br />
information searches. All their administrative procedures are computerized. When an application is<br />
received via the Internet or on paper, KIPO h<strong>and</strong>le everything electronically including filing, prior art<br />
searches, examination, registration, <strong>and</strong> publishing.<br />
As of 2007, the KIPOnet system comprises 39 subsystems while integrating redundant legacy<br />
systems. For example, the Electronic Application Preparation System (KEAPS), the General<br />
Receiving System, the Formality Check System, the Search System, the Trial Administration System,<br />
<strong>and</strong> the Gazette Publication System. In February 2005, KIPO integrated networks, which were<br />
physically divided, into an internal network for IPR administration <strong>and</strong> an external network for public<br />
access, providing access to internal <strong>and</strong> external sites simultaneously. The introduction of the<br />
Enterprise Security <strong>Management</strong> System <strong>and</strong> the Security Patrol Center enabled KIPOnet to operate<br />
around the clock, even in an emergency.<br />
The receipt, or if needed rejection, of an Internet-based application is immediately sent to the<br />
applicant or transmitted to a formality examiner of KIPO after it is received via the internal server in<br />
real time through the SSL channel. Applications passing a formality examination are loaded into an<br />
integrated database as an XML-based electronic dossier, which enable examiners to judge its<br />
patentability. After the examination, the application data is utilized for registration <strong>and</strong> publication. The<br />
Internet gazettes have been offered in PDF-format at the web site (http://www.kipo.go.kr) since July<br />
2001.<br />
Figure 2: Concept of the KIPOnet system<br />
4. Measuring IT productivity in KIPO<br />
In 2001, the McKinsey Global Institute found that IT had diverse <strong>and</strong> complex impact depending on<br />
when, where, <strong>and</strong> how it was deployed [Kellison]. Therefore we seek to answer the question, "how did<br />
IT drive productivity growth in the KIPO in the 2000s?" This report focuses on the relationship<br />
between IT <strong>and</strong> productivity in two parts: a process management part for the administration <strong>and</strong> a<br />
data management part for the effective data search <strong>and</strong> examination. We conducted this study by first<br />
outlining the business process <strong>and</strong> evaluating the impact of IT applications. We define IT productivity<br />
of each business process as the ratio of the number of units produced <strong>and</strong> the number of employees<br />
when they do their works with IT.<br />
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Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
As a result, by digitizing the entire patent administration process, including the application,<br />
examination, registration, <strong>and</strong> trial of patents, KIPOnet has faithfully supported the renovation of<br />
patent administration <strong>and</strong> its internal work process. In fact, since IT was deployed in the business<br />
processes, IT has increased the average productivity by 5.6% in e-filing process <strong>and</strong> 16.5% in<br />
registration process.<br />
This is because that IT system enables filing online applications, automatic retrieval of a variety of<br />
notifications <strong>and</strong> filing records, <strong>and</strong> providing convenient services involving notifications <strong>and</strong> issuance<br />
of certificates. KIPO also introduced the work-at-home system for examiners. While examination<br />
circumstances vary, some examiners only have to commute to work one day a week.<br />
Table 1: IT productivity in e-filing process<br />
before<br />
IT(avg)<br />
‘99 '00 ‘01 '02 ‘03 '04 ‘05 ‘06<br />
number of applications<br />
(thous<strong>and</strong>)<br />
185 231 283 289 290 306 327 359 367<br />
number of employees 34 47 42 42 42 42 42 42 42<br />
rate of IT productivity compared<br />
with before IT<br />
1.00 0.90 1.24 1.2 1.27 1.34 1.43 1.5 1.61<br />
Table 2: IT productivity in registration process<br />
number of registrations<br />
(thous<strong>and</strong>)<br />
number of<br />
employees<br />
rate of IT productivity<br />
compared with before<br />
IT<br />
before<br />
IT(avg)<br />
‘99 '00 ‘01 '02 ‘03 '04 ‘05 ‘06<br />
73 148 126 130 153 155 165 198 250<br />
26 26 26 26 26 26 26 26 26<br />
1.00 2.00 1.71 1.77 2.07 2.11 2.24 2.68 3.39<br />
The number of applications increased rapidly every year so that examiners have had burdensome<br />
duties to examine. To disburden workload, KIPO increased the workforce <strong>and</strong> boosted the<br />
outsourcing of prior art searches. The number of examiners exp<strong>and</strong>ed from 400 in 1999 to 728 in<br />
2005, while the portion of outsourced prior art searches rose from 13% in 2000 to 50% in 2005.<br />
Despite the skyrocketing of patent applications, KIPO reduced the average examination period, which<br />
is the time for a first action on patent applications from over 28.1 months in 1998 to 9.8 months in<br />
2006. As a result, KIPOnet has doubled the employee productivity in examination process. IT system<br />
improved productivity by speeding up examination processes. More up-to-date <strong>and</strong> more precise<br />
forms of communication reduced transport time, dead time, <strong>and</strong> preparation time. But the productivity<br />
remained almost same through recent years except 2006, in which KIPO encouraged examiners to do<br />
their jobs <strong>and</strong> to reduce the examination period.<br />
Table 3: IT productivity in examination process<br />
number of units examined<br />
(thous<strong>and</strong>)<br />
‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06<br />
796 711 610 828 991 1,140 1,518, 2,244<br />
number of examiners 402 380 382 453 513 558 728 727<br />
rate of IT productivity<br />
compared with before IT<br />
2.0 1.9 1.6 1.8 1.9 2.1 2.1 3.1<br />
To have a high quality result concerning productivity, other criteria <strong>and</strong> multi-dimensional approach<br />
should be required. That is, we have to consider some parameters beyond parameters can be<br />
quantified because IT systems can have different effects in different circumstances. In the case of<br />
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Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
KIPO, qualitative <strong>and</strong> strategic parameters would be more important than parameter in monetary<br />
terms since KIPO is a non-profit organization. We surveyed <strong>and</strong> evaluated KIPOnet in 4 qualitative<br />
terms: the quality of work process, acceleration of work processes, st<strong>and</strong>ard <strong>and</strong> uniform work flow,<br />
satisfaction.<br />
3,500<br />
3,000<br />
2,500<br />
2,000<br />
1,500<br />
1,000<br />
500<br />
0<br />
no. of units<br />
no. of examiners<br />
productivity<br />
‘93 ‘94 ‘95 ‘96 ‘97 98 ‘99 '00 '02 ‘03 '04 ‘05 ‘06<br />
Figure 3: IT productivity in examination process<br />
(months)<br />
40<br />
30<br />
20<br />
10<br />
0<br />
97 98 99 00 01 02 03 04 05 06<br />
patents 35.5 28.1 23.6 20.6 21.3 22.6 22.1 21 17.6 9.8<br />
trademarks 17.4 12.5 9.7 9.8 12.2 11.9 10.7 9.6 7.3 5.9<br />
Design 9.6 7.3 7.2 7.1 9.6 8.4 7.3 6.8 6.7 5.9<br />
Figure 4: The examination period (unit : months)<br />
We evaluated the qualitative effects related to work, i.e. whether the quality of the work process as<br />
such <strong>and</strong> hence also of the product is improved. We assessed the qualitative improvements of<br />
transparency of administrative work, simplified internal workflows, as well as elimination of redundant<br />
<strong>and</strong> routine operations. When evaluating this criterion, the effects should be differentiated in terms of<br />
formal improvement (the workflow improves itself) <strong>and</strong> material improvement (the result of the<br />
workflow is improved) As a result, KIPO showed significant improvement of the formal work<br />
process(7.1 point out of 10) <strong>and</strong> some improvement of the result of the workflow. KIPO established<br />
the intelligent search <strong>and</strong> examination system, KIPO published examination guidelines <strong>and</strong> began<br />
evaluating examinations. It introduced an examination quality index to help manage examinations.<br />
From a score of 100 points in 1999, the index rose to 125 points in 2005. Furthermore, to increase the<br />
fairness of examinations, KIPO started <strong>using</strong> examination notes in 2005 as a means of recording <strong>and</strong><br />
publishing the major decisions of examiners.<br />
Table 4: Examination quality index<br />
Year 2000 2001 2002 2003 2004 2005 2006<br />
Quality index 100 106.4 112.3 116.2 122.1 125.3 128.7<br />
262
Dong-Hyun Kim <strong>and</strong> Hyun-Joo Kim<br />
We measured the improvement by speeding up work procedures <strong>and</strong> processes. Acceleration of work<br />
procedures <strong>and</strong> processes enables faster performance (reducing cycle time). The effects are due to<br />
electronic communications, elimination of media inconsistency, access to up-to-date databases by all<br />
authorised users, <strong>and</strong> even by elimination of individual working positions The assessment of the<br />
qualitative criterion is the result of a critical evaluation of the improvements which the IT measure will<br />
offer to users in the organization unit concerned.- Acceleration: whether cycle time is reduced by<br />
reducing traveling time <strong>and</strong> preparation. As a result, KIPO showed significant improvement of the<br />
acceleration of work processes as present cycle time had been reduced by up to 30%.<br />
We evaluated st<strong>and</strong>ard <strong>and</strong> uniform work flow: the extent to which IT system would replace old work<br />
flow with st<strong>and</strong>ardized <strong>and</strong> uniform one. This can be due to up-to-date access to data with uniform<br />
structures <strong>and</strong> due the harmonisation of administrative procedures on both organizational <strong>and</strong> IT<br />
level. There was significant improvement thanks to st<strong>and</strong>ardization of data structures <strong>and</strong> process<br />
routines within KIPO(6.9 point out of 10).<br />
5. Conclusion<br />
The most remarkable benefit of KIPOnet has been the shift in their work process; namely, from a<br />
paper-based paradigm to an electronic paradigm. With a state-of-the-art IT infrastructure, KIPO has<br />
become more IT-oriented. Indeed, IT accelerated the KIPO productivity revolution, pushing annual<br />
labor productivity growth higher. For internal efficiency, KIPO enhanced efficiency <strong>and</strong> transparency<br />
of the intellectual property administration with computerized searches <strong>and</strong> renovated business<br />
processes. e-Filing <strong>and</strong> registration processes of patents are administrative processes which are<br />
good collaborated with IT. Both processes deal with a set of meta information like patent's applicant's<br />
information <strong>and</strong> thus IT systems can easily check whether if the applicants fill basic information in the<br />
application or registration forms. In fact, employee productivity in both processes increases even<br />
though the number of applications are increased high <strong>and</strong> the number of staffs has been never<br />
increased.<br />
On the other h<strong>and</strong>s, employee productivity in substantial examination was doubled when the IT<br />
system introduced first but it has not been increased any more <strong>and</strong> stayed even. Substantial<br />
examination is complicated <strong>and</strong> nuanced jobs requiring experience, expertise, judgement, interaction<br />
<strong>and</strong> collaboration. Increasing productivity for these employees, whose jobs can't be automated, has<br />
thus far proven to be a major challenge for software developers around world.<br />
References<br />
Baily, Martin Neil <strong>and</strong> Eric Zitzewitz (2001) “Service Sector Productivity Comparisons: Lessons for<br />
Measurement,” in Charles R. Hulten, Edwin R. Dean, <strong>and</strong> Michael J. Harper, editors New Developments in<br />
Productivity Analysis pp. 419-456<br />
Barton, Neil. (2006) "Benchmarking, Outsourcing, <strong>and</strong> Evaluation in the IT Industry: or "Commoditization is in the<br />
eye of the Stakeholder"", Proceedings of the 13th European Conference on IT Evaluation, pp1-13<br />
Braaksma, Jan & Comm<strong>and</strong>eua, Arnold & Berghout, Egon (2007) “The Business case for ICT investment<br />
evaluation in nonprofit organizations”, Proceedings of the 13th European Conference on IT Evaluation,<br />
pp91-102<br />
Castelnovo, Marian & Simonetta, Massimo (2007) “The Evaluation of eGovernment projects for SLGOs”,<br />
Proceedings of the 13th European Conference on IT Evaluation, pp130-139<br />
Chen, Y.N., H M Chen, W Huang <strong>and</strong> R K H Ching. (2006) "EGovernment Strategies in Developed <strong>and</strong><br />
Developing Countries: An Implementation Framework <strong>and</strong> Case study", Journal of Global <strong>Information</strong><br />
<strong>Management</strong>, Vol 14, No 1, pp23-46.<br />
Danayan, Lucy (2007) “Measuring return on government IT investment”, Proceedings of the 13th European<br />
Conference on IT Evaluation, pp175-185<br />
Guba, E. G. & Lincoln, Y. S. (1989) Fourth Generation Evaluation, SAGE Publications, Inc, Newbury Park.<br />
Kellison,. Matt (2001) “The McKinsey Global Institute Productivity Studies: Lessons for Canada”, Mckinsey Global<br />
Institute, CSLS Research Report 2004-10, November, 2004<br />
Lee, S.M., Tan, X., <strong>and</strong> Trimi, S. (2005) "Current Practices Of Leading EGovernment Countries",<br />
Communications Of The ACM, Vol. 48, No 10, pp99-104.<br />
Lewis, William W. (2004) The Power of Productivity: Wealth, Poverty, <strong>and</strong> the Threat to Global Stability (Chicago:<br />
University of Chicago Press).<br />
Orlikowski, W. & Baroudi, J. (1991) "Studying information technology in organizations: research approaches <strong>and</strong><br />
assumptions", <strong>Information</strong> Systems Research, Vol. 2, No., pp1-28.<br />
Sprecher. M. (2000) "Racing to EGovernment: Using the internet for citizen service Delivery", Government<br />
Finance Review, Vol 16, pp21-22.<br />
263
Impact of Inter Organizational Networks on Adoption<br />
Process of <strong>Information</strong> Technology<br />
Erdem Kirkbesoglu <strong>and</strong> Gizem Ogutcu<br />
Baskent University, Ankara, Turkey<br />
erdemk@baskent.edu.tr<br />
ogutcu@baskent.edu.tr<br />
Abstract: The purpose of this study is to generate a conceptual framework that reveals the impact of interorganizational<br />
networks on the adoption process of information technologies. A great majority of the previous<br />
research that focuses on the adoption process of information technologies are empirical studies based on interorganizational<br />
factors (for instance; the structure, the strategy or culture of the organization). These are the<br />
studies which maximize organizational benefit (performance based) <strong>and</strong> which give suggestions to the<br />
practitioners towards increasing efficiency. Unlike these, in this study, the macro factors (for example strong <strong>and</strong><br />
weak ties, level of dependency, level of isomorphism among organizations) emerging as a result of the interorganizational<br />
interactions were considered instead of intra-organizational factors. Due to the fact that the most<br />
significant field of application for information technologies is the organization, a conceptual assessment was<br />
made in this study from the aspect of organizational communities <strong>and</strong> organization theories. In developing this<br />
model, basic statements of various organization theories such as network theory, institutional theory <strong>and</strong><br />
dependency theory were used. At the end of the study, a number of propositions related to inter organizational<br />
interaction that affect adoption <strong>and</strong> sustained use of innovative technologies in a network context are composed<br />
for future studies.<br />
Keywords: information technology adoption, network theory, dependency, isomorphism<br />
1. Introduction<br />
The roles of information technology (IT) on today’s organizations have significantly changed over the<br />
last decade. Advances in new information technology <strong>and</strong> changes in the global environment have<br />
made it increasingly difficult for organizations to make decisions regarding information technology<br />
adoption. Moreover, information systems in a global environment are influenced by different cultures,<br />
laws, information technology infrastructure, <strong>and</strong> the availability <strong>and</strong> role of skilled personnel<br />
(Dasgupta et al., 1999). IT has become the tool used to manage change in business strategies <strong>and</strong><br />
internal corporate processes by many organizations. Organizations are making significant<br />
investments in information technology to align business strategies, enable innovative functional<br />
operations <strong>and</strong> provide extended organizational networks. These organizations have adopted<br />
information technology to foster changes in managing customer relationships, manufacturing,<br />
procurement, the supply chain <strong>and</strong> all other key activities <strong>and</strong> to enhance their competitive capabilities<br />
(Chen <strong>and</strong> Tsou, 2007).<br />
Thus, IT now is one of the major factors improving productivity <strong>and</strong> performance of the organizations.<br />
It is a tool used to manage business strategies <strong>and</strong> internal corporate processes <strong>and</strong> it is a nervous<br />
system of organizations that determines the organization’s competitiveness. So it can create the<br />
competitive advantage <strong>and</strong> innovation for every business. However, <strong>Information</strong> Technology itself<br />
cannot create the value-added to the organization. It can only make the better products <strong>and</strong> services<br />
via changing the working processes. Moreover, every organization can acquire the same technology<br />
<strong>and</strong> also it is easy to be copied in a short period of time. To sustain the competitive advantages,<br />
managers should focuses on contextual factors on the process of IT adoption. It is clear that even<br />
though IT has evolved from its traditional to more strategic role within an organization, the adoption<br />
process of any new technology can be problematic for many organizations. Several factors appear to<br />
accelerate or impede the diffusion of IT in all organizations.<br />
Identifying why <strong>and</strong> how organizations adopt information technology is crucial for providing a<br />
successful adoption process. Several studies have identified different variables that can explain why<br />
firms adopt information technology with different intensities <strong>and</strong> speeds (e.g., Teo <strong>and</strong> Pian, 2003;<br />
Premkumar et al., 1997). A great majority of these studies are composed of the empirical studies<br />
based on intra-organizational factors <strong>and</strong> variables. However, adoption <strong>and</strong> expansion of information<br />
technologies are maintained through the inter-organizational relationships. Both structural properties<br />
of the organizations <strong>and</strong> their interactions with their environment are important. Therefore, in addition<br />
to the micro factors based on the structures of organizations, it is necessary that macro perspectives<br />
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that ground on inter-organizational interactions should be put forth <strong>and</strong> located on a conceptual<br />
ground.<br />
The purpose of this study is to generate a conceptual framework that reveals the impact of interorganizational<br />
networks on the adoption process of information technologies. Since the most<br />
important application field of information technologies is organizations, in this study it is aimed at<br />
generating a conceptual framework from the aspect of organization communities <strong>and</strong> organization<br />
theories. In developing this model, basic statements of various organization theories such as network<br />
theory, institutional theory <strong>and</strong> dependency theory were used. As a result of the study, testable<br />
propositions were formed for future studies.<br />
2. Literature review<br />
Adoption can be defined as a decision to make full use of a new idea as the best course of action<br />
available (Rogers, 1995). In other words, adoption involves some form of evaluation of an innovation<br />
to determine if it will best satisfy the needs of the prospective adopting organization, as well as the<br />
sustained use of the innovation (Hausman <strong>and</strong> Johnston, 2005). Since information technology began<br />
to have an important impact on the way firms are both managed <strong>and</strong> organized, researchers have<br />
investigated the organizational factors behind the degree of adoption of computing, robotic or<br />
telecommunications technologies (Bruque <strong>and</strong> Moyano, 2006: 242). Organizational factors behind<br />
information technology adoption may be as important as other elements such as technical factors<br />
(Premkumar et al., 1997), although they are usually seen as less significant by practitioners (Fletcher<br />
<strong>and</strong> Wright, 1995).<br />
A great majority of the previous research that focuses on the adoption process of information<br />
technologies are empirical studies based on intra-organizational factors because such studies are<br />
those which maximize organizational benefit <strong>and</strong> which are performance based. Particularly, they give<br />
suggestions <strong>and</strong> make recommendations for increasing efficiency in order to avoid from the criticisms<br />
of implementers. Therefore, they are mostly related with internal factors such as the structure,<br />
strategy or culture of organization. For instance, the previous studies has focused adoption of<br />
information technology in small <strong>and</strong> medium-sized organizations (Bruque <strong>and</strong> Moyano, 2006; Fink,<br />
1998); a technology leaders who support the technological change (Brancheau <strong>and</strong> Wetherbe, 1990;<br />
Roberts <strong>and</strong> Liu, 2001); the managers’ support for the adoption of information technology (Leonard-<br />
Barton <strong>and</strong> Deschamps, 1988; Soliman <strong>and</strong> Janz, 2004); information technology as competitive<br />
advantage <strong>and</strong> selection of suitable IT strategies (Powell <strong>and</strong> Dent-Micallef, 1997; Fletcher <strong>and</strong><br />
Wright, 1995); cultural dimensions of information technology adoption (Leidner et.al., 2006).<br />
Besides empirical studies, there are quite a lot of conceptual studies.The most used theories are the<br />
technology acceptance model (TAM) (Davis, 1989), theory of planned behaviour (TPB) (Ajzen 1991),<br />
unified theory of acceptance <strong>and</strong> use of technology (UTAUT) (Venkatesh et al. 2003), diffusion of<br />
innovations (DOI) (Rogers, 1995), <strong>and</strong> technology, organization <strong>and</strong> environment (TOE) framework<br />
(Tornatzky <strong>and</strong> Fleischer 1990). Although these conceptual models had a significant contribution in<br />
literature, they couldn’t provide many explanations regarding the behavioral patterns of organizational<br />
communities. The one that emphasizes inter-organizational interaction <strong>and</strong> the importance of the<br />
environment factor among these conceptual models has been TOE. The TOE framework identifies<br />
three aspects of an enterprise's context that influence the process by which it adopts <strong>and</strong> implements<br />
a technological innovation: technological context, organizational context, <strong>and</strong> environmental context.<br />
Technological context describes both the internal <strong>and</strong> external technologies relevant to the firm.<br />
Current equipment <strong>and</strong> practices within organization <strong>and</strong> the set of available technologies that<br />
can be transferred from the organization.<br />
Organizational context refers to internal descriptive measures about the organization such as<br />
scope, size, <strong>and</strong> managerial structure.<br />
Environmental context is the external context in which an organization conducts its business such<br />
as industry, competitors, <strong>and</strong> government (Tornatzky <strong>and</strong> Fleischer 1990).<br />
The TOE framework as originally presented, <strong>and</strong> later adapted in IT adoption studies, provides a<br />
useful analytical framework that can be used for studying the adoption <strong>and</strong> assimilation of different<br />
types of IT innovation (Oliviera <strong>and</strong> Martins, 2011: 112). The TOE framework has a solid theoretical<br />
basis, consistent empirical support <strong>and</strong> the potential of application to IS innovation domains, though<br />
specific factors identified within the three contexts may vary across different studies (Oliviera <strong>and</strong><br />
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Martins, 2011: 112). Although TOE emphasizes the internal <strong>and</strong> external components of the<br />
organizations, the environment context as external component includes new <strong>and</strong> varying factors that<br />
influence the IT adoption. There are plenty of studies in literature that develop TOE framework <strong>and</strong><br />
redefine it (e.g., Chong et al., 2009; Kuan <strong>and</strong> Chau, 2001). However, none of these studies mentions<br />
about the effect of inter-organizational networks. Hence, our purpose in this study is to develop a<br />
model that puts forth the effects of inter-organizational networks on the adoption process of<br />
information technologies within the scope of environmental context.<br />
3. Conceptual framework of adoption<br />
Previous models of organizational adoption are primarily limited to the intra-organizational context<br />
where the organizations make an adoption decision <strong>and</strong> employees subsequently decide whether to<br />
use the innovation. Our framework in this study is specifically related to critical inter organizational<br />
relationships. We categorize our conceptual framework with network components of adoption<br />
process. And three organization theories (network theory, dependency theory <strong>and</strong> institutional theory)<br />
will underlie our conceptual framework <strong>and</strong> also specific propositions.<br />
3.1 Social network of organizations: Strong <strong>and</strong> weak ties<br />
Social network theory concerns how actors (e.g., individuals, groups, organizations, etc.) are tied by<br />
some sort of social relationship (e.g., advice giving, resource sharing, alliance partnership, etc)<br />
(Moliterno <strong>and</strong> Mahony, 2011). Today’s organizations have to be involved in a cooperation network<br />
with different actors in order to survive in the complex business environment <strong>and</strong> ensure<br />
sustainability. Assuring the stability of commercial life requires that the relationships within this<br />
network should be managed successfully <strong>and</strong> in coordination for long years. Each organization is<br />
embedded within multiple overlapping networks, such that changes in one network impact their<br />
functionality <strong>and</strong> relationship with organizations in other networks to which they are members. Social<br />
interactions among the actors have some positive or negative effects on economical behaviour (Uzzi,<br />
1997: 36). This effect of actors on economical processes also provides that they get close to some<br />
different actors <strong>and</strong> create relational actions for the purpose of gaining some benefits. Actors such as<br />
organizations or the representatives of the organization make use of their social interactions during<br />
the process of realizing the economical actions.<br />
Granovetter (1985: 504) indicates that behaviors among actors who are the representatives of the<br />
organization are embedded into the social networks established based on the relations, which is<br />
significant in ensuring trust in social life. That is, actors have some network relations in social life <strong>and</strong><br />
these networks develop in time based on trust. According to Uzzi (1999: 483) relations based on trust<br />
appearing in network mechanisms creates an effect that can hinder opportunist behaviors <strong>and</strong> abuse<br />
of actors. Hence, it is pointed out that a general belief that forming relations with well-known actors<br />
where trust expectations arise among networks members results in positive outcomes will occur (Uzzi,<br />
1999: 483). One of the reasons why actors establish a network mechanism by forming social relations<br />
among themselves is that actors outside the social network mechanism experience more problems in<br />
terms of obtaining knowledge than the others. Uzzi, (1999: 483) puts forth that special knowledge that<br />
parties have will spread through the established relationships <strong>and</strong> brings in skills for the parties<br />
engaged in commercial relations. Therefore, social relations established based on mutual trust enable<br />
to transfer technical <strong>and</strong> strategic knowledge that cannot be obtained by market relations. In the event<br />
that knowledge that will be necessary for the actors forming social network mechanism to take<br />
rational decisions is insufficient or absent, actors react in line with the knowledge coming from the<br />
network channel. Thus, the ability of actors will be constrained to decide independent from the<br />
network mechanism <strong>and</strong> embedded social relations will be effective on the decisions taken <strong>and</strong><br />
actions in conclusion.<br />
Granovetter (1973: 1367) mentions that the relations within inter organizational networks are based<br />
on strong <strong>and</strong> weak ties. At this point strong ties cover the social relations <strong>and</strong> norms based on trust<br />
among individuals. On the other h<strong>and</strong>, weak ties are the weak <strong>and</strong> rare market relations that operate<br />
without any humanly or social connection among the parties (Granovetter, 1983: 205). While the<br />
weak ties include the sources <strong>and</strong> information that can be obtained outside the actors’ own social<br />
atmosphere, the strong ones cover the routine sources <strong>and</strong> knowledge that the actors attain from<br />
the other actors. It is an indicator of a high level of social sharing <strong>and</strong> confidence among<br />
organizations that the ties among organizations in a network mechanism are strong. In networks<br />
where strong ties are provided, competition is kept behind. In such networks, the central organizations<br />
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of the network defined as reputable, big <strong>and</strong> authoritative are highly trusted. In the event that<br />
information circulating in the network is not reliable, central organizations shall be considered as<br />
model by the small scaled follower organizations. Thus, adoption of an innovation will be faster.<br />
Proposition 1.1. As the number of strong ties among the central <strong>and</strong> follower organizations increases,<br />
the level of IT adoption in the network increases as well.<br />
Proposition 1.2. As the number of weak ties among the central <strong>and</strong> follower organizations increases,<br />
the level of IT adoption in the network decreases.<br />
On the other h<strong>and</strong>, Granovetter (1983) stresses the importance of weak ties that may be formed with<br />
the organizations outside the network. Weak ties would particularly enable fast access to information<br />
<strong>and</strong> adaptation to change (Granovetter, 1983: 202). Granovetter (1973: 1367) states that<br />
organizations with a lot of weak ties outside the network will have a great advantage in terms of<br />
spreading innovations. Weak ties provide that organizations have access to sources <strong>and</strong> information<br />
outside their own social setting (Granovetter, 1983: 209).<br />
The strength of a tie can be stated with concepts as the duration of the ongoing interactions,<br />
emotional intensity, intimacy <strong>and</strong> reciprocal services realized (Granovetter, 1973: 1360). Granovetter<br />
(1983: 202) suggests that organizations with a limited number of weak ties will lack the opportunity to<br />
access information in the distant parts of the social system <strong>and</strong> confine themselves with information in<br />
the network. According to Burt (2004), it is not possible to form weak ties outside the network for<br />
every actor. Burt (2001; 2004; 2005) uses the concept of structural holes to shed a new light on the<br />
concept of social capital. Structural holes theory defines information <strong>and</strong> control advantage that<br />
broker – central - organizations possess in providing the relationship between networks (Burt, 1992).<br />
Mediating organizations in organizational life provide the circulation of information in different aspects<br />
of the economic system <strong>and</strong> they affect the structure for their personal benefit. Thanks to this,<br />
information transfer between different networks is obtained (Gargiulo <strong>and</strong> Benassi, 2000: 184).<br />
Central organizations get crucial advantages of his bridging function <strong>and</strong> the position possessed by<br />
him provides an advantageous point in the organizational field (Burt, 2004: 356). The realization of<br />
structural holes <strong>and</strong> the provision of linkages between these holes are directly related to actors’<br />
experience. For this reason, brokers (such as central organizations) provide information transfer<br />
between unrelated networks <strong>and</strong> mediate between the actors who have no chance of achieving a<br />
relationship with other actors by their own. These kinds of central – broker - organizations in the<br />
organizational field develop different interpretation <strong>and</strong> prediction capabilities in order to gain<br />
competitive advantage (Burt, 2004: 356). Thus, weak ties formed outside the network will<br />
accelerate the entry of the recent innovations transferred into the network. The entry of innovations<br />
will accelerate that several organizations in the network make use of these innovations.<br />
Proposition 2. As the number of weak ties central organizations from outside the network increases,<br />
the level of adoption within the network increases as well.<br />
3.2 Dependency in social networks<br />
The basis of studies conducted regarding the dependency relationships among organizations is<br />
based on the resource dependency theory (Pfeffer ve Salancik, 1978). Resource dependency theory<br />
speaks to competitive processes by which resource scarcities brought about by widespread use of a<br />
st<strong>and</strong>ard lead to change (Leblebici et al., 1991; Sherer, 2001). According to the resource dependency<br />
theory, organizations are not completely self-sufficient. They cannot internally provide all the<br />
resources <strong>and</strong> needs they require. They have to obtain some resources needed from the factors in<br />
their environment, which will cause them to interact with the factors in their environment. One of the<br />
main problems of organizations is to supply their resource needs from other organizations when<br />
resources are scarce. This situation makes it compulsory that resource supply is stable <strong>and</strong> support<br />
from resource providers is obtained. Should an organization experience trouble in providing<br />
resources, it will be difficult to maintain its activities. Therefore, it may be required that the<br />
organization should fulfill the expectations of the organizations it is interacting with.<br />
Pfeffer <strong>and</strong> Salancik (1978) mentioned that dependency relationship appears in two conditions. (1)<br />
To what extent the required resource is important in order for the organization to survive? (2) Are<br />
there any other organizations that possess the required resource? If an organization is highly<br />
dependent on another, the latter one is in a stronger position in that relationship. Thus, the central<br />
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organizations that are strong in the dependency relationship want that innovation they have is<br />
adopted by the follower organizations. Because central organizations want to ensure continuity of<br />
dependency relationship. The follower organization that transfers an information technology would<br />
have to be dependent to the central organization for a while.<br />
NETWORK C<br />
Strong Ties<br />
NETWORK A<br />
NETWORK B<br />
Weak Ties<br />
Organization<br />
Figure 1: Strong <strong>and</strong> weak ties of organizations (Burt, 1992)<br />
Proposition 3. As the dependency between the follower <strong>and</strong> central organization in a network<br />
increases, the level of adoption in the network increases as well.<br />
3.3 Isomorphic inclination in organizational networks<br />
Institutional literature emphasizes that organizational structure <strong>and</strong> processes tend to become<br />
isomorphic with the accepted norms for organizations of particular types (DiMaggio <strong>and</strong> Powell,<br />
1983). According to the institutional theory, the structures <strong>and</strong> processes of organizations are<br />
shaped as a result of their compliance in the institutional environment they exist in (Ozen, 2007:<br />
240). The institutional environment is a built environment which include the rational structures,<br />
norms, rules, beliefs <strong>and</strong> legends formed outside <strong>and</strong> over the organizations (Ozen, 2007: 241).<br />
According to DiMaggio <strong>and</strong> Powell (1991: 67-74), organizations adopt the structures <strong>and</strong><br />
implementations suggested by the common laws <strong>and</strong> become isomorphic.<br />
The theory claims that firms become more similar due to isomorphic pressures <strong>and</strong> pressures for<br />
legitimacy. Because organizational decisions are not driven purely by rational goals of efficiency, but<br />
also by social <strong>and</strong> cultural factors <strong>and</strong> concerns for legitimacy. Such an environment is named as the<br />
institutional environment. In order for the organizations to survive, being technically efficient is not<br />
enough but they need to validate themselves by adopting the institutions in this environment. As a<br />
result, since organizations living in the same “organizational area” must adapt to the similar<br />
institutions regardless of their specific rational requirements, they become structurally isomorphic<br />
(Meyer <strong>and</strong> Rowan, 1977; Scott <strong>and</strong> Meyer, 1991). This means that firms in the same field tend to<br />
become homologous over time, as competitive <strong>and</strong> customer pressures motivate them to copy<br />
industry leaders. For example, rather than making a purely internally driven decision to adopt ecommerce,<br />
firms are likely to be induced to adopt <strong>and</strong> use e-commerce by external isomorphic<br />
pressures from competitors, trading partners, customers, <strong>and</strong> government. Mimetic, coercive, <strong>and</strong><br />
normative institutional pressures existing in an institutionalized environment may influence<br />
organizations' predisposition toward an IT-based interorganizational system (Teo et al. 2003).<br />
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Several positions, policies, procedures, programs in modern organizations <strong>and</strong> opinions of the<br />
important groups of the society are validated by public opinion <strong>and</strong> laws (Meyer <strong>and</strong> Rowan, 1977).<br />
These elements of the formal structure are expressive indicators of strong institutional rules that serve<br />
like rationalized myths (Ozen, 2007). Meyer <strong>and</strong> Rowan (1977) argue that they should adopt these<br />
rationalized innovations that functions as a myth. By this way, organizations adopt these innovations<br />
not because of increasing their own technical efficiencies but because it is externally “legitimate”. In<br />
order to demonstrate to the external environment that they are doing to this, they consider external or<br />
ceremonial assessment criteria (certificates, documents, awards… etc.) (Meyer <strong>and</strong> Rowan,1977). In<br />
conclusion, organizations become isomorphic with the organizations around them by copying them.<br />
Hence, rationalized institutional rules <strong>and</strong> institutional myths will create the most fundamental impact<br />
facilitating the spread of innovation in a network. The source of these effects will be the significant<br />
organizations in the state, professional organizations <strong>and</strong> the organizations in the institutional field.<br />
Proposition 4. As the rationalized institutional rules <strong>and</strong> institutional myths in a network towards<br />
innovation become widespread, the level of adoption increases.<br />
In the light of our testable propositions, conceptual model can be summarized in Figure 2.<br />
Outside the Network<br />
Low Adoption<br />
Low Dependency<br />
Within the Network Weak Ties<br />
Low Dependency<br />
High Adoption<br />
Unknown<br />
High Institutionalization<br />
Strong Ties<br />
Figure 2: Conceptual model of IT adoption for inter organizational networks<br />
4. Conclusion<br />
In this study, we developed a conceptual framework that reveals the contribution of interorganizational<br />
networks in the process of adoption of information technologies. The empirical <strong>and</strong><br />
theoretical studies regarding the adoption of information technologies mostly focus on factors inside<br />
the organization. Most adoption researchers have mainly focused on evaluating a few variables that<br />
impact the adoption of specific technologies by a single organization or consumer, mostly<br />
disregarding a holistic consideration of factors that might shape cooperative adoption, especially in a<br />
network context. Thus, strong <strong>and</strong> weak ties, dependency relations <strong>and</strong> isomorphic inclination which<br />
are escape researchers’ notice as a topic of organizational networks investigated in this study. This<br />
study reveals the fact that not only the efficiency based technical environment but also the institutional<br />
environment <strong>and</strong> the dependency relationships should be analyzed by the implementers. Therefore, it<br />
will be beneficial that IT adoption is measured with both micro variables <strong>and</strong> macro interactions.<br />
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Portfolio <strong>Management</strong> in Non-Profit Organizations: The<br />
Case of Groningen’s Municipality<br />
Bert Kleersnijder <strong>and</strong> Egon Berghout<br />
University of Groningen, The Netherl<strong>and</strong>s<br />
bkleersnijder@gmail.com<br />
e.w.berghout@rug.nl<br />
Abstract: The purpose of this research is to develop a method to support governing the information function, <strong>and</strong><br />
in particular, the planning <strong>and</strong> prioritization of IT projects. Groningen’s municipality serves as a case study<br />
organization. The core of the methodology consists of the ‘Hourglass’, which provides the overview of IT <strong>and</strong><br />
service programs. The Hourglass supports the Municipal Council to supervise the college program, which, in its<br />
turn, is based on a long-term strategy. These layers all play a subsequent role in the development of the project<br />
portfolio. Consequently, the Hourglass provides a transparent methodology that enables the development <strong>and</strong><br />
tracing of the IT project portfolio of Groningen’s municipality. The Hourglass methodology has been derived from<br />
the reviewing of literature <strong>and</strong> the conducting of case studies of Groningen’s municipality. Literature regarding<br />
characteristics of the organization itself <strong>and</strong> external literature has been used. Within the municipality, the<br />
characteristics of projects <strong>and</strong> programs were studied <strong>and</strong> key decision makers were interviewed. The Hourglass<br />
methodology has now been operational for one year. This research also contains a method that prioritizes the<br />
proposed projects in a portfolio model. By <strong>using</strong> the prioritization technique, the implications that new projects<br />
have for the organization can be assessed in a significantly better manner. The Hourglass is also an instrument<br />
for the guidance of finances, planning of capacity <strong>and</strong> scheduling. Because of the Hourglass model, the<br />
successful <strong>and</strong> timely completion of projects has increased significantly.<br />
Keywords: project portfolio management, ICT project prioritization, non-profit, municipalities<br />
1. Introduction<br />
At Groningen’s municipality, internal business reviews indicated that it is important to organize the<br />
resources supporting the primary process <strong>and</strong> the government of the I&A organization. Conclusions<br />
from this research were to further organize the government of the I&A function <strong>and</strong> to develop a<br />
method for the planning <strong>and</strong> prioritization of I&A projects (BOIA report, 2008). The purpose of this<br />
research is to propose a method that helps to govern the I&A function, <strong>and</strong> particularly the section on<br />
planning <strong>and</strong> prioritization of I&A projects. Groningen’s municipality serves as a case study<br />
organization. Within the context of this organization, the methods are developed to govern the I&A<br />
function, the ICT projects <strong>and</strong> how to apply this governance. First, a literature review is discussed is<br />
set forth. Then, interviews were conducted with the involved employees <strong>and</strong> documents of the<br />
organization were reviewed. Finally, the research has led to the development of an I&A governance<br />
method, including a project portfolio <strong>and</strong> prioritization method.<br />
2. Portfolio theory<br />
Research by Jeffery <strong>and</strong> Leliveld indicated that 41% of their surveyed organizations have little<br />
overview of how much they spend on ICT, 46% of the organizations do not have their applications<br />
<strong>and</strong> infrastructure properly identified, 47% of the organizations do not have a central overview of ICT<br />
projects, 57% of the organizations had no criteria for these projects to weigh them together <strong>and</strong> 41%<br />
of the organizations did not calculate the periodic return on investment (ROI) for each project (Jeffery<br />
<strong>and</strong> Leliveld, 2004). These problems indicate that there is definitely a need for additional governance<br />
over ICT, <strong>and</strong> portfolio theory could possibly provide this governance. The portfolio theory is rooted in<br />
finance where stock portfolios are defined to reduce risks. In 1990, Markowitz, Miller <strong>and</strong> Sharpe<br />
received the Nobel Prize for their work in this area. Many propagate the use of portfolio theory to<br />
reduce risks associated with IT investments. For instance, Maizlitz propagates portfolio management<br />
to assess IT (Maizlitz, 2005). Portfolio management should particularly be considered when the<br />
strategic contributions of IT remain uncertain, when the transparency of investment funds remain<br />
insufficiently transparent, when there seem to be too many projects, when incomplete criteria for the<br />
assessment of IT projects are applied, or when there is inadequate IT governance (Maizlitz, 2005).<br />
Maizlitz’s research indicates that most organizations could benefit from portfolio management<br />
(Maizlitz, 2005).<br />
From the literature, several portfolio management <strong>and</strong> project descriptions can be derived. Portfolio<br />
management comprises all structured processes for evaluating projects in a portfolio (diagram) along<br />
different dimensions. This primarily concerns the composition of the portfolio <strong>and</strong> the total number of<br />
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projects (Simon et al, 2010). Cooper defines portfolio management as a dynamic decision-making<br />
process in which an organization continuously evaluates , selects <strong>and</strong> prioritizes projects. Projects<br />
can be accelerated or stopped by dividing the available resources (time <strong>and</strong> money). The process is<br />
characterized by uncertain <strong>and</strong> constantly changing information, multiple goals, strategic<br />
considerations <strong>and</strong> sensitivities <strong>and</strong> different decision makers (Cooper et al, 1999).<br />
When organizations work with project portfolios, information is provided on the individual projects,<br />
however, also on the accomplishments of the portfolio as a whole. For example, information on the<br />
number <strong>and</strong> type of these projects, on how funds are used, on the variation in the service of relevant<br />
ICT services <strong>and</strong> on the costs of ICT provision is provided. There is also information about the<br />
percentage of successful projects, the number of ongoing projects <strong>and</strong> the estimation of the hours in<br />
various ICT disciplines that are needed for the project. This can be used as governance information<br />
for the I&A office or ICT governance function (Kaplan, 2005).<br />
Bonham further states that a ‘Project <strong>Management</strong> Office’ (PMO) audit team should have an input on<br />
the prioritization of the portfolio. After a periodic review of these projects, the projects will have to be<br />
reviewed again to check if they are in line with the organization, technology <strong>and</strong> consistency of other<br />
projects. After this checking, the final scores on the projects can turn out to be a bit higher or lower<br />
<strong>and</strong> the results provide the management with a better insight on how the projects relate to each other.<br />
The aforementioned PMO is concerned with the information on projects within an organization. The<br />
main target is to govern <strong>and</strong> monitor the projects. A PMO team can help an organization to get a good<br />
underst<strong>and</strong>ing of the portfolio so that the organization can establish its objectives more efficiently <strong>and</strong><br />
can achieve them at a lower cost. PMO is not about managing projects, but about the why, which <strong>and</strong><br />
how of tackling projects. PMO should be seen as a layer on top of the previous projects, but can also<br />
operate in an internal project. The PMO can generate management information that can help the<br />
management to make decisions concerning the projects (Bonham, 2004).<br />
There are several ways to prioritize projects. Mathematical formulas can be used to maximize the<br />
portfolio to an optimal portfolio to develop the generation of income (Wen & Shih, 2006; Bardhan et al,<br />
2004; Kim et al, 2009). In practice, this method is not often applied to prioritizing projects. This is<br />
because the prioritization cannot be applied to projects of which the long-term benefits of ICT<br />
investment cannot be identified at an early stage, because there are not enough financial details<br />
available on the project, <strong>and</strong> because the earnings of the ICT project are not quantifiable (Wen &<br />
Shih, 2006). Methods with a multi-criteria approach assess quantitative <strong>and</strong> qualitative consequences<br />
of an investment project (Renkema & Berghout, 2005). Scoring methods are seen as a multi-criteria<br />
approach that can help managers evaluate ICT investments based on the objectives of the<br />
organization (Wen & Shih, 2006). In this scoring method, projects are compared <strong>and</strong> assessed on<br />
values <strong>and</strong> then the total scores are listed (Wen & Shih, 2006; Kim et al, 2009). Scoring methods are<br />
particularly interesting because they offer a way to include the non-financial criteria in the assignment<br />
of value as well (Wen & Shih, 2006). Ghasemzadeh also uses the scoring method in his project<br />
portfolio technique. The total weighted score is the final score of the project <strong>and</strong> is then placed in the<br />
overall list (Ghasemzadeh & Archer, 2000).<br />
3. Characteristics of municipalities<br />
Government agencies differ from commercial organisations in many ways <strong>and</strong> one of these<br />
differences lies within their administration. The Netherl<strong>and</strong>s is a decentralized unitary country. The<br />
Dutch government comprises three levels of government. Besides the central government, there are<br />
12 provinces <strong>and</strong> 431 municipalities. The provinces have the function of ensuring the implementation<br />
of state policy in the regional plans. The municipalities have the function of ensuring the quality of the<br />
citizens’ immediate environment. The provinces <strong>and</strong> municipalities are also referred to as 'local<br />
governments'. The municipalities are the basic cells of democracy; of all governments, they are the<br />
closest to the citizen. The municipality is autonomous, meaning that it is competent to regulate <strong>and</strong><br />
govern the local economy at its discretion. On the other h<strong>and</strong>, the municipality is obligated to cooperate<br />
with the central government <strong>and</strong> to assist on the implementation of their 'higher' rules. Once a<br />
task is regulated by this higher law, municipalities are required to implement them. The city council<br />
represents the highest form of management within the municipality. This council represents the<br />
citizens of the city, formulates policies <strong>and</strong> sets priorities. The council ensures that the municipal<br />
Board of Executives has achieved the envisioned policies <strong>and</strong> goals. The city council <strong>and</strong> municipal<br />
executives are also engaged in the municipality’s administration. It sets the rules <strong>and</strong> carries them<br />
out. The municipality is not a business, but technically many processes work in a similar way as in<br />
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businesses. The Municipal Clerk is the highest civil servant in the municipality <strong>and</strong> forms a<br />
management team together with the directors from the various departments in the municipality. This<br />
management team is called a General <strong>Management</strong> Team or AMT.<br />
4. Portfolio method design<br />
In light of the goal of this research, it is essential that the I&A projects are planned <strong>and</strong> prioritized. All<br />
corporate wide projects that meet the definition of 'project' will have to be weighted according to the<br />
criteria. The portfolio method was developed so that each department will have a department portfolio<br />
<strong>and</strong> a large corporate portfolio can be created. There will always be a bigger dem<strong>and</strong> for ICT projects<br />
than one organization can h<strong>and</strong>le. It is therefore necessary to make choices <strong>and</strong> question why certain<br />
projects should be executed (Glaser, 2006). To effectively apply the prioritization, there are four<br />
necessities, namely a good project proposal, an existing ICT strategy within an organization that<br />
shows the choices that need to be made, a process designed to evaluate <strong>and</strong> compare project<br />
proposals, <strong>and</strong> an opportunity to take steps to adjust the scope of the project to (Glaser, 2006).<br />
To ensure a proper prioritization, projects have to be set against certain criteria <strong>and</strong> need to be<br />
weighed. The principle is that all projects are assigned a certain value <strong>and</strong> are prioritized for the<br />
implementation before they are executed. This is done in phases so that projects which are located<br />
further into the future can be mapped (Glaser, 2006). In the prioritization process, the department’s<br />
information manager will inform the project leader <strong>and</strong> the commissioner to take the lead in<br />
prioritizing. They apply the criteria, weigh the issues <strong>and</strong> determine the priority. This will create the<br />
department portfolio. It is the municipality’s joint portfolio manager’s task to draw up a broad corporate<br />
portfolio based on the department portfolios. It is therefore possible that the corporate portfolio<br />
manager recommends a re-prioritization when a common weighing factor changes.<br />
4.1 Prioritization criteria<br />
Based on the previous components, the portfolio manager will create an optimal portfolio selection<br />
which best fits the municipality’s needs. Prioritization is used to see which projects should be<br />
executed first. Decision criteria support this prioritization. When developing a prioritization process, it<br />
is important that the criteria are kept simple <strong>and</strong> specifically designed for the specific organization<br />
(Bonham, 2004). The criteria used in our method have been identified through interviews with project<br />
leaders, department heads, principals, information managers <strong>and</strong> policy-makers. This has resulted in<br />
two main categories of criteria, being ‘necessity’ <strong>and</strong> 'business'.Glaser (2006) calls the PID (Project<br />
Initiation Document) the beginning of the project prioritization process; the proposal must meet a<br />
number of requirements before it is read, <strong>and</strong> then the project proposal can be assessed. The<br />
prioritization technique provides the organization with the important points which should receive a<br />
sufficient score before the proposal is made to insert a certain project into the project portfolio. Each<br />
proposal receives a score for each area established within the organization. A scale of 5 (significant<br />
contribution) to 1 (minimal or no contribution) is used. Then the scores are added up <strong>and</strong> the projects<br />
with the highest scores are included in the portfolio (Glaser, 2006).<br />
4.1.1 The 'necessity' criteria<br />
For the 'necessity' criteria, the author of the PID is requested to assign only one criterion from 1 to 5,<br />
<strong>and</strong> is the heaviest weighed selection. These 'necessity' criteria are based on interviews. They are<br />
listed in the table 1.<br />
For the 'business' criteria, the author of the PID is requested to indicate the status of the project on all<br />
criteria (6-10). The following table shows the ranked criteria listed as 'business' criteria.<br />
With the scoring method, projects are compared <strong>and</strong> values are assessed. Then, the total scores are<br />
posted on a list (Wen & Shih, 2006; Kim et al, 2009). Ghasemzadeh & Archer also weigh on the basis<br />
of scoring in their project portfolio technique. The total weighed score is the final score of the project<br />
<strong>and</strong> is then placed on the overall list (Ghasemzadeh & Archer, 2000). This is also the methodology<br />
applied for Groningen’s municipality. The prioritization technique indicates that the proposal of the<br />
project should be scored in order to add a project to the project portfolio. Each proposal receives a<br />
score for each area established by the organization. A scale of 5 (significant contribution) to 1<br />
(minimal or no contribution) is used. Then, the scores are added up <strong>and</strong> the projects with the highest<br />
scores are included in the portfolio (Glaser, 2006). Within the context of Groningen’s municipality, a<br />
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scale of 2 (significant contribution) to 1 (minimal or no contribution) has been chosen <strong>and</strong> all projects<br />
have been included in the list. The complete list of prioritized projects arises <strong>and</strong> because the scoring<br />
methodology is used, a list of the top scoring projects is placed at the top of the list. An example of<br />
how the criteria are applied is described in figure 2 where the project portfolio sheet is displayed.<br />
Table 1: Necessity criteria<br />
Necessity Weight Description Score<br />
0 1 2<br />
Legal necessity 24 A change in existing legislation or Project has no Project has no Project has a<br />
new legislation as a result of the legal necessity. clear legal legal necessity.<br />
project. Example: under usual Law<br />
Disclosure of public law<br />
restrictions, a digital registration<br />
system is required.<br />
necessity.<br />
Political priority 18 A change in existing local policy or<br />
new local policy as a result of the<br />
project.<br />
Public interest 18 The project is directly relevant to<br />
citizens. This can be both a direct<br />
<strong>and</strong> an indirect interest. Example:<br />
Expansion of digital services on<br />
Organizational<br />
necessity<br />
Technical<br />
necessity<br />
4.1.2 The 'business' criteria<br />
Table 2: Business criteria<br />
the website.<br />
12 The project is important for the<br />
development of the organization.<br />
Example: Replacement of an<br />
application with another<br />
application, making the<br />
organization work more effectively.<br />
12 A project must be executed<br />
technically. Hardware/software is<br />
replaced/outdated or support has<br />
stopped; a project is technically<br />
necessary or a prerequisite for<br />
another project.<br />
Project has no<br />
political priority.<br />
Project has no<br />
interest for<br />
civilians.<br />
Project has no<br />
organizational<br />
necessity.<br />
Project has no<br />
technical<br />
necessity.<br />
Project has a<br />
partial political<br />
priority.<br />
Project has a<br />
partial interest<br />
for civilians.<br />
Project has a<br />
partial<br />
organizational<br />
necessity.<br />
Project has a<br />
partial technical<br />
necessity.<br />
Project has a<br />
high political<br />
priority.<br />
Project has a<br />
high interest for<br />
civilians.<br />
Project has a<br />
high<br />
organizational<br />
necessity.<br />
Project has a<br />
high technical<br />
necessity.<br />
Business Weight Description Score<br />
0 1 2<br />
Communality 8 The implementation of the<br />
No<br />
Some<br />
High<br />
project affects a large part of communality. It communality communality. It<br />
the organization. For example: is department between affects all<br />
The introduction of the<br />
‘Complaints’ system for all<br />
departments.<br />
related. departments. departments.<br />
Time 6 A project that is under pressure No direct effect Project should Project should<br />
<strong>and</strong> has certain deadlines. on the be completed be completed<br />
organization. within two<br />
years.<br />
within one year.<br />
Return 6 Projects with a return on Project does Project Project gets<br />
investments; Clarified in the not get finances possibly gets finances<br />
business proposal.<br />
returned. finances<br />
returned.<br />
returned.<br />
ICT vision 3 Project that is part of the ICT Project does Project partly Project fits into<br />
vision.<br />
not fit into the fits into the ICT the ICT vision.<br />
ICT vision. vision.<br />
Finance 3 The basis of the funding of the Finance <strong>and</strong> Finance <strong>and</strong> Finance <strong>and</strong><br />
project.<br />
budget are not budget might budget are<br />
arranged. be arranged. arranged.<br />
4.1.3 Prioritization Instrument<br />
When the criteria have been determined, they will be added to the instrument. Figure 1 displays the<br />
score model. In this process, the following questions are asked: how will the project contribute to an<br />
objective <strong>and</strong> what is the necessity of the project. Also asked is the question of how much impact the<br />
project has <strong>and</strong> if the constraints (ROI, guaranteed funding) are met.<br />
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Bert Kleersnijder <strong>and</strong> Egon Berghout<br />
Figure 1: Scoring model with example (based on interview sessions <strong>and</strong> workshops, Groningen’s<br />
municipality, 2009-2010)<br />
Only one criterion can be rated from the 1 to 5 criteria, implying that there can be only one dominant<br />
need. Furthermore, the legal necessity is prevalent <strong>and</strong> dominates the other four criteria. When there<br />
are several top scoring necessities, for example, all are ‘legally necessary’, criteria from the column<br />
'business' may still have an impact. For example: When a business project has to be finished in 2010<br />
<strong>and</strong> a project on the basis of legal necessity has to be finished in March 2011, the project with the<br />
greatest pressure will receive a higher priority. Ratings can be assigned to all of the criteria from 6<br />
to10. All ratings have an option to score 0, 1 or 2. The overall scores determine the priority in the<br />
portfolio. Therefore, it is possible that multiple projects with similar scoring totals <strong>and</strong> identical<br />
priorities coexist. By <strong>using</strong> the prioritization technique, the portfolio of projects can be better assessed.<br />
It is also an instrument that helps with the financing of projects, with the planning of the capacity for<br />
projects <strong>and</strong> with the overall scheduling of projects. By applying the method, successful <strong>and</strong> timely<br />
completion of projects has improved significantly. The I&A’s support capacity is limited. When there is<br />
additional insight into the planning <strong>and</strong> prioritization of the projects, this capacity can be better used<br />
<strong>and</strong> controlled.<br />
The prioritization of projects will give an overview of the projects that contribute most to cost savings.<br />
Under severe budget cuts, the portfolio as a tool can be used to effectively deal with the resources<br />
<strong>and</strong> the depletion of resources through better monitoring, especially when the portfolio contains many<br />
projects, when many interests are involved <strong>and</strong> when the resources are limited. There are also many<br />
shared interests <strong>and</strong> similar starting positions. A lot of businesses are communal, similar or identical<br />
in their processes. The budgets are always limited, <strong>and</strong> are also being cut under the influence of<br />
economic cycles. Prioritization of projects is necessary for this reason alone. However, there are more<br />
reasons to prioritize <strong>and</strong> govern: there is limited manpower to implement the projects, projects overlap<br />
<strong>and</strong> the absorption capacity of the organization has its limits (Bonham, 2004; Glaser, 2006;<br />
Berenschot, 2001). In this method, prioritization criteria are established based on interviews with<br />
employees involved in the projects of the organization, after which the scores to weigh the projects<br />
were developed. The prioritization tool, the project portfolio included for this research, is realized in an<br />
excel sheet. The organization has presented two parts with developed criteria : the first part<br />
containing five criteria is the 'necessity' of the project (in the sequence Legal need, Political priority,<br />
Public interest, Organizational need, <strong>and</strong> Technical need). Furthermore, the second part has five<br />
criteria that concern the 'business' (Communality, Time, Return, ICT vision, <strong>and</strong> Finance).<br />
The project portfolio also contains a main data set to make governance <strong>and</strong> accountability possible.<br />
Besides general information such as name, number, department, division, owner, project manager,<br />
fixed budget <strong>and</strong> start <strong>and</strong> finish date (overall planning in quarters), there is data that presents the<br />
phase of the project, the entered changes (with changing colours compared to the previous entries) in<br />
the timetable, the available budget <strong>and</strong> the capacity requirements. The score <strong>and</strong> priority are mapped,<br />
as well as the estimated hours, at the start of the project, to assess the capacity possibilities within the<br />
department, within the programs <strong>and</strong> within the departments of centralized corporate groups, of the<br />
functional application administrators <strong>and</strong> of the technical application managers. They all create their<br />
own detailed plans on the basis of a corporate-wide project portfolio <strong>and</strong> therefore, the capacity for<br />
projects can be checked. When a project changes the planning of time <strong>and</strong> capacity, it is the task of<br />
the project leader to adapt the planning <strong>and</strong> to send a progress report to the PPM officer <strong>and</strong> the<br />
commissioner of the project. In order to rate the quality of this governance method, the criteria, use of<br />
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prioritization tool <strong>and</strong> project portfolio sheet were review by the staff of Groningen’s municipality. They<br />
determined that the methodologies comply with the organization. The instrument was adapted <strong>using</strong><br />
suggestions from the employees involved, with some exp<strong>and</strong>ed additions. The sheet is displayed in<br />
Figure 2.<br />
5. Conclusions <strong>and</strong> recommendations<br />
In this research, a method has been developed to plan <strong>and</strong> prioritize projects in Groningen’s<br />
municipality. This method is referred to as the Hourglass method. Decision-making within a<br />
municipality is complex <strong>and</strong> therefore it is difficult to translate the political priorities. The Hourglass<br />
method increases the transparency of the decision-making in the organization. It is now much clearer<br />
which projects are being implemented <strong>and</strong> on the basis of which arguments <strong>and</strong> whether or not this<br />
supports the strategy of the organization. When monitoring business cases <strong>and</strong> projects, these have<br />
to be checked to establish their contribution to the city council programs. When there is a delay in, for<br />
instance, nationwide projects, or associated organizations stagnate (including municipalities <strong>and</strong><br />
provinces), capacity for a certain project can be allocated to other projects. This research has shown<br />
that there is sufficient support from the departments to create a project portfolio overview. However, it<br />
lacks the continuance of the translation of decisions (for example the college program) into the project<br />
portfolio. Ultimately, the governing mechanism I&A for departments should work in such a way that<br />
there is a thorough check on the positioning within the project portfolio of projects from the college<br />
program <strong>and</strong> of projects arisen from the visions from organization’s objectives. The AMT will always<br />
need to know which projects, within the department, are in progress <strong>and</strong> when a project is missing<br />
from the portfolio, it should be added <strong>and</strong> prioritized immediately. Furthermore, the portfolio overviews<br />
can be used for justification towards the Council.<br />
276
Bert Kleersnijder <strong>and</strong> Egon Berghout<br />
Figure 2: Project portfolio sheet (based on interview sessions <strong>and</strong> workshops, Groningen’s<br />
municipality, 2009-2010)<br />
References<br />
Bardhan, I., Bagchi, S., Sougstad, R,. 2004. Prioritizing a Portfolio of <strong>Information</strong> Technology Investment<br />
Projects, Journal of <strong>Management</strong> <strong>Information</strong> Systems, fall 2004, Vol. 21, No. 2, pp. 33-60.<br />
Berenschot, 2001. Onderzoek inrichting van de I&A-functie in de Gemeente Groningen, deel 1-A advies.<br />
Gemeente Groningen.<br />
Berenschot, 2001. Onderzoek inrichting van de I&A-functie in de Gemeente Groningen, deel 1-B<br />
dienstrapportages. Gemeente Groningen.<br />
Berghout, E., Renkema, T. 2005. Investeringsbeoordeling van IT-projecten, een methodische aanpak, 3 e<br />
herziende druk. <strong>Information</strong> <strong>Management</strong> Institute B.V.<br />
Bonham, S. 2004. IT Project Portfolio <strong>Management</strong>. ARTECH House, Inc.<br />
Cooper, R.G., Edgett, S.J., Kleinschmidt, E.J., 1999. New Product Portfolio <strong>Management</strong>: Practices <strong>and</strong><br />
Performance, Journal of Product Innovation <strong>Management</strong>, Volume 16, Issue 4, pages 333–351, July 1999<br />
Ghasemzadeh, F., Archer, N.P., 2000. Project portfolio selection through decision support, Michael G. DeGroote<br />
School of Business, Elsevier, accepted 24 February 2000.<br />
Glaser, J. 2006. IT Proposals Competing For Attention - Learn How To Prioritize, Healthcare Financial<br />
<strong>Management</strong><br />
Jeffery, M. <strong>and</strong> Leliveld, I. Best practices in IT portfolio management, Sloan management review, spring 2004.<br />
Kaplan, J. 2005. Strategic IT Portfolio <strong>Management</strong>, Pittiglio, Rabin TOod & McGrath (PRTM)<br />
277
Bert Kleersnijder <strong>and</strong> Egon Berghout<br />
Kaplan, R.S., Norton, D. 1992. The balanced scorecard: measures that drive performance, Harvard Business<br />
Review, January-February, p 71-79.<br />
Kim, S.J. et all. 2009. A Scoring Method For Prioritizing non-mutually-exclusive information technologies. Human<br />
Systems <strong>Management</strong>.<br />
Maizlitz, B. en H<strong>and</strong>ler, R. 2005. IT portfolio management, step by step, John Wiley, Hoboken..<br />
Projectgroep BOIA, 2008. Rapport Bedrijfskundig Onderzoek Informatie- & Automatiseringsfunctie Gemeente<br />
Groningen. Gemeente Groningen.<br />
Projectgroep BOIA, 2010. Uitvoeringsplan BOIA Gemeente Groningen. Gemeente Groningen.<br />
Simon, D. en Fischbach, K. en Schoder, D. 2010. Application portfolio management- An ingrated Framework <strong>and</strong><br />
a software tool evaluation approach, Communications of the ACM, Volume 26.<br />
Wen, H.J., Shih, S.C. 2006. Strategic information technology prioritization, Journal Of Computer <strong>Information</strong><br />
Systems.<br />
278
Why is an IS Project Late? – A Case Study<br />
Juha Kontio<br />
Turku University of Applied Sciences, Turku, Finl<strong>and</strong><br />
juha.kontio@turkuamk.fi<br />
Abstract: <strong>Information</strong> system (IS) projects are challenging <strong>and</strong> different types of information systems failures can<br />
be identified. One type of the failures is process failures. Process failure occurs when the project timetable or<br />
budget is overrun. This paper presents a case study of a project that falls into this failure definition. This<br />
information system project started in 2008 <strong>and</strong> the aim was to create an information system to the Turku<br />
University of Applied Sciences for the teaching process. The goal of the project was to define, develop <strong>and</strong><br />
implement new easy-to-use web-based tools for curriculum management, yearly planning of the degree<br />
programs’ teaching, students’ personal study plans, <strong>and</strong> teachers’ yearly work load management. This new tool<br />
should combine all the information in a single database instead of the separate information systems <strong>and</strong><br />
databases we used to have. At the beginning of the project necessary functions that the new system should<br />
provide were defined. Based on these definitions a competitive bidding was launched with the idea that in the<br />
markets there are information systems that can be easily tailored to our specific needs. However, only one<br />
provider turned out to have an information system that fulfilled the initial definitions stated in the bid. This provider<br />
was selected <strong>and</strong> the actual tailoring of their information system for our purposes started in the summer of 2008.<br />
The definition <strong>and</strong> piloting phase showed that the basic operations in the information system are quite easily<br />
tailored to our needs. On the other h<strong>and</strong>, many of our specific needs required more work than was estimated.<br />
The operational use of the information system started in the spring of 2009 with the curriculum management <strong>and</strong><br />
yearly planning of degree programs’ teaching features. Since then the number of users has quickly increased <strong>and</strong><br />
at the same time new necessary corrections have been identified. These features have been prioritized <strong>and</strong> the<br />
other features have postponed. The project was supposed to end in 2009, but modifications in curriculum<br />
management <strong>and</strong> yearly planning of degree programs’ teaching features are still continuing. In addition, both<br />
teachers’ yearly work load management <strong>and</strong> students’ personal study plans features have been postponed to<br />
2011. Our paper introduces the whole IS project <strong>and</strong> discusses the reasons why the project is still continuing <strong>and</strong><br />
why this project is a process failure. We will also reflect our experiences <strong>and</strong> try to provide observations for future<br />
IS project management.<br />
Keywords: information system project, project delay, higher education, case study<br />
1. Introduction<br />
<strong>Information</strong> systems can be analyzed in many different ways. However, it is a fundamental difficulty in<br />
defining exactly what constitutes IS success <strong>and</strong> failure (Fowler <strong>and</strong> Horan, 2007). Still, companies<br />
that have formally defined success, measured success <strong>and</strong> acted on the results, have improved their<br />
IT project outcomes (Thomas <strong>and</strong> Fern<strong>and</strong>ez, 2008). In addition, several critical success factors of<br />
projects have been identified (Fortune <strong>and</strong> White, 2006) <strong>and</strong> based on their literature review the five<br />
most cited success factors are:<br />
Support from senior management<br />
Clear realistic objectives<br />
Strong/detailed plan kept up to date<br />
Good communication/feedback<br />
User/client involvement.<br />
DeLone <strong>and</strong> McLean provide a popular model (Figure 1) to evaluate the success of an information<br />
system (DeLone <strong>and</strong> McLean, 1992, DeLone <strong>and</strong> McLean, 2003). The dimensions of the model are<br />
as follows. First, information quality refers to the quality of the information like the relevance,<br />
reliability, accuracy <strong>and</strong> completeness of the information. Second, system quality refers to system<br />
performance like usability, availability, system efficiency <strong>and</strong> response time. Third, service quality<br />
refers to user support. Fourth, user satisfaction refers to overall satisfaction with the information<br />
system including such as interface satisfaction. Fifth, intention to use <strong>and</strong> use describe how the<br />
information system is used. Sixth, net benefits are about the impacts the information system has to<br />
the organization, users <strong>and</strong> other stakeholders.<br />
Another viewpoint to information systems is to look information system failures. One traditional way to<br />
analyze information system failures is provided by Lyytinen <strong>and</strong> Hirscheim (1987). They categorize<br />
failures in four categories (Lyytinen <strong>and</strong> Hirschheim, 1987):<br />
279
Correspondence failure<br />
Process failure<br />
Interaction failure<br />
Expectation failure.<br />
<strong>Information</strong><br />
Quality<br />
System<br />
Quality<br />
Service<br />
Quality<br />
Juha Kontio<br />
Intention<br />
to use<br />
User<br />
Satisfaction<br />
Use<br />
Net<br />
Benefits<br />
Figure 1: Updated DeLone & McLean IS success model (DeLone <strong>and</strong> McLean, 2003)<br />
Correspondence failure emphasizes the management view of IS. The IS is a failure if the overall goal<br />
of the IS is not met. Process failure has two dimensions: the IS project cannot produce a workable<br />
system or the project develops a workable IS, but the timetable or budget is overrun. Interaction<br />
failure relates to usage level of the information system. Finally, expectation failure happens when the<br />
certain goals of the information system cannot be met such as low maintenance costs. For this paper<br />
the process failure category is the most interesting. This category relates to problems of management<br />
in predicting the required resources, budgets <strong>and</strong> possible problems. (Lyytinen <strong>and</strong> Hirschheim, 1987)<br />
Managers need to be aware of alarming signals during the project <strong>and</strong> they have to seek<br />
opportunities to turn the troubled project around. In addition, it must be understood that project<br />
conditions might change rapidly during implementation. The most important challenge is that<br />
managers do not focus on how to fix a problem rather they recognize that a problem exists <strong>and</strong> needs<br />
to be fixed. (Pan et al., 2008) Different failures could be caused by unrealistic expectations<br />
(correspondence failure), lack of resources (process failure), weak management of contractors<br />
(process failure) (Brown <strong>and</strong> Jones, 1998). The literature review by Fowler <strong>and</strong> Horan (2007)<br />
identified six most regularly cited risk factors associated with IS failure:<br />
Lack of effective project management skills/involvement,<br />
Lack of adequate user involvement,<br />
Lack of top-management commitment to the project,<br />
Lack of required knowledge/skills in the project personnel,<br />
Poor/inadequate user training <strong>and</strong><br />
Lack of co-operation from users.<br />
To avoid failures organizations should address certain questions (Gauld, 2007): 1) Are the risks in the<br />
project fully understood <strong>and</strong> manageable?, 2) Ensure that key persons are leading the project, 3)<br />
Ensure that staff <strong>and</strong> other end-users see the benefits of a proposed new IS <strong>and</strong> 4) Is the large<br />
project essential or could a series of smaller projects suffice? Furthermore, three effective practices<br />
for IT projects are identified (Thomas <strong>and</strong> Fern<strong>and</strong>ez, 2008): 1) Agree on the definition of success, 2)<br />
Measure success consistently, 3) Use the results.<br />
This paper presents a case study of an information system project that falls into process failure<br />
definition. The project is still continuing <strong>and</strong> in this paper we will analyze the reasons why the project<br />
is way behind its’ original schedule. In the next sections, we will introduce the project, the research,<br />
the results <strong>and</strong> finally discuss the observations.<br />
280
2. The project<br />
2.1 Background <strong>and</strong> requirements<br />
Juha Kontio<br />
In 2008, the Turku University of Applied Sciences was <strong>using</strong> an old information system (Study<br />
register) to manage students <strong>and</strong> their study credits <strong>and</strong> assessments. The information system<br />
contained<br />
Student register<br />
Curriculum register (courses <strong>and</strong> implementations)<br />
Students’ credits<br />
Basic teacher information<br />
User management.<br />
In addition, a separate Lotus Notes database was used for detailed curriculum descriptions.<br />
Necessary information was manually copied to the Study register IS. The Study register IS is used for<br />
management of several types of information such as disciplines, degree programs, students’ cohorts,<br />
students’ study times <strong>and</strong> students’ credits. Furthermore, the system is used to produce many<br />
important documents <strong>and</strong> certificates such as the degree certificate, the study certificate <strong>and</strong> list of<br />
student’s credits. Finally, some official statistics are produced from this system.<br />
However, the Study register IS lacked some increasingly important features. It did not support the<br />
curricula design process <strong>and</strong> it did not provide useful tools for managing competence based curricula.<br />
Neither did the system support the yearly planning of degree programs’ teaching <strong>and</strong> course level<br />
implementation design. Allthough teachers were linked to every course; this system did not support<br />
the management of teachers’ yearly working loads. Teachers’ yearly working loads were managed in<br />
an inhouse information system, which was not integrated into any other information systems. Finally,<br />
there was not a tool for interactive planning of students’ individual study plans.<br />
The new system should provide tools <strong>and</strong> support for better management of the teaching process. It<br />
should combine curriculum, planning of degree programs’ teaching <strong>and</strong> course implementation,<br />
management of teachers’ yearly working loads <strong>and</strong> management of students’ individual study plans.<br />
The new system should be browser based <strong>and</strong> the user interface should be easy to use. The new<br />
system will be used by both students <strong>and</strong> personnel.<br />
The future situation with the new system is described in the figure 2 below. The introduction of the<br />
new system will end the lifecycle of three other information systems: the curricula database in Lotus<br />
Notes, the course implementation plans IS (Totsu) <strong>and</strong> the teachers’ yearly working load<br />
management IS (Tilipussi). The new system will be connected with following systems:<br />
LDAP: user management system in Turku University of Applied Sciences. The access priviliges<br />
will be maintained here.<br />
Financials: an information system managed by the city of Turku. Contains information of the<br />
accounts <strong>and</strong> cost pools.<br />
Salary IS: an information system managed by the city of Turku. Contains information of every<br />
employer <strong>and</strong> is the system used for salary management.<br />
Study register: the IS is described earlier, but the role will change partly. Still maintains its role for<br />
assessments <strong>and</strong> providing necessary certificates.<br />
2.2 The new project<br />
The information system project started in 2008 <strong>and</strong> the aim was to create an information system for<br />
the teaching process in the Turku University of Applied Sciences. The project was planned to finish at<br />
the end of 2009. At the beginning requirements were prioritized <strong>and</strong> three main phases could be<br />
identified based on the information system’s desired functions:<br />
Curriculum <strong>and</strong> teaching<br />
Working load management <strong>and</strong> salary information<br />
Students’ personal study plans <strong>and</strong> connections to study register.<br />
281
Financials<br />
Salary IS<br />
Up‐to‐date information of<br />
accounts <strong>and</strong> cost pools<br />
Juha Kontio<br />
Teachers’ yearly working load<br />
NEW<br />
SYSTEM<br />
Figure 2: The future with the new information syste m<br />
Access priviligies<br />
LDAP<br />
User <strong>Management</strong><br />
Study register<br />
‐ Students<br />
‐ Teachers<br />
‐ Assessments<br />
Course information,<br />
implementations, assessment ,...<br />
The original project schedule is presented in Figure 3. Every phase<br />
also had a goal for the start of<br />
operational usage. Both the schedule <strong>and</strong> the estimates for the beginning of the operational use were<br />
created with the best knowledge available at the time the project was started.<br />
Figure 3: Project plan<br />
The three phases were further divided into smaller subphases as shown in the Table 1.<br />
Table 1: Project phases<br />
Phase Subphases Functions<br />
Phase I:<br />
Startup<br />
Curriculum structure<br />
Curriculum <strong>and</strong> Requirement analysis<br />
C urriculum description<br />
teaching<br />
Setup of the pilot<br />
Competence matrix<br />
environment<br />
Yearly teaching plan<br />
Piloting<br />
Course implementation plan<br />
Tailoring<br />
D ata conversion from old system<br />
Conve rsion of old data<br />
LPAD-connections<br />
Approval<br />
Installation<br />
Operational use<br />
Connections to Study Register<br />
IS<br />
Phase II: Requirement analysis<br />
Tailoring of the teacher’s working load management<br />
W orking load<br />
Design<br />
features<br />
m anagement <strong>and</strong> Implemen tation <strong>and</strong> tailoring<br />
Process definitions<br />
salary information<br />
Testing<br />
Connections to Salary IS <strong>and</strong> Financials<br />
IS<br />
282
Juha Kontio<br />
Phase<br />
In stallation<br />
Operational use<br />
Subphases Functions<br />
Phase III:<br />
Piloting<br />
Structure/format of students’ individual<br />
study plan<br />
Students’<br />
Analysis<br />
Process definitions<br />
individual study<br />
Desing<br />
Data transfer to/from Study Register<br />
IS<br />
plans <strong>and</strong><br />
Tailoring<br />
connections to<br />
Testing<br />
study register.<br />
Installation<br />
Operational use<br />
3. Research<br />
3.1 Design <strong>and</strong> methods<br />
Methodologically this research is a single case study research. This approach is viable research<br />
methodology in IS-research for several reasons. First, the researcher can study information systems<br />
in a natural setting, learn about the real-life situation, <strong>and</strong> generate theories from practice (Benbasat<br />
et al., 1987, Cavaye, 1996). Second, case methods allow the researcher to underst<strong>and</strong> the nature<br />
<strong>and</strong> complexity of the processes taking place (Benbasat et al., 1987).<br />
This<br />
research aims at describing the reasons of a project falling behind its’ schedule in the Turku<br />
University of Applied Sciences. The research question is "What reasons can be identified for the delay<br />
of an information system project?”<br />
In a typical case study research multiple data collection methods are used (Benbasat et al., 1987).<br />
This involves combining different techniques such as observation <strong>and</strong> document <strong>and</strong> text analysis<br />
(Broadbent et al., 1998). Participant-observation was the main data collection method in this research.<br />
It means that the researcher may have a variety of roles within the case study situation <strong>and</strong> really<br />
participate in the events being studied (Yin, 1994). In this research, the roles of the researcher<br />
included a) chair of the project steering group b) member of the executive board of the University, <strong>and</strong><br />
c) the member of the staff. The participant-observation has happened from the beginning of the<br />
project to the end of March 2011. The different roles of the researcher provided different viewpoints to<br />
the underst<strong>and</strong>ing <strong>and</strong> also guiding the project. As a chair of the project steering group the researcher<br />
participated in making project related decisions. As a member of the executive board of the University<br />
the researcher participated decisions relating the information systems in the University <strong>and</strong> thus also<br />
this new information system. Finally, as a member of the staff the researcher used the information<br />
systems similarly as other staff member <strong>and</strong> collected data about the project. These three roles<br />
correspond quite well with the three levels where an information system success could be measured<br />
(Fowler <strong>and</strong> Horan, 2007): organizational, b) process level <strong>and</strong> c) individual level. Besides the<br />
participant-observation data was also gathered from existing documents which included system<br />
documentation, project group memos, steering group memos <strong>and</strong> presentations of the new<br />
information system.<br />
3.2 The case organization<br />
The Turku University of Applied Sciences<br />
(TUAS) is one of the largest of its kind in Finl<strong>and</strong>. The<br />
University is administered by the City of Turku, which means that University has to use some of the<br />
information systems provided by the City. Examples of these systems are the Financials <strong>and</strong> Salary<br />
IS (see figure 2).<br />
The TUAS has almost 9000 students <strong>and</strong> we educate Bachelors <strong>and</strong> Masters in about 50 different<br />
Degree Programs.The TUAS is organized in six faculties that promote multidisciplinary learning<br />
(Figure 4). Each faculty has several degree programs <strong>and</strong> students from 700 to 2500. The faculties<br />
differ from each by the preparedness of ICT technology – others are reluctant with new technology<br />
while others look new technology with too much expertise <strong>and</strong> might be extra critical. The broad<br />
variety of Degree Programs create challenges for the teaching process – finding solutions suitable for<br />
both small <strong>and</strong> big programs require a lot of planning <strong>and</strong> design.<br />
283
Turku University of Applied Sciences<br />
City<br />
Council<br />
City Board<br />
Organisation Chart<br />
1.1.2011<br />
TUAS<br />
Delegation<br />
TUAS<br />
Board<br />
Rector<br />
Vice<br />
Rectors<br />
Executive<br />
Board<br />
Figure 4: Organisation chart of TUAS<br />
4. Results<br />
Juha Kontio<br />
Development <strong>and</strong><br />
Administration<br />
• Administrative Services<br />
- General administration<br />
- Financial administration<br />
-Communications<br />
- Quality <strong>and</strong> evaluation<br />
- Facilities <strong>and</strong> other<br />
support services<br />
• Educational Services<br />
- Student counselling<br />
services<br />
- International relations<br />
- Centralised<br />
educational services<br />
- Open University of<br />
Applied Sciences<br />
- Library<br />
- Language Centre<br />
• Innovation Services<br />
- Co-ordination unit for<br />
continued education<br />
- Research <strong>and</strong><br />
Development Centre<br />
- Regional Development<br />
-Personnel Services<br />
-IT-services<br />
Arts Academy<br />
Turku: • Film <strong>and</strong> Media • Fine Arts • Journalism • Music<br />
• Performing Arts<br />
Health Care<br />
Turku: • Advanced Nursing Practice (Master’s Degree)<br />
• Biomedical Laboratory Science • Dental Hygiene<br />
• Emergency Care<br />
• Health Promotion (Master’s Degree)<br />
• Nursing • Radiography <strong>and</strong> Radiotherapy<br />
• <strong>Management</strong> <strong>and</strong> Leadership in Health Care<br />
(Master’s Degree)<br />
Salo: • Nursing (in Finnish <strong>and</strong> in English)<br />
Life Sciences <strong>and</strong> Business<br />
Turku: • Biotechnology <strong>and</strong> Food Technology • Business<br />
• Business <strong>Information</strong> Systems (Master’s Degree)<br />
• Business <strong>Information</strong> Technology<br />
• Entrepreneurship <strong>and</strong> Business (Master’s Degree)<br />
• International Business (in English)<br />
Technology, Environment <strong>and</strong> Business<br />
Turku: • Automotive <strong>and</strong> Transportation Engineering<br />
• Civil Engineering • Construction (Master’s Degree)<br />
• Construction <strong>Management</strong><br />
• Design • Environmental Technology (Master’s Degree)<br />
• Fisheries <strong>and</strong> Environmental Care<br />
• Industrial <strong>Management</strong><br />
• Mechanical <strong>and</strong> Production Engineering • Professional Sales<br />
• Sustainable Development<br />
Uusikaupunki: • Business Logistics<br />
Telecommunication <strong>and</strong> e-Business<br />
Turku: • Electronics • Library <strong>and</strong> <strong>Information</strong> Services<br />
• Library <strong>and</strong> <strong>Information</strong> Services (Master’s Degree)<br />
• <strong>Information</strong> Technology (in Finnish <strong>and</strong> in English)<br />
• Technology Competence Leadership (Master’s Degree)<br />
Salo: • Business • Business <strong>Information</strong> Technology<br />
• <strong>Information</strong> Technology<br />
Well-being Services<br />
Turku: • Beauty Care • Hospitality <strong>Management</strong><br />
• Hospitality <strong>Management</strong> (Master’s Degree)<br />
• Occupational Therapy • Physiotherapy<br />
• Rehabilitation (Master’s Degree)<br />
• Social Services • Social Services (Master’s Degree)<br />
Loimaa: • Business • Business <strong>Information</strong> Technology • Social Services<br />
Salo: • Social Services<br />
The project started quite well <strong>and</strong> first features were piloted <strong>and</strong> tested in the winter of 2008. The<br />
definition <strong>and</strong> piloting phase showed that the information system is quite easily tailored to our needs.<br />
First parts of the information system were taken in operational use in the spring 2009. At the<br />
beginning, the curriculum management <strong>and</strong> yearly planning of degree programs’ teaching features<br />
were implemented. However, the more users were envolved with the system the more challenges<br />
were recognized. Especially the specific needs of our organization <strong>and</strong> processes required more work<br />
than was initially estimated. These features did not hinder the use of the system, but we needed to be<br />
aware of these shortages.<br />
Figure 5 shows the real project schedule which differ substantially from the original project plan<br />
shown in Figure 3. The exceeding of the project’s original timing has many reasons. The reasons are<br />
listed in table 2 with short descriptions.<br />
Figure 5: True project timing<br />
284
Table 2: Identified reason of the project to be late<br />
Juha Kontio<br />
Reason Description<br />
Our process complexity The information system provided mostly right features, but the internal logic of<br />
the IS was not correspondent to our processes after all.<br />
Required amount of system<br />
tailoring<br />
A lot of modifications were needed to the user interface of the system –<br />
concepts <strong>and</strong> term used had to be changed to increase the underst<strong>and</strong>ability<br />
of the system <strong>and</strong> to connect the user experience with the process description<br />
<strong>and</strong> definitions.<br />
Too positive project plan The first experiences of the system suggested an efficient <strong>and</strong> straightforward<br />
project. Therefore the project plan was designed <strong>and</strong> the schedules were set<br />
too positively <strong>and</strong> too optimistically.<br />
Deficiencies in the IS The experiences of the information system during the two <strong>and</strong> a half years<br />
have given the impression that the system has been built quickly <strong>and</strong> flexibility<br />
has not been a major issue.<br />
Piloting poorly resourced In each project phases a piloting group of 10 to 15 people were nominated<br />
from the faculties <strong>and</strong> administration. However, the piloting group was not<br />
given proper resources to actually focus on the piloting in none of the phases.<br />
The piloting was supposed to happen on the side of the normal daily tasks <strong>and</strong><br />
routines.<br />
Goals of piloting unclearly<br />
stated<br />
The piloting goals were not defined clearly. The piloter were not fully aware<br />
what they were expected to do <strong>and</strong> report. This caused that the time <strong>and</strong> effort<br />
put on piloting was not at satisfied level throughout the pilot group. As a result,<br />
the piloting did not give reliable answers for the next steps of the project. The<br />
lack of true piloting resources caused phases II <strong>and</strong> III to happen in two parts –<br />
the next steps were postponed in order to wait better resources.<br />
Quality of test plans During the project test plans were not throughly designed rather testing was<br />
mostly ad-hoc testing. In addition, test reports were not properly produced.<br />
This resulted that certain functionalities were poorly tested.<br />
Not enough time to test Testing was also performed on the side of the normal work which lowered the<br />
quality of testing. Since the project schedule was quite tight <strong>and</strong> time for<br />
testing was short, decisions concerning the project were sometimes made in a<br />
hurry.<br />
Problems with data<br />
conversions<br />
Connections to information<br />
systems provided by the city<br />
Data conversion <strong>and</strong> transfer from old systems to the new system turned out<br />
be problematic. The main reason for these problems was the poor quality of<br />
the data – there were inconsistencies, integrity errors <strong>and</strong> missing data. These<br />
generated problems in setting up the new system <strong>and</strong> slowed down the<br />
adoption of the system.<br />
The new information system was planned to be integrated with information<br />
systems run by the City of Turku. The connections were mostly designed <strong>and</strong><br />
programming had begun when the City announced that the main financials<br />
system will be replaced with a new one (SAP). This delayed the<br />
implementation because the new financials system was totally different <strong>and</strong><br />
this required new design <strong>and</strong> programming as well. The main difference was<br />
moving from one level accounts to two level accounts.<br />
Limited IS Budget The information system was bought after the competitive bidding <strong>and</strong> at the<br />
same time an agreement was made that a certain amount of maintenance<br />
work is allowed. The phase II was started in the winter of 2008, but in May<br />
2009 the phase was stopped <strong>and</strong> postponed. The reason this strong action<br />
was that the tailoring <strong>and</strong> correction works in the phase I required so much<br />
more work than the budget for 2009 allowed.<br />
Lack of resources: the IS<br />
provider<br />
The IS provider had other implementation project going on simultaneously with<br />
our project. Unfortunately they lacked enough resources/manpower to promote<br />
two projects parallel rather the other one would have to wait another.<br />
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5. Discussion<br />
Juha Kontio<br />
This case study research identified several reasons why our IS project is late. According to the failure<br />
categories by Lyytinen <strong>and</strong> Hirscheim (1987) this case study presents a typical example of an<br />
information system process failure. <strong>Information</strong> system process failure happens when a workable IS is<br />
developed but the timetable is overrun. An important question at this point is – what could we have<br />
done to avoid these problems? As Gaud (2007) proposed organizations should address certain<br />
questions to avoid project failures. Our organization followed part of their recommendations. For<br />
example, the key persons were envolved to the project. The benefits of the new IS were<br />
communicated to the management board, but less with other staff members <strong>and</strong> end-users. In<br />
addition, we should have analysed the risks of the project more carefully. The three effective practices<br />
(Thomas <strong>and</strong> Fern<strong>and</strong>ez, 2008) could have helped us too. Our organization has not a definition for<br />
successful IS project <strong>and</strong> we are not measuring project successes consistently.<br />
Looking back to the project, there are a number of reasons that are out of reach, but also many<br />
reasons that we should have managed better. Our study showed reasons that are management<br />
related issues such as too positive project plan, piloting poorly resourced, not enough time to test <strong>and</strong><br />
limited IS budget.<br />
In addition to management related reasons, we can identify a reason category for integration:<br />
problems with data conversions <strong>and</strong> connections to information systems provided by the city. The<br />
later one is also a good example of rapid changes in the project conditions that affect the<br />
implementation significantly. In this case, the old financials IS of the City of Turku was replaced with a<br />
new IS.<br />
Our project succeeded partly on the five most cited success factors of projects (Fortune <strong>and</strong> White,<br />
2006). The project had the support from the senior management, but the project should have<br />
communicated better with the management, staff <strong>and</strong> end-users to maintain the positive momentum.<br />
The project objectives were realistically set, but the project timing was too optimistically set. We<br />
involved users to test <strong>and</strong> pilot the information system, but we could have used much bigger number<br />
of testers <strong>and</strong> piloters.<br />
When comparing our results with the DeLoan <strong>and</strong> Mclean IS success model, we see that many<br />
reasons to the process failure have connections to the factors in their model as well:<br />
<strong>Information</strong> quality – The problems with data conversions<br />
System quality – Deficiencies in the IS; Required amount of system tailoring<br />
Service quality – Lack of resources: the IS provider<br />
Intention to use – Piloting badly resourced, not enough time to test.<br />
As the above connections list show there are lot of evidence also from the viewpoint of this model that<br />
the project has not been a success story.<br />
The project delay has also influenced the life cycles of other information systems. The original idea<br />
was that this new system would replace old systems <strong>and</strong> provide one system for doing many things.<br />
However, the delays have given extra lifetime to the Course implementation plan IS <strong>and</strong> to the<br />
Teacher’s yearly working load management IS. This has caused additional costs in licencies, because<br />
the environment of the old system needed to be continued.<br />
An important question is how we could have done better? Could we have avoided the most regular<br />
risk factors of the IS projects? The major issue is the management of the project, which is also the<br />
first risk factor listed by Fowler <strong>and</strong> Horan (2007). We should have created a very strong project<br />
management with enough power to decide for example the resources to be used in testing <strong>and</strong><br />
piloting. This would have improved the user involvement as well (2 nd most cited risk factor)! The<br />
project had a steering group <strong>and</strong> almost full-time project manager, but the management did not have<br />
any possibilities to order how different faculties should do – the management could only express<br />
strong recommendations. In addition, we should have put more effort on testing. Proper test plans<br />
should have been made rather that just listing interesting cases <strong>and</strong> testing them.<br />
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Juha Kontio<br />
There are also reasons that we could not solve at this point. For example, the poor quality of data in<br />
the information systems to be integrated is not simple question. Actually, it is a question of culture <strong>and</strong><br />
underst<strong>and</strong>ing the importance of providing high quality data into the information systems. When the<br />
single points of data entries are seriously managed the overall quality of data will be good.<br />
6. Conclusions<br />
Despite the fact that we can categorize this project as a process failure, the information system is in<br />
operational use <strong>and</strong> it serves the purpose it was mentioned to. Unfortunatelly the project has been a<br />
hard experience because of the disappointments caused by the delay. Many important <strong>and</strong> waited<br />
features have been postponed which has been challenging for the University. However, we are<br />
confident that the future information system will eventually provide all the features that were written in<br />
the requirements at the beginning of the project.<br />
For other people, our case study has shown <strong>and</strong> confirmed that project management has a vital role<br />
in information system projects. Furthermore, the success <strong>and</strong> risk factors lists contain relavant<br />
information to famialize with for a positive project.<br />
References<br />
Benbasat, I., Goldstein, D. K. & Mead, M. 1987. The Case Research Strategy in Studies of <strong>Information</strong> Systems.<br />
MIS Quarterly, 11, 369 - 386.<br />
Broadbent, M., Darke, P. & Shanks, G. 1998. Successfully completing case study research: combining rigour,<br />
relevance <strong>and</strong> pragmatism. <strong>Information</strong> Systems Journal, 8, 273 - 289.<br />
Brown, A. & Jones, M. 1998. Doomed to failure: Narratives of inevitability <strong>and</strong> conspiracy in a failed IS project.<br />
Oraganizational Studies, 19, 73-89.<br />
Cavaye, A. L. M. 1996. Case Study Research: a multi-faceted research approach for IS. <strong>Information</strong> Systems<br />
Journal, 6, 227 - 242.<br />
Delone, W. H. & Mclean, E. R. 1992. <strong>Information</strong> Systems Success: The Quest for the Dependent Variable.<br />
<strong>Information</strong> Systems Research, 3, 60 - 95.<br />
Delone, W. H. & Mclean, E. R. 2003. The DeLone <strong>and</strong> McLean model of information systems success: A ten-year<br />
update. Journal Of <strong>Management</strong> <strong>Information</strong> Systems, 19, 9 - 30.<br />
Fortune, J. & White, D. 2006. Framing of project critical success factors by a system model. International Journal<br />
of Project <strong>Management</strong>, 24, 53 - 65.<br />
Fowler, J. J. & Horan, P. 2007. Are <strong>Information</strong> Systems' Success <strong>and</strong> Failure Factors Related? An Exploratory<br />
Study. Journal of Organizational & End User Computing, 19, 1-22.<br />
Gauld, R. 2007. Public sector information system project failures: Lessons from a New Zeal<strong>and</strong> hospital<br />
organization. Government <strong>Information</strong> Quarterly, 24, 102-114.<br />
Lyytinen, K. & Hirschheim, R. 1987. <strong>Information</strong> system failures - a survey <strong>and</strong> classification of the empirical<br />
literature. Oxford Surveys in <strong>Information</strong> Technology, 4, 257-309.<br />
Pan, G., Hackney, R. & Pan, S. L. 2008. <strong>Information</strong> Systems implementation failure: Insights from prism.<br />
International Journal of <strong>Information</strong> <strong>Management</strong>, 28, 259-269.<br />
Thomas, G. & Fern<strong>and</strong>ez, W. 2008. Success in IT projects: A matter of definition? International Journal of Project<br />
<strong>Management</strong>, 26, 733 - 742.<br />
Yin, R. K. 1994. Case Study Research - Design <strong>and</strong> Methods, Thous<strong>and</strong> Oaks, SAGE Publications, Inc.<br />
287
Research on Performance Review Model for National<br />
Database Project<br />
Misoo Kwon<br />
National <strong>Information</strong> Society Agency, Seoul, Korea<br />
kwonms@nia.or.kr<br />
Abstract: The Korean government launched the National Database Project (NDP) in the late 1990s in order to<br />
preserve, utilize <strong>and</strong> share resources <strong>and</strong> information that are of major importance. It made a total of 773 billionwon<br />
investment from 1999 to 2010 <strong>and</strong> established databases incorporating 300 million pieces of information in<br />
139 categories. The NDP has not only satisfied the citizens’ right to know through distribution <strong>and</strong> utilization of<br />
the database but also exp<strong>and</strong>ed information infrastructure which further created social/economic values through<br />
new businesses <strong>and</strong> market environment. The performance review model presented in this paper is developed<br />
based on NDP <strong>and</strong> the result of 2010 performance review on 2009 NDP is also briefly introduced. Performance<br />
review categories for NDP include business performance <strong>and</strong> economic impact. Business performance can be<br />
then broken down into four sub-categories - user satisfaction, system utilization, system performance <strong>and</strong> data<br />
assurance. User satisfaction is for reviewing whether the provided data are useful <strong>and</strong> measures accuracy,<br />
usability <strong>and</strong> fidelity of information. System utilization is for reviewing how the provided data are used in business<br />
<strong>and</strong> measures frequency of use <strong>and</strong> level of convenience. System performance is for reviewing whether the<br />
stored data can be provided easily <strong>and</strong> immediately at the time of need <strong>and</strong> measures system processing speed.<br />
Data assurance is for reviewing whether the stored data are effective <strong>and</strong> reliable for business <strong>and</strong> measures<br />
data integrity, accuracy <strong>and</strong> consistency. Economic impact measures return on investment (ROI) which converts<br />
the cost of saved time into the current value. In 2010, the performance review was carried out on 50 databases<br />
that were established in 2009 mainly in terms of business performance <strong>and</strong> economic impact. Tools that were<br />
used for review were a survey questionnaire, checklist <strong>and</strong> survey tool for each performance review category.<br />
From users, user satisfaction <strong>and</strong> convenience were the two categories surveyed through face-to-face interviews<br />
<strong>and</strong> online surveys (on a five-point scale). From system managers, system performance, utilization rate <strong>and</strong> timesaving<br />
were surveyed <strong>using</strong> a survey checklist. As for reviewing data assurance, a survey tool was used. The<br />
business performance score for NDP in 2010 was 84.6 by earning 77.3 points for user satisfaction, 79.2 points<br />
for utilization <strong>and</strong> 99.8 points for data assurance. Analyzing the amount of time saved as the current value<br />
against the project budget invested into NDP each year indicates that the cost-saving impact against investment<br />
was 245.0% in 2008 <strong>and</strong> 306.9% in 2009 with a sign of increasing number of usage, amount of time saved <strong>and</strong><br />
ROI from the previous year.<br />
Keywords: Korean database project, database performance review, data assurance, system utilization, user<br />
satisfaction, ROI<br />
1. Background of National Database Project <strong>and</strong> performance review<br />
In line with the efforts to computerize administrative affairs of public organizations in the 1980s, the<br />
Korean government launched the National Database Project (NDP) in the late 1990s in order to<br />
preserve, utilize <strong>and</strong> share resources <strong>and</strong> information that are of major importance. It made a total of<br />
773 billion-won investment from 1999 to 2010 <strong>and</strong> established databases incorporating 300 million<br />
pieces of information in 139 categories. The NDP has not only satisfied the citizens’ right to know<br />
through distribution <strong>and</strong> utilization of the database but also exp<strong>and</strong>ed information infrastructure which<br />
further created social/economic values through new businesses <strong>and</strong> market environment.<br />
The NDP, as introduced in this paper, is a project carried out by the Korean Ministry of Public<br />
Administration <strong>and</strong> Security (MOPAS) with a budget allocated from the Ministry of Strategy <strong>and</strong><br />
Finance (KRW 25.1 billion in 2011) in order to select references that are considered highly important<br />
to be preserved <strong>and</strong> utilized at the national level <strong>and</strong> information that must be shared among different<br />
government bodies <strong>and</strong> incorporate them into a database. National <strong>Information</strong> Society Agency is<br />
supporting project selection <strong>and</strong> management as a specialized institution for the project. Performance<br />
review of the project helps decision making process regarding the sustainability of the project by<br />
assessing the achievement <strong>and</strong> evaluating the usability <strong>and</strong> accuracy of the database. In particular,<br />
the references to be brought onto the database have a wide range of raw data <strong>and</strong> it usually takes<br />
three to five years to collect such data year by year. Therefore, project performance review every year<br />
enforces a strong feedback system under which projects with the least performance are delayed for<br />
the next year.<br />
The performance review model presented in this paper is developed based on NDP <strong>and</strong> the result of<br />
2010 performance review on 2009 NDP is also briefly introduced.<br />
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2. Performance review model for NDP<br />
2.1 Measuring performance<br />
Misoo Kwon<br />
The performance review model for NDP is a systemized model that reviews the performance of NDP<br />
in an efficient way based on theoretical <strong>and</strong> practical cases of precedent studies regarding information<br />
<strong>and</strong> technology performance measurement. This is because the NDP deals with of heterogeneous<br />
<strong>and</strong> multiple databases that consist of enormous amount of information <strong>and</strong> a wide range of data<br />
services. Performance review categories for NDP include business performance <strong>and</strong> economic<br />
impact. Business performance can be then broken down into four sub-categories - user satisfaction,<br />
system utilization, system performance <strong>and</strong> data assurance.<br />
User satisfaction is for reviewing whether the provided data are useful <strong>and</strong> measures accuracy,<br />
usability <strong>and</strong> fidelity of information.<br />
System utilization is for reviewing how the provided data are used in business <strong>and</strong> measures<br />
frequency of use <strong>and</strong> level of convenience.<br />
System performance is for reviewing whether the stored data can be provided easily <strong>and</strong><br />
immediately at the time of need <strong>and</strong> measures system processing speed.<br />
Data assurance is for reviewing whether the stored data are effective <strong>and</strong> reliable for business<br />
<strong>and</strong> measures data integrity, accuracy <strong>and</strong> consistency.<br />
Economic impact measures return on investment (ROI) which converts the cost of saved time into<br />
the current value.<br />
2.2 Performance review indicators<br />
Main principles for developing performance review indicators for NDP are integration, objectivity,<br />
integrity <strong>and</strong> visibility. Integration means that the indicator must be a st<strong>and</strong>ardized one that can be<br />
applied commonly to many databases serving different goals. Objectivity means that it must be<br />
objective for universal validity against diverse databases. Integrity means that the indicator must allow<br />
review of the entire project goals <strong>and</strong> visibility means that it must be clear enough to show the result<br />
of performance review.<br />
The performance review indicators developed from the above principles are introduced by each<br />
category as in Table 1 below:<br />
Table 1: Performance review indicators<br />
Category Sub-category Review indicator<br />
<strong>Information</strong> usability<br />
User satisfaction<br />
<strong>Information</strong> accuracy<br />
<strong>Information</strong> fidelity<br />
Utilization convenience<br />
System utilization<br />
Utilization rate<br />
Business performance<br />
Utilization efficiency<br />
System performance<br />
System management status<br />
System processing speed<br />
Data integrity<br />
Data assurance<br />
Data accuracy<br />
Data consistency<br />
Economic impact Return on investment (ROI)<br />
Each review indicator for measuring business performance has significance in following terms:<br />
<strong>Information</strong> usability: This indicator is for reviewing whether the data in the database can be<br />
usefully applied to business <strong>and</strong> measures usability of the established database, upgrade level of<br />
business or knowledge <strong>and</strong> distinction of information.<br />
<strong>Information</strong> accuracy: This indicator is for reviewing whether there is no error in the contents of<br />
the database <strong>and</strong> measures reliability of search result, conformity of information as dem<strong>and</strong>ed,<br />
<strong>and</strong> contents error occurrence.<br />
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Misoo Kwon<br />
<strong>Information</strong> fidelity: This indicator is for reviewing whether the data can satisfy user requirements<br />
<strong>and</strong> measures quantitative sufficiency of information, diversity of information <strong>and</strong> substitutability<br />
for existing resources.<br />
Utilization convenience: This indicator reviews whether a user can easily use wanted data <strong>and</strong><br />
measures convenience of database use <strong>and</strong> search speed.<br />
Utilization rate: This indicator reviews the performance of database use such as the number of<br />
visits, searches <strong>and</strong> downloads.<br />
Utilization efficiency:This indicator is for reviewing whether the provided data increased business<br />
efficiency of user in terms of the amount of time saved.<br />
System management status: This indicator is for reviewing whether the database system is<br />
maintaining its optimized operation level. In particular, it reviews whether database management<br />
system monitoring is performed <strong>and</strong> checks the number of times that data were tuned.<br />
System processing speed: This indicator reviews whether the response time <strong>and</strong> throughput<br />
satisfy transaction requirements of each business process. In detail, it reviews the average<br />
response time of database <strong>and</strong> throughput.<br />
Data integrity: This indicator reviews if there are any data missing from required processes for<br />
business support. Specifically, it reviews the ratio of business <strong>and</strong> logical null values.<br />
Data accuracy: This indicator reviews whether the patterns <strong>and</strong> codes of data in the database are<br />
accurate. Specifically, it measures the ratio of data threshold compliance, ratio of pattern<br />
accuracy <strong>and</strong> ratio of code accuracy.<br />
Data consistency: This indicator reviews whether there is any inconsistency between the same<br />
data within the database.<br />
2.3 Performance review time <strong>and</strong> reviewer<br />
Performance review of NDP is one that is carried out during the second half of every year on the<br />
project result of the previous year. The reason for reviewing the performance afterwards is to<br />
measure the outcomes <strong>and</strong> impact of investment, find any problems in project operationas well as<br />
ways to improve them, <strong>and</strong> further improve performance.<br />
Performance review is carried out by selected survey agencies under the management of National<br />
<strong>Information</strong> Society Agency, which is the main organization supporting the project. The result of<br />
performance review is reported to the Ministry of Public Administration <strong>and</strong> Security <strong>and</strong> is used for<br />
selecting the next year NDP.<br />
3. Result of performance review in 2010<br />
3.1 Overview<br />
In 2010, the performance review was carried out on 50 databases that were established in 2009<br />
mainly in terms of business performance (user satisfaction, system utilization, system performance<br />
<strong>and</strong> data assurance) <strong>and</strong> economic impact.<br />
The review target was database users, system managers operating <strong>and</strong> managing developed<br />
databases, while the target for data assurance review was the entire databases developed during<br />
2009. Database users included internal users who use the developed database for business<br />
processes within their organization, relevant users who utilize the database from outside <strong>and</strong> the<br />
general citizens.<br />
Tools that were used for review were a survey questionnaire, checklist <strong>and</strong> survey tool for each<br />
performance review category as described above <strong>and</strong> face-to-face interview <strong>and</strong> online survey were<br />
the methods of review. From users, user satisfaction <strong>and</strong> convenience were the two categories<br />
surveyed through face-to-face interviews <strong>and</strong> online surveys (on a five-point scale). From system<br />
managers, system performance, utilization rate <strong>and</strong> time-saving were surveyed <strong>using</strong> a survey<br />
checklist. As for reviewing data assurance, a survey tool was used.<br />
Reviewing data assurance is to inspect any error in data values of the database. During the process,<br />
an automation tool is used based on st<strong>and</strong>ard information <strong>and</strong> business codes as defined in columns.<br />
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Misoo Kwon<br />
Among the review indicators introduced above, system management status <strong>and</strong> system processing<br />
speed are reviewed as reference for underst<strong>and</strong>ing the current status only <strong>and</strong> not reflected in the<br />
result of the performance review.<br />
For continued projects, project budget <strong>and</strong> saved cost are converted into the current (2010) value.<br />
Amount of cost-saving was calculated only for the use of databases that were established with the<br />
NDP budget.<br />
3.2 Performance analysis method<br />
Based on the performance review model for NDP, business performance score was calculated by<br />
taking into consideration user satisfaction as 40%, utilization as 30% <strong>and</strong> data assurance as 30%. All<br />
weights applied afterwards were set according to the survey result from project stakeholders, which<br />
was carried out <strong>using</strong> the Delphi method.<br />
Business performance score = (user satisfaction x 0.4) + (utilization x 0.3) + (data assurance x<br />
0.3)<br />
3.2.1 Measuring user satisfaction score<br />
User satisfaction score was measured after obtaining answers to questions regarding the usability,<br />
accuracy <strong>and</strong> fidelity of information on a five-point scale <strong>and</strong> converting it to a score out of 100 (very<br />
satisfactory 100; satisfactory 75; moderate 50; unsatisfactory 25; very unsatisfactory 1)<br />
3.2.2 Measuring utilization score<br />
Utilization score incorporated the user survey result on how convenient it is to use information in the<br />
database as 40%, how many times each database was used per year as 30% <strong>and</strong> how much time<br />
was saved after having the database established as 30%. The score was then converted onto a 100point<br />
scale.<br />
Utilization = (utilization convenience x 0.4) + (utilization rate x 0.3) + (amount of time saved x 0.3)<br />
Utilization convenience score was calculated <strong>using</strong> the same method as the user satisfaction score<br />
<strong>and</strong> was also converted into the score on a 100-point base.<br />
Utilization rate score was measured through normal distribution of the number of data processing<br />
cases by each organization according to the survey checklist <strong>and</strong> was taken into relative evaluation<br />
on a 100-point scale.<br />
Utilization score = {ln(k) / ln(A)} × 100<br />
ln(k) = log conversion value of number of data processing cases<br />
ln(A) = log conversion value of project with the largest number of data processing cases<br />
Utilization efficiency score was measured through normal distribution of the amount of time saved<br />
after database establishment <strong>and</strong> was taken into relative evaluation with the full score being 100.<br />
Utilization efficiency score = {ln(t) / ln(B)} × 100<br />
ln(t) = log conversion value of amount of time saved<br />
ln(B) = log conversion value of project with the largest amount of time saved<br />
The amount of time saved was measured by taking the amount of saved time given by survey<br />
respondents <strong>and</strong> surveyor in a ratio of 5 to 5.<br />
3.2.3 Measuring data assurance score<br />
For checking errors in data values, the review was focused on assessing data integrity, accuracy <strong>and</strong><br />
consistency. Data integrity was reviewed through checking the physical or business null values to see<br />
‘if there is a null value’. Data accuracy was reviewed through finding out the ‘accuracy of data<br />
threshold’ which checks the effective range of data;‘accuracy of data type’ which checks the type,<br />
pattern <strong>and</strong> date type compliance; <strong>and</strong> ‘accuracy of st<strong>and</strong>ard codes’ which checks code compliance.<br />
Consistency review was focused on checking ‘data consistency’ which also finds out referential<br />
integrity or exclusiveness of ID data.<br />
291
3.3 Analyzing economic impact of NDP<br />
Misoo Kwon<br />
ROI of the project was measured by first finding out the cost saved through database with the number<br />
of usage, average amount of time saved <strong>and</strong> existing labor cost <strong>and</strong> then dividing the cost value by<br />
project budget. Then the ROI value was converted into a percentage.<br />
ROI = (cost saved through national database / project budget) x 100<br />
Cost saved through NDP = number of usage per year * cost saved per each usage (amount of<br />
time saved * labor cost per hour)<br />
Labor cost per hour reflects the characteristics of each type of database users by applying<br />
government employee salary if business managers within organizations are the main users <strong>and</strong> the<br />
average pay of the entire industry if the most of the users are general citizens <strong>and</strong> users from outer<br />
organizations.<br />
3.4 Analyzing survey result<br />
3.4.1 Business performance<br />
The business performance score for NDP in 2010 was 84.6 by earning 77.3 points for user<br />
satisfaction, 79.2 points for utilization <strong>and</strong> 99.8 points for data assurance. This is an overall increase<br />
from the previous year – business performance score increased by 1.6 points (from 83.0 points in<br />
2009), user satisfaction by 1.3 points, utilization by 2.5 points <strong>and</strong> data assurance by 0.9 points. The<br />
increase in user satisfaction score was mainly due to the significant improvement in ‘usability’ <strong>and</strong><br />
‘accuracy’ of information while the main driver for increase in utilization score was the overall<br />
improvement of ‘utilization convenience’.<br />
The average score for the entire data assurance was significantly high at 99.8 points. The error rate<br />
for each assurance category shows that lack of compliance to the basic requirement of database<br />
design such as ‘data integrity’ <strong>and</strong> ‘data accuracy’, or lack of control in the stage of input was likely to<br />
cause more errors. There were also many cases showing inconsistency of the actual structure of the<br />
established database with the submitted output of database design, leading to the analysis result that<br />
there need to be some measures to improve the quality of national database schema information.<br />
Table 2: 2009 vs 2010 business performance comparison<br />
Business performance User satisfaction Utilization Data assurance<br />
2009 2010 2009 2010 2009 2010 2009 2010<br />
83.0 84.6 76.0 77.3 76.7 79.2 98.9 99.8<br />
3.4.2 Economic impact<br />
The average amount of time saved through databases, as reviewed in 2010, was approximately 3.3<br />
hours (compared to 1.9 hours in 2009). The amount of time saved for project managers was provided<br />
by the managers in the project managing organization, whereas the amount of time saved for general<br />
users was calculated by averaging the amount of time saved for internal employees, users from<br />
external organizations <strong>and</strong> the general citizens who use the developed databases. The total of<br />
average amount of time saved is an average value of the amount of time saved for project managers<br />
<strong>and</strong> general users.<br />
Table 3: 2009 vs 2010 time spent <strong>and</strong> saved<br />
Type<br />
Project managers<br />
Before database<br />
establishment<br />
After database<br />
establishment<br />
Time saved<br />
‘10 3.3 h (198.5 min) 0.2 h (13.4 min) 3.1 h<br />
‘09 1.5 h(87.8 min) 0.3 h (15.3 min) 1.2 h<br />
General Users ‘10 4.0 h(241.7 min) 0.4 h (26.6 min) 3.6 h<br />
292
Type<br />
Average time saved<br />
Misoo Kwon<br />
‘09 2.9 h(176.5 min) 0.4 h (22.5 min) 2.6 h<br />
Before database<br />
establishment<br />
After database<br />
establishment<br />
‘10 - 3.3 h<br />
‘09 - 1.9 h<br />
Time saved<br />
Analyzing the amount of time saved as the current value against the project budget invested into NDP<br />
each year indicates that the cost-saving impact against investment was 245.0% in 2008 <strong>and</strong> 306.9%<br />
in 2009 with a sign of increasing number of usage, amount of time saved <strong>and</strong> ROI from the previous<br />
year. This is because the sub-projects of NDP are continued for many years <strong>and</strong> therefore the costsaving<br />
impact against investment is increasing with time.<br />
Table 4: Time saved <strong>and</strong> ROI through NDP<br />
Year<br />
Converted project<br />
budget (KRW)<br />
No. of usage<br />
per year<br />
Time saved<br />
(hour)<br />
Cost saved per<br />
usage (KRW)<br />
Total cost saved<br />
(adjusted) (KRW)<br />
2008 40,535,460,000 17,588,822 1.8 21,317 99,311,625,674 245.0<br />
2009 62,948,588,689 33,950,823 3.3 39,823 193,182,687,716 306.9<br />
References<br />
Jang, Won-Seok <strong>and</strong> Lee, Eun-Jung (2005) Public-sector Informatization: Study on Performance Evaluation<br />
Methodology for Public-sector IT Project, paper presented in the great winter symposium of the Korea<br />
Association for Public Administration, Seoul.<br />
Kim, Joon-Han (2002) Establishing IT Evaluation System in the Central Government, Newsletter of the Korea<br />
Association for Public Administration, Seoul.<br />
Lee, Kwang-Hee (2008) Government Affairs Evaluation from the Perspective of Evaluation Methodology. Seoul.<br />
Lee, Kwang-Hee <strong>and</strong> Han, Jong-Hee (2006) Policy Evaluation <strong>and</strong> Performance <strong>Management</strong>, Seoul.<br />
Mun, Tae-Soo (2002) Case Study on Development <strong>and</strong> Application of Public-sector IT Project Evaluation Method<br />
paper presented in the great autumn symposium of the Korea Association for Policy Analysis <strong>and</strong><br />
Evaluation, Seoul.<br />
Noh, Hwa-Joon <strong>and</strong> Noh, Yu-Jin (2004) Policy Evaluation System Reform for Efficient Outcome-oriented<br />
<strong>Management</strong>, Newsletter of the Korea Association for Policy Analysis <strong>and</strong> Evaluation, Vol. 14, No. 1, Seoul.<br />
Niven, P. R. <strong>and</strong> Samil PWC Consulting (2005) Government & Public-sector BSC, Sigma Insight, Seoul.<br />
Yoon, Sang-Oh (2004) Measures to Make National IT Project Evaluation Efficient, Studies on the Korean Society<br />
<strong>and</strong> Administration, Vol. 15, No. 1, Seoul<br />
293<br />
ROI<br />
(%)
Multi-Scope Evaluation of Public Administration Initiatives<br />
in Process Automation<br />
Luigi Lavazza<br />
Università degli Studi dell’Insubria, Varese, Italy<br />
luigi.lavazza@uninsubria.it<br />
Abstract: Public administrations are among the most active organizations in promoting process automation<br />
based on software systems. For evident reasons, public administrations are interested in evaluating the<br />
effectiveness of their process automation initiatives. However, when performing these evaluations, public<br />
administrations have to deal with a specific characteristic of their environment: the scope of the assessment can<br />
be more or less wide, i.e., it can extend beyond the boundaries of the public administration, to include the<br />
companies, organizations, citizens, suppliers, etc. that directly or indirectly interact with the processes. In fact, the<br />
effectiveness of a process initiative does not concern only the public administration that is promoting it, but<br />
involves all the stakeholders that, to various extents, participate in the process. Although traditional methods for<br />
measurement planning <strong>and</strong> execution – like the GQM (Goal/Question/Metrics) – can be used, evaluators have to<br />
define specific means to deal with the multiplicity of scope definitions that can be chosen in order to define the<br />
boundaries of the assessment. In this paper we illustrate the usage of the GQM to define measurement plans <strong>and</strong><br />
how to update them in order to deal with extended scopes. The proposed technique is illustrated through two<br />
case studies, taken from actual evaluations in which the author was involved. The presented evaluation approach<br />
is more effective than traditional econometric methodologies. On the one h<strong>and</strong>, it lets the evaluator choose the<br />
set of indicators that are more suitable for the purpose; on the other h<strong>and</strong> it goes beyond the traditional economic<br />
<strong>and</strong> financial indicators, extending the analysis to factors that allow a more comprehensive underst<strong>and</strong>ing of the<br />
effects of process automation.<br />
Keywords: software process measurement, process evaluation, evaluation scope, Goal/Question/Metrics (GQM)<br />
1. Introduction<br />
Public administrations (PAs) are interested in process automation because of several reasons: to<br />
increase internal efficiency; to favor citizens in accessing the services provided by the PA; to enhance<br />
or make more efficient business activities, not necessarily involving the PA (in this case the process<br />
automation services are seen as infrastructures). Whatever the type of process automation initiatives<br />
carried out by a PA, several actors <strong>and</strong> stakeholders are generally involved, because of the very<br />
nature of PAs. In fact, a PA is generally involved in providing services to the citizens, to suppliers, to<br />
companies, to other PA entities, to no-profit organizations, etc. While automating its services, the PA<br />
affects not only its internal processes, but also the ones of the citizens, suppliers <strong>and</strong> external entities<br />
that use (sometimes indirectly) these services.<br />
In general, a PA needs to evaluate the efficiency of its services. This is of course due to the fact that<br />
the provided services are paid with the citizens’ money (via taxes): the PA has to show citizens (<strong>and</strong><br />
electors) that their money is well spent. The need for evaluation is even more pressing when new<br />
initiatives are undertaken: in fact the success of the initiative has to be proved, <strong>and</strong> weak points <strong>and</strong><br />
problems have to be identified in order to be tackled <strong>and</strong> corrected. When evaluations of process<br />
automation initiatives are decided, the multiplicity of scopes emerges as a variable to be duly taken<br />
into account. In fact, by definition, an evaluation makes reference to a scope. In our case, the effects<br />
of the process automation initiatives are perceived at various levels: the PA itself, the companies <strong>and</strong><br />
citizens that directly interact with the PA, the citizens that are the targets of the final effects of the<br />
process.<br />
For instance, in a process for procuring educational material, the PA is the procurer, a company is the<br />
supplier, a set of schools are the immediate beneficiary, <strong>and</strong> the pupils are the final beneficiaries. As<br />
a consequence, the evaluation can be performed at various levels: one can take into account the<br />
effects for the PA, the effects for the company, the effects for the school, the final consequences for<br />
citizens (pupils <strong>and</strong> their families).<br />
It is quite clear that the sets of issues that are of interest for the various actors <strong>and</strong> stakeholders are<br />
disjoint. For instance, the citizen will be interested in the cost <strong>and</strong> quality of the supply, while the<br />
supplier will be interested also in the duration <strong>and</strong> the profitability of the supply process.<br />
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Luigi Lavazza<br />
In conclusion, when a PA plans an evaluation of process automation initiatives, it has to decide what<br />
the scope of the evaluation is. On the one h<strong>and</strong>, it is clear that performing the assessment embracing<br />
the whole set of scopes would provide the most complete <strong>and</strong> precise indications; on the other h<strong>and</strong>,<br />
however, the cost of the evaluation increases with the extension of the addressed scope.<br />
An instrument for planning multi-scope evaluations is thus needed. Such instrument should produce<br />
well defined plans on which it is possible to reason in order to find a good trade-off between the cost<br />
of the assessment <strong>and</strong> the representativeness of the results. In this paper a method for planning <strong>and</strong><br />
executing multi scope evaluations based on the well know Goal/Question/Metrics (GQM) technique<br />
(Basili <strong>and</strong> Weiss 1984, Basili <strong>and</strong> Rombach 1988, Basili et al. 1994) is presented. The method is<br />
illustrated by means of two cases studies, derived from real evaluation activities.<br />
2. The case studies<br />
The first case study is derived from an evaluation activity dealing with the process automation<br />
initiatives of a local administration. In this case, the automation initiatives embraced several different<br />
processes; some of the deployed software systems dealt with internal operations such as<br />
communication <strong>and</strong> recording, while others (like the invoice management <strong>and</strong> payment system <strong>and</strong><br />
the <strong>Information</strong> Technology contract management system) dealt with processes involving external<br />
entities. The deployed software systems were also different in nature: some were developed ad-hoc,<br />
while others were built as services of a common document management platform. In any case, our<br />
evaluation –as described in detail in Section 3.1– abstracted away from the specificity of the software<br />
systems, concentrating on the effects on the target processes. The multiplicity of scopes of the<br />
initiative, <strong>and</strong> consequently of the evaluation, is schematically illustrated in Figure 1 (a).<br />
The second case study is derived from an evaluation activity dealing with an initiative of a local<br />
administration aiming at establishing a common e-procurement platform to manage bids. In this case,<br />
the automation initiatives embraced processes at two levels: the management of the bid within the<br />
PA, <strong>and</strong> the actual execution of the bid, involving providers <strong>and</strong> the entities that are the beneficiaries<br />
of the goods or services being acquired through the bid. The multiplicity of scopes of the initiative, <strong>and</strong><br />
consequently of the evaluation, is schematically illustrated in Figure 1 (b).<br />
External actors<br />
Local administration<br />
Administration<br />
processes<br />
Companies<br />
Citizens<br />
Process<br />
automation<br />
PAs <strong>and</strong> other<br />
organizations<br />
Suppliers<br />
Local entities<br />
Administration<br />
processes<br />
Companies<br />
Hospitals, schools, etc.<br />
Process<br />
automation<br />
Citizens<br />
(a) (b)<br />
Figure 1: Local administration process automation (a) <strong>and</strong> Procurement process automation (b)<br />
scopes<br />
3. Definition of the evaluation criteria <strong>and</strong> measurement plan<br />
The evaluation was defined <strong>and</strong> planned according to the GQM method. It must be noted that in<br />
applying the GQM method the author exploited a quite relevant experience: see for instance<br />
(Fuggetta et al. 1998, <strong>and</strong> Lavazza <strong>and</strong> Mauri 2006). Automated support (Fuggetta et al. 1998,<br />
Lavazza <strong>and</strong> Barresi, 2005) was also used, to some extent.<br />
3.1 Local administration process automation<br />
The evaluation of the local administration process automation addressed five of the several initiatives<br />
of the local administration. Five goals were defined, differing with respect to the addressed quality.<br />
The goals were defined as follows, according to the usual GQM format:<br />
Purpose: evaluation<br />
Object: the five considered automation initiatives<br />
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Luigi Lavazza<br />
Quality: Efficiency, Transparency, Simplification, Resource usage, Resource savings.<br />
Point of view: the local administration management.<br />
Context: the general directions of the local administration.<br />
The qualities of interest, which originated a GQM goal each, were characterized as follows:<br />
Efficiency: the ratio between the “volume” of product <strong>and</strong> the (various types of) resources used.<br />
Transparency: the possibility to observe the state of a procedure <strong>and</strong> of its artifacts <strong>and</strong> products.<br />
Simplification: the number of activities that were automated or made superfluous.<br />
Resource usage: the quantity of the various types of resources used to carry out the procedures.<br />
Resource savings: the monetary value of resource savings required to carry out the procedures.<br />
In general it was required to measure both the situation resulting from the process automation<br />
initiatives <strong>and</strong> the difference with respect to the previous situation.<br />
It was decided to initially deal only with the inner scope, directly addressed by process automation<br />
(Figure 1). In fact, the process automation initiatives were expected to affect the local administration<br />
in a quite straightforward manner (Figure 2). Thus, by evaluating how process automation initiatives<br />
affect the five identified qualities, we expected to get also a general picture of how the local<br />
administration would benefit from the initiatives. The evaluation was then extended to the effects on<br />
the outer level. The GQM plan was therefore initially defined in terms of the inner scope. The quality<br />
focuses identified for every quality <strong>and</strong> plan are schematically illustrated in Table 1 (for the sake of<br />
simplicity, we do not report the questions <strong>and</strong> metrics defined for each plan).<br />
External actors<br />
Local administration<br />
Companies<br />
Administration processes<br />
Resource<br />
saving<br />
Resource usage<br />
Citizens<br />
Process<br />
automation<br />
Efficiency<br />
PAs <strong>and</strong> other organizations<br />
Transparency<br />
Simplification<br />
Figure 2: Local process automation: qualities affecting the local administration<br />
Benefits at the local level affect the performance of the PA, <strong>and</strong> thus change the way the provided<br />
services are perceived by external actors. In order to define a GQM plan that evaluates the process<br />
automation initiatives at the external actor level, we identified the interactions with the external actors<br />
that take place in the considered processes: these interactions determine how the qualities<br />
considered in the local level GQM plan (i.e., the qualities reported in column ‘Quality focuses’ in Table<br />
I.) are perceived externally. The externally perceivable effects of internal process qualities are<br />
reported in Table 2.<br />
Because of limitations in the time <strong>and</strong> money available for the evaluations, the GQM plan for the<br />
external actor level was not executed. However, we were able to show that:<br />
The GQM plan for the external scope is different from the GQM plan for the internal scope;<br />
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Luigi Lavazza<br />
The former can be derived from the latter, observing cause-effect relations in the process that are<br />
the object of the evaluation.<br />
Table 1: Local evaluation of the local process automation: quality focuses<br />
Quality Quality focus Evaluation time(s)<br />
Number of procedure instances carried out in the After process automation;<br />
Efficiency<br />
observation period<br />
Procedure execution time<br />
difference<br />
After process automation;<br />
difference<br />
Number of observable states<br />
After process automation;<br />
difference<br />
Transparency<br />
Amount of information types made available Difference<br />
Completeness <strong>and</strong> timeliness of the available information<br />
After process automation;<br />
difference<br />
Number of automated activities Difference<br />
Simplification<br />
Resource usage<br />
Resource<br />
savings<br />
Number of eliminated activities Difference<br />
Paper documents eliminated (number, types, instances) Difference<br />
St<strong>and</strong>ardized data types Difference<br />
Amount of human resources employed (in the whole<br />
process)<br />
After process automation<br />
Delay in monitoring the amount of human resources<br />
employed<br />
After process automation<br />
Amount of the different types of resources employed (in the<br />
whole process)<br />
Difference<br />
Table 2: Evaluation of external effects of PA process automation: quality focuses<br />
Quality Quality focus External perception<br />
Efficiency Procedure execution time Service completion time<br />
Transparency Number of observable states Service state (e.g., % completed)<br />
Amount of information types made available Detailed state information<br />
Completeness <strong>and</strong> timeliness of the available<br />
information<br />
Real-time service monitoring<br />
Simplification Number of automated activities<br />
Decreased amount of interactions <strong>and</strong> trips<br />
to the PA offices<br />
Number of eliminated activities<br />
Decreased amount of interactions <strong>and</strong> trips<br />
to the PA offices<br />
Paper documents eliminated (number, types,<br />
instances)<br />
Less trivial work to do; less paper to h<strong>and</strong>le<br />
St<strong>and</strong>ardized data types Ease of interaction<br />
By employing the effort saved thanks to<br />
Resource Amount of human resources employed (in the automated <strong>and</strong> cancelled activities, it is<br />
usage<br />
whole process)<br />
possible to increase the amount <strong>and</strong> quality<br />
of provided services.<br />
Resource<br />
savings<br />
Amount of the different types of resources<br />
employed (in the whole process)<br />
Less expensive services. On the long term,<br />
a more cost effective organization of the<br />
whole administration.<br />
3.2 Procurement process automation<br />
The evaluation of the procurement process automation addressed the comparison of the situation<br />
after the introduction of a specific e-procurement platform with the previous situation, characterized by<br />
procurement processes carried out either “manually” or with some support from commercial, non<br />
specific e-procurement tools.<br />
Six goals were defined, differing with respect to the addressed quality. The goals were defined as<br />
follows, according to the usual GQM format:<br />
Purpose: evaluation<br />
Object: the procurement process<br />
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Luigi Lavazza<br />
Quality: Efficiency, Effectiveness, Transparency, Competitiveness, Simplification, Money savings.<br />
Point of view: the local administration management.<br />
Context: the general directions of the local administration.<br />
The qualities of interest, which originated a GQM goal each, were characterized as follows:<br />
The evaluation of efficiency was based on the duration of bids <strong>and</strong> on the amount of employed<br />
resources, both human <strong>and</strong> material.<br />
The evaluation of effectiveness was based on the final price of the goods <strong>and</strong> services acquired<br />
through the bids.<br />
Transparency was evaluated on the basis of the amount of information published on-line <strong>and</strong> on<br />
the time required to retrieve information regarding the bids.<br />
Competitiveness was related to the number of providers involved in the various phases of the<br />
bids.<br />
Simplification was evaluated on the basis of the st<strong>and</strong>ardization of the process <strong>and</strong> the number of<br />
activities that were automated or eliminated by the e-procurement process.<br />
Money savings concerned the amount of money saved either thanks to a cheaper management<br />
of the procurement process or because of the better prices obtained.<br />
With respect to the scopes depicted in Figure 1(b), it was decided to initially address the inner scope,<br />
then to extend the measurement to the effects on the outer level. The GQM plan was therefore initially<br />
defined in terms of the inner scope. In particular, the quality focuses identified for every quality <strong>and</strong><br />
plan are schematically illustrated in Table 3. A relevant variation factor that applies to all the GQM<br />
goals is the number <strong>and</strong> value of the considered bids. Because of space limits, we do not report the<br />
questions <strong>and</strong> metrics defined for each plan.<br />
Table 3: Evaluation of the procurement process: quality focuses<br />
Quality Quality focus External perception<br />
Efficiency<br />
Effectiveness<br />
Transparency<br />
Competitiveness<br />
Simplification<br />
Money savings<br />
Duration of bids, per phase<br />
Effort employed in the management of the bids<br />
Amount of material resources employed, per type <strong>and</strong> per bid<br />
Price per bid type<br />
Quality delivered per bid<br />
On-line bid<br />
On-line evaluation criteria<br />
Quality, quantity <strong>and</strong> delivery time of the information concerning<br />
the bids<br />
Number of providers involved in each phase of the process<br />
(invited, offering, participating to the auction)<br />
St<strong>and</strong>ardization of the process<br />
Number of automated activities<br />
Number of eliminated activities<br />
Money saved because of a better usage of human resources in<br />
the management of the process<br />
Money saved because less material resources are used in the<br />
process<br />
Money saved because of better prices obtained<br />
After process<br />
automation;<br />
difference<br />
After process<br />
automation;<br />
difference<br />
After process<br />
automation;<br />
difference<br />
After process<br />
automation;<br />
difference<br />
After process<br />
automation;<br />
difference<br />
After process<br />
automation;<br />
difference<br />
In order to define a GQM plan that evaluates the process automation initiatives at the provider level,<br />
we proceeded as follows:<br />
We considered the processes involved in the automation initiatives. To this end we built a<br />
schematic model of the process, which is illustrated in Figure 3 (the activities on the left h<strong>and</strong> side<br />
are performed by the PA, while the ones on the right h<strong>and</strong> side are performed by providers).<br />
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Luigi Lavazza<br />
For each process, we identified the interaction with the external actors.<br />
For every interaction, we identified the features of interest (often indicated by column ‘Quality<br />
focuses’ in Table 3) <strong>and</strong> the possible cause-effect relationships that may suggest that the<br />
qualities considered in the first GQM plan (the one involving the local administration level) can be<br />
extended to the GQM plan addressing the outer level.<br />
Moreover, we identified the process features (such as durations of the activities or resource used)<br />
that characterize practically any process <strong>and</strong> are therefore of general interest.<br />
[ no auction ]<br />
Preparation<br />
Publication<br />
Receipt of offers<br />
<strong>and</strong> negotiation<br />
Evaluation of offers<br />
[ auction ]<br />
Auction<br />
Formalization of results<br />
[offer]<br />
[Bid tender]<br />
[Offer]<br />
Participate<br />
in auction<br />
Figure 3: Schematic model of the procurement processes<br />
Registration<br />
Bid monitoring<br />
Decision to participate<br />
Offer preparation<br />
[ auction ]<br />
Offer delivery<br />
Receipt of results<br />
[ participation ]<br />
[ no participation ]<br />
[ no auction ]<br />
Table 4: Evaluation of the external effects of procurement process automation: quality focuses<br />
Quality Quality focus<br />
Efficiency<br />
Effectiveness<br />
Effort employed in the management of the bids<br />
Amount of material resources employed, per type per bid<br />
Number of distinct clients<br />
Number of known bids<br />
Number of participated bids<br />
Number of win bids<br />
Transparency Quality, quantity <strong>and</strong> delivery time of information concerning the bids<br />
Simplification<br />
St<strong>and</strong>ardization of the process<br />
Number of automated activities<br />
Number of eliminated activities<br />
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Luigi Lavazza<br />
The externally perceivable effects of internal process qualities are reported in Table 4. Four of the six<br />
qualities addressed at the internal level were applicable also at the provider level. Note that, unlike in<br />
Table 2, in Table 4 we do not just describe the external perception of the ‘internal’ quality focuses;<br />
instead, we redefine the quality factors altogether, in order to reflect the change of scope.<br />
The measurement process could have been further extended, e.g., to involve citizens <strong>and</strong> other PAs<br />
that will use the specific e-procurement platform.<br />
The illustrated GQM plans have been successfully executed. The results are sketched in next<br />
session.<br />
4. Impact on business<br />
Because of confidentiality reasons we can give only qualitative indications about the effects of the<br />
described initiatives in terms of consequences on the business.<br />
Concerning local process automation, the duration of processes was reduced between 40 <strong>and</strong> 52 %.<br />
The savings were converted in money in order to be summed <strong>and</strong> compared with the costs. It was<br />
estimated that the balance of costs <strong>and</strong> savings would reach the parity after three years from the<br />
beginning of the initiative, <strong>and</strong> that afterwards the savings would remain steadily greater than<br />
operation <strong>and</strong> maintenance costs.<br />
The process automation had also the effect of eliminating several clerical activities. The human<br />
resources that were freed from such tasks could be reallocated to more satisfactory jobs.<br />
The consequences of the e-procurement automation initiative for the public administration were:<br />
The bid management process duration decreased of about 30%<br />
The work saved ranged from 10% to 22%, depending on the roles.<br />
In general, <strong>using</strong> e-procurement allowed the public administration to save money on the price of<br />
the acquired services <strong>and</strong> goods, with no decrease in quality. Quite interestingly, there seems to<br />
be a sort of economy of scale effect: savings are bigger (in percentage) for bigger bids, while for<br />
small bids a moderate increase in prices was frequently observed.<br />
Providers saved 42% of the employee work needed for carrying out bids. However, no appreciable<br />
reduction of management activity was observed. This suggests that the automation of e-procurement<br />
affects only the most clerical activities.<br />
5. Related work<br />
The Balanced Scorecards (BSC) technique (Kaplan <strong>and</strong> Norton 1992) suggested that strategic<br />
management should consider several interrelated aspects, namely it should address the financial<br />
perspective, the internal process perspective, the innovation <strong>and</strong> learning perspective <strong>and</strong> the<br />
customer perspective. These indications are clearly relevant in our case, since we are evaluating<br />
initiatives concerning the process (internal process perspective), which determine the financial<br />
performances (financial perspective) <strong>and</strong> the satisfaction of the customer (customer perspective).<br />
Several researchers have addressed the need of dealing with wide scopes, involving several aspects<br />
<strong>and</strong> requiring measures at different levels, often proposing combinations of GQM <strong>and</strong> CSB concepts<br />
<strong>and</strong> practices (Becker <strong>and</strong> Bostelman 1999, Buglione <strong>and</strong> Abran 2000, Bianchi 2001, Card 2003).<br />
Recently the GQM+Strategies approach has been proposed (Basili et al. 2010), to extend the GQM<br />
paradigm for measuring the success or failure of goals <strong>and</strong> strategies.<br />
The work reported here shares some motivations with GQM+Strategies, sine we are dealing with<br />
multi-level strategic goal achievement assessment. Nevertheless our work (started in 2008 <strong>and</strong><br />
completed in 2009) did not benefit from the indications provided in (Basili et al. 2010), <strong>and</strong> was<br />
carried out in a more immediate, ad-hoc way. As such, it provides some real-life examples of<br />
problems <strong>and</strong> hints of solutions that could be useful also to those who are going to apply<br />
GQM+Strategies.<br />
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6. Conclusions<br />
Luigi Lavazza<br />
When evaluating process automation initiatives based on software systems, it is often the case that<br />
the evaluation, in order to be complete, has to measure the effects of the involved processes out of<br />
the boundaries of the organization that promoted the automation. This is particularly true when the PA<br />
is involved, since PA processes tend to involve companies, organizations, citizens, etc. that directly or<br />
indirectly interact with the administration’s processes.<br />
In this paper we have first of all highlighted the existence of a multiplicity of scopes that measurement<br />
plans addressing process automation need to consider. Then we have shown that the multiplicity of<br />
scopes can be managed by means of multiple related GQM plans (Figure 4).<br />
External actors<br />
Regional entities<br />
Local<br />
processes<br />
Process<br />
automation<br />
GQM plan<br />
GQM plan<br />
GQM plan<br />
Figure 4: Schematic model of the procurement processes<br />
In defining the measurement process, one can start from the inner scope –i.e., that of the promoting<br />
organization– <strong>and</strong> derive the corresponding GQM plan (the one on the bottom of Figure 4). This<br />
GQM plan can then be extended to address the enclosing scope. We have suggested that a carefully<br />
analysis of the business processes can indicate how to extend the original GQM plan, thus re<strong>using</strong><br />
the GQM plan definition <strong>and</strong> minimizing the effort to be devoted to measurement. This process can be<br />
iterated until the outer scope is reached.<br />
We have shown the viability of the proposed approach by reporting the measurement plans for a<br />
couple of real cases involving the public administration.<br />
In conclusion, we believe that this paper can help people involved in evaluations of process<br />
automation initiatives by providing a few hints on the organization of the measurement plans.<br />
Finally, it can be noticed that the general approach of adapting/extending the measurement plans<br />
according to changes/extensions in scope can be used for several different kinds of process<br />
evaluations. In fact, the proposed approach is suited not just for process automations, but also for all<br />
those cases when the multiple scopes are applicable, while the general goals remain stable. This is<br />
the case, for instance, for many software developers, whose goals are always the same (keeping<br />
development cost <strong>and</strong> time under control, providing good quality, etc.) while the perception of the<br />
goals depends on the scope of the analysis, which can involve developers, managers, suppliers,<br />
customers, etc.<br />
References<br />
Basili, V. <strong>and</strong> Weiss D. (1984) “A methodology for collecting valid software engineering data” IEEE Transactions<br />
on Software Engineering, vol. SE-10, no. 6, pp. 728-738.<br />
Basili, V. <strong>and</strong> Rombach, D. (1988) “The TAME project: towards improvement-oriented software environments,”<br />
IEEE Transactions on Software Engineering, vol. 14, no. 6, pp. 758-773.<br />
Basili, V., Caldiera, G., <strong>and</strong> Rombach, D. (1994) “Goal/Question/Metric Paradigm,” in Encyclopedia of Software<br />
Engineering, vol. 1, J. C. Marciniak, Ed.: John Wiley & Sons, pp. 528-532.<br />
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Basili, V., Lindvall, M., Regardie, M., Seaman, C., Heidrich, J., Munch, J., Rombach, D. <strong>and</strong> Trendowicz, A.<br />
(2010) “Linking Software Development <strong>and</strong> Business Strategy Through Measurement” Computer, vol. 43,<br />
no. 4, pp. 57-65.<br />
Becker, S.A. <strong>and</strong> Bostelman, M.L. (1999) “Aligning Strategic <strong>and</strong> Project Measurement Systems” IEEE Software,<br />
vol. 16, no. 3, pp. 46-51.<br />
Bianchi, A.J. (2001) “<strong>Management</strong> Indicators Model to Evaluate Performance of IT Organizations” International<br />
Conference on <strong>Management</strong> of Engineering <strong>and</strong> Technology, vol. 2, IEEE Press, pp. 217-229.<br />
Buglione, L. <strong>and</strong> Abran, (2000) A. “Balanced Scorecards <strong>and</strong> GQM: What Are the Differences?” 3rd European<br />
Software Measurement Conference, Federation of European Software Measurement Association, pp. 18-<br />
20.<br />
Card, D. (2003) “Integrating Practical Software Measurement <strong>and</strong> the Balanced Scorecard” 27th Annual<br />
International Computer Software <strong>and</strong> Applications Conference, IEEE CS Press, p. 362-363.<br />
Fuggetta, A., Lavazza, L., Morasca, S., Cinti, S., Oldano, G. Orazi, E. (1998) “Applying G/Q/M in an Industrial<br />
Software Factory”, ACM Transactions on Software Engineering <strong>and</strong> Methodology, vol. 7, no. 4.<br />
Kaplan, R. <strong>and</strong> Norton, D. (1992) “The Balanced Scorecard - Measures that Drive Performance”, Harvard<br />
Business Review, vol. 70, no. 1.<br />
Lavazza, L. <strong>and</strong> Barresi, G. (2005) “Automated Support for Process-aware Definition <strong>and</strong> Execution of<br />
Measurement Plans”, International Conference on Software Engineering – ICSE 2005, St. Louis, Missouri,<br />
May.<br />
Lavazza, L. <strong>and</strong> Mauri, M. (2006) “Software Process Measurement in the Real World: Dealing with Operating<br />
Constraints”. Software Process Workshop – SPW/Prosim 2006, Shanghai, May. Lecture Notes in Computer<br />
Science Volume 3966.<br />
302
eBusiness Model Design <strong>and</strong> Evaluation: The Pieces Make<br />
the Puzzle<br />
Monika Magnusson<br />
Karlstad University, Sweden<br />
Monika.Magnusson@kau.se<br />
Abstract: SMEs (Small <strong>and</strong> Medium-sized Enterprises) nowadays have to deal with the highly complex situation<br />
of global competition, fast technology development <strong>and</strong> extensive business networking. Because of their importance<br />
for the economy, it is essential that SMEs embrace new technology <strong>and</strong> adapt to societal changes such as<br />
the increasing use of eCommerce. Few innovations in history offer as much benefits as eCommerce, at least<br />
theoretically. However, many SMEs are poor at managing technology as a strategic weapon since their human<br />
<strong>and</strong> financial resources are limited. There is a need in SMEs for elementary conceptual tools for designing <strong>and</strong><br />
evaluating their eCommerce model. While there are frameworks <strong>and</strong> methods for business model design <strong>and</strong><br />
evaluation, earlier research on eCommerce (or eBusiness) models often focus on business model categories<br />
rather than how to design a specific company's plan for eCommerce. Further knowledge of these matters would<br />
facilitate for SMEs to gain benefits from eCommerce. The purpose of this theoretical study is to suggest a conceptual<br />
framework for the evaluation <strong>and</strong> design of eBusiness models in SMEs. The framework integrates eBusiness<br />
model elements from earlier research with a model of organizational change levels. Additionally, a number<br />
of variants or ‘values’ for the eBusiness model elements are proposed as a tool for design or evaluation together<br />
with a set of ‘guiding questions’. The importance of IT in an eBusiness model is acknowledged as technology<br />
factors are integrated in the framework. Furthermore, it is proposed that it is valuable to conceptually separate<br />
the business model from the eBusiness model as some companies chose to offer a different value proposition or<br />
target other customer segment in the eCommerce endeavor than in their traditional sales <strong>and</strong> marketing channels.<br />
Keywords: eBusiness model, eCommerce, SME, eBusiness model design <strong>and</strong> evaluation<br />
1. Introduction<br />
Few innovations in history offer as much benefits as eCommerce, at least theoretically. For SMEs<br />
eCommerce present a cost efficient way of marketing <strong>and</strong> selling their products <strong>and</strong> services to a<br />
world-wide market, at a twenty-four seven basis. Small <strong>and</strong> medium-sized enterprises (SMEs) are<br />
sometimes called the backbone of a country because of their importance for generating employment,<br />
engendering competition <strong>and</strong> creating economic wealth (Hay & Kamshad 1994). Because of their<br />
importance for the economy, it is essential that SMEs embrace new technology <strong>and</strong> adapt to societal<br />
changes such as the increasing use of eCommerce even if this is not always an easy task. Today’s<br />
SMEs must deal with the highly complex situation of global competition, fast technology development<br />
<strong>and</strong> extensive business networking. Although the ideal is that all companies with prominent business<br />
ideas will survive <strong>and</strong> prosper, the reality is different. A finely attuned interplay between several business<br />
elements is also necessary. This interplay can best be described as a business model. A business<br />
model is ‘a conceptual tool that contains a set of elements <strong>and</strong> their relationships <strong>and</strong> allows<br />
expressing the business logic of a specific firm’ (Osterwalder et al., 2005:10). Accordingly, an eBusiness<br />
model is a ‘blue print’ of how a company creates revenue by their use of eCommerce.<br />
SMEs are sometimes claimed to be poor at managing technology as a strategic weapon due to limited<br />
human <strong>and</strong> financial resources (Buratti & Penco 2001). There is a need in SMEs for elementary,<br />
but yet powerful, conceptual tools for designing <strong>and</strong> evaluating their eCommerce model. However, the<br />
relatively few frameworks <strong>and</strong> methods that exist (see for example Morris et al. 2005 <strong>and</strong> Osterwalder<br />
et al. 2005) give limited support for designing the IT part of the (e-)business model. This is unfortunate<br />
as the SMEs in the study of Kim et al. (2008) found the matching of technology with business needs<br />
to be one of the major challenges <strong>and</strong> obstacles in forming an eBusiness strategy. The design or<br />
evaluation of an eBusiness model in a structured <strong>and</strong> systematic way could assist SMEs in these<br />
matters. The purpose of this study is therefore to propose a conceptual framework for the design <strong>and</strong><br />
evaluation of eBusiness models in SMEs. The study is theoretical in nature like most other studies of<br />
business model elements.<br />
2. Business models vs eBusiness models<br />
There is still no consensus in academic literature regarding the definition of the concept ‘business<br />
model’ (Morris et al, 2005, Yunus et al., 2010). In this study we will use the definition of Osterwalder et<br />
al. (2005:10) that builds on a substantial literature review:<br />
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“A business model is a conceptual tool that contains a set of elements <strong>and</strong> their relationships<br />
<strong>and</strong> allows expressing the business logic of a specific firm. It is a description of the<br />
value a company offers to one or several segments of customers <strong>and</strong> of the architecture<br />
of the firm <strong>and</strong> its network of partners for creating, marketing, <strong>and</strong> delivering this value<br />
<strong>and</strong> relationship capital, to generate profitable <strong>and</strong> sustainable revenue streams.”<br />
This definition is one of the more comprehensive ones. In short a business model is a “blueprint of<br />
how a company does business” (Osterwalder at al., 2005:2). The phenomenon of business models<br />
were not acknowledged to any larger extent in research until the late 1990s, a couple of years after<br />
Internet’s breakthrough. The focus was initially on defining the concept “business model” <strong>and</strong> on identifying<br />
different categories of eBusiness models (Osterwalder et al., 2005). Timmers (1999) description<br />
of various types of electronic commerce models is a well-known source in this phase.<br />
Osterwalder et al. (2005) describe how the research in the area then evolved into listing business<br />
model components or elements <strong>and</strong> describing or modeling these in reference models <strong>and</strong> ontologies.<br />
The next step in research, which according to Osterwalder et al. still were in its infancy in 2005, is to<br />
apply the business model concept in applications <strong>and</strong> conceptual tools for management.<br />
Although the business model concept originated from Internet commerce most frameworks are generic<br />
in nature <strong>and</strong> equally applicable to traditional commerce. For some organizations, such as pure<br />
e-tailors, the eBusiness model is the business model. However, for traditional retailers or bricks-<strong>and</strong>mortars<br />
starting a web shop as a complement, the eBusiness model may differ from the (overall)<br />
business model. The eBusiness model can for example have another target market, a slightly different<br />
value proposition, other distribution channels etc.<br />
Wu <strong>and</strong> Hisa (2008:95) describe eCommerce as the use of eCommerce technologies to “execute<br />
transactions, communicate, <strong>and</strong> innovate to support commerce through cyberspace”. This study uses<br />
a similar definition. ECommerce is here defined as digital transactions of commercial business information<br />
between a buyer <strong>and</strong> a seller via communication channels such as the Internet or telecommunications<br />
networks. Both business-to-business commerce (B2B) <strong>and</strong> business-to-consumer (B2C) are<br />
included as well as trade in both physical <strong>and</strong> digital products <strong>and</strong> different types of services. Moreover,<br />
we focus on what Rappa (2004) refers to as a merchant model respectively a manufacturer<br />
model for eCommerce. The former include e-tailors or retailers that operate solely over the web as<br />
well as mail-order businesses with both web <strong>and</strong> traditional mail-order sales <strong>and</strong> moreover, traditional<br />
brick-<strong>and</strong>-mortar retailers with web storefronts. The latter allows manufacturer to sell, lease or license<br />
their products or services directly to the customers. For the purpose of this study the concepts of<br />
eBusiness (model) <strong>and</strong> eCommerce (model) will be used as interchangeably as earlier research use<br />
the concept eBusiness model when they in fact refer to business models for eCommerce (that focus<br />
solely on buyer-seller in contrary to eBusiness).<br />
3. eBusiness model elements<br />
Several studies have proposed business model elements or components (e.g. Osterwalder & Pigneur,<br />
2002; Morris et al., 2005, Yunus et al., 2010). While some components are frequently suggested there<br />
is also a large variety. The literature reviews in Morris et al. (2005) <strong>and</strong> Shafer et al. (2005) revealed a<br />
large number of elements proposed for both generic business models <strong>and</strong> for eBusiness models.<br />
Different suggestions on how to structure or organize these elements also exist. Osterwalder et al.<br />
(2005) suggests four ‘pillars´; product, customer interface, infrastructure management <strong>and</strong> financial<br />
aspects. These ‘pillars’ are then specified in nine business model building blocks; value proposition<br />
(product), target customer, distribution channel, relationship (customer interface), value configuration,<br />
core competence, partner network (infrastructure management), cost structure <strong>and</strong> revenue model<br />
(financial aspect). The framework of Osterwalder et al. (2005) has several similarities with the business<br />
model elements that Pateli <strong>and</strong> Giaglis (2004:308) suggest for evaluations of business models<br />
for eBusiness. The elements in their framework are mission (or strategic objectives), target market<br />
(defined by scope <strong>and</strong> market segment), value proposition (or product/service offering), resources<br />
(defined by capabilities <strong>and</strong> assets), key activities (in form of intra- <strong>and</strong> inter-organizational processes),<br />
cost <strong>and</strong> revenue model (defined by cost <strong>and</strong> revenue streams, pricing policy), <strong>and</strong> value<br />
chain/net (in form of alliances <strong>and</strong> partnerships).<br />
Morris et al. (2005) propose a number of ‘guiding questions’ to assist the design divided into six areas:<br />
factors related to the offering, market factors, internal capability factors, competitive strategy<br />
factors, economic factors <strong>and</strong> personal/investor factors. Morris et al. (2005) also identify three generic<br />
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categories of business model elements in earlier studies labeled economic, operational <strong>and</strong> strategy.<br />
Yunus et al. (2010) found that three similar elements are usually distinguished in academic literature;<br />
the value proposition, the value constellation (how the company is organized to be able to deliver the<br />
product or service to its customers) <strong>and</strong> the revenue model (foc<strong>using</strong> on how profit is created from<br />
sales, costs, <strong>and</strong> capital employed). Shafer et al. (2010) divide their elements into components for<br />
strategic choices, value network, create value <strong>and</strong> capture value. Demil <strong>and</strong> Lecocq (2010) build on<br />
Penrose 1 ideas of how growth occurs in a firm as they suggest that the essential components in a<br />
business models is resources & competences, value proposition, internal & external organization,<br />
volume & structure of revenues, volume & structure of costs <strong>and</strong> margin. Three themes or areas for<br />
business model thus emerge in earlier research:<br />
Strategic issues concerning the value proposition <strong>and</strong> the market segment – What is our value<br />
proposition <strong>and</strong> for whom? This includes deciding which products <strong>and</strong> services to offer <strong>and</strong> how<br />
these add value to the customers.<br />
Operational issues concerning how to organize the company <strong>and</strong> its interaction with the context to<br />
be able to deliver the value propositions to the customers in an efficient way. This includes key<br />
activities/business processes, partner network, distribution channels, necessary competences<br />
<strong>and</strong> other resources.<br />
Financial issues such as revenue model, cost structure <strong>and</strong> margins.<br />
From an information system’s perspective these give little support for designing the information systems<br />
that should make operational the strategies <strong>and</strong> business processes. The dominating point of<br />
view in earlier research seems to be that the business model is separated from the business processes<br />
<strong>and</strong> information <strong>and</strong> communication systems (c.f. Osterwalder & Pigneur, 2002; Petrovic et<br />
al.,2001). Wu <strong>and</strong> Hisa (2008:102) argue for example that “A business model is a mediating construct<br />
between technologies <strong>and</strong> business value”. de Reuver <strong>and</strong> Haaker (2009) however, suggest that the<br />
construction of a mobile service business model includes design issues concerning the service domain<br />
(including targeting <strong>and</strong> value creating elements), the technology domain, the organizational<br />
domain <strong>and</strong> the financial domain.<br />
The productivity paradox 2 has highlighted that the development of new information systems needs to<br />
walk h<strong>and</strong> in h<strong>and</strong> with the development of business strategies <strong>and</strong> processes. This is acknowledged<br />
in business model research although technology seldom is mentioned as an actual part of a business<br />
model. Rather it is discussed how technology can be applied to implement the business model in the<br />
next step. However, these arguments are contradicting since the concept of business models arose<br />
as a result of new technologies such as Internet. Chesbrough <strong>and</strong> Rosenbloom (2002) for example<br />
claim that the process of defining a business model “begins with articulating a value proposition latent<br />
in the new technology”. Since then a number of new technologies <strong>and</strong> applications have found its way<br />
into eCommerce; mobile phones <strong>and</strong> lately smart phones, iPads, information kiosks, Facebook, blogs<br />
etc. Wu <strong>and</strong> Hisa (2008) claim that internet commerce <strong>and</strong> mobile commerce will be followed by ucommerce<br />
– ubiquitous commerce enabled by wireless <strong>and</strong>/or embedded IT. All these innovations<br />
offer slightly different opportunities, highly intertwined with the technology in question, which calls for<br />
a necessity to incorporate the technology in the business model.<br />
4. A business model framework<br />
Earlier studies have suggested different ways of <strong>using</strong> frameworks to facilitate design <strong>and</strong>/or evaluation<br />
of (e-) business models. Morris et al., (2005:729) presents a framework in “three increasingly<br />
specific levels of decision making”. Gordijn et al. (2000) propose an ontology for describing actors <strong>and</strong><br />
the exchange of value object. Several have also showed how different business model elements can<br />
be utilized to analyze <strong>and</strong> compare empirical business models (c.f. Demil & Lecocq, 2010; Yunus et<br />
al., 2010). Osterwalder et al. (2005) present matrixes that assist the analysis of the alignment between<br />
the business model elements <strong>and</strong> a) IT infrastructure services, b) the IT application portfolio<br />
<strong>and</strong> c) requirement engineering goals. Furthermore, they also suggest a matrix for combining business<br />
model elements with balanced scorecards. Neither of the sources in the literature review includes<br />
information technology as a major component of business models although for example Weill<br />
<strong>and</strong> Vitale (2002:18) state that an eBusiness model is “heavily IT enabled”. There are also numerous<br />
1 Penrose, E.T. (1959), The Theory of the Growth of the Firm, John Wiley, New York.<br />
2 The fact that the adoption of new IT often does not lead to an increased productivity in the organization was first acknowledged<br />
by Erik Brynjolfsson (1998) “Beyond the Productivity Paradox: Computers are the Catalyst for Bigger Changes”, online<br />
at http://ebusiness.mit.edu/erik/bpp.pdf (May 2011).<br />
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empirical examples where technology plays a vital role in the business model. Among those are ebooks,<br />
<strong>and</strong> sms tickets for buses <strong>and</strong> trains. Yet another reason for incorporating IT in the business<br />
model is the ongoing debate of lacking alignment between business strategy <strong>and</strong> IT.<br />
Österle (1995) <strong>and</strong> Nilsson (1999) present a conceptual model that focus on organizational change on<br />
three levels; the strategy level, the process level <strong>and</strong> the system (technology) level, see<br />
Figure 1. The level model, as presented by Österle (1995) <strong>and</strong> Nilsson (1999), has a relatively high<br />
level of abstraction. Neither of authors makes an in-depth explanation of what is covered at each<br />
level, possibly because these concepts are already thoroughly attended to in other literature. The<br />
strategy level that focuses on strategic development may include issues such as product assortment,<br />
target markets, customer relationship, resources etc. (Magnusson, 2006). The business process level<br />
focus on improvements in processes <strong>and</strong> operations. The systems level finally, corresponds to what<br />
de Reuver <strong>and</strong> Haaker (2009) call the technology domain with issues concerning development of<br />
IS/IT. The arrows in Figure 1 intend to illustrate that development at one level might, or ought to, result<br />
in development at the other levels. Thus, when applied to business model design, changes in for<br />
example strategic issues as target customers should be followed up by analyzing necessary or enabled<br />
changes in the other levels.<br />
Strategy level<br />
Process level<br />
System level<br />
Figure 1: Organizational levels of development (source: Österle (1995), Nilsson (1999))<br />
To acknowledge the need for a business model that considers all the organizational levels the ‘three<br />
level model’ will serve as a point of departure for the conceptual framework that is to be constructed in<br />
this study. Elements from earlier business model research were thus classified in accordance with the<br />
levels in the ‘three level model’. The selected eBusiness model elements are briefly described in<br />
Table 1, for more thorough explanations see the listed references.<br />
Table 1: eBusiness model elements<br />
Business Model<br />
Elements<br />
Strategy level<br />
Description Example of references<br />
Value Proposition The bundle of products <strong>and</strong> services that a company<br />
offers <strong>and</strong> the value that these create for a<br />
specific customer segment.<br />
Target Customers The segments of customers that the company wants<br />
to offer value to.<br />
Competitive Strategy How the company will gain <strong>and</strong> hold advantage over<br />
Revenue Model <strong>and</strong><br />
Cost Structure<br />
Process level<br />
Key Activities/Processes<br />
Distribution <strong>and</strong> Communication<br />
Channels<br />
their competitors.<br />
How the company will make money by different<br />
revenue streams <strong>and</strong> the monetary consequences<br />
of the business model.<br />
The value chain of activities, processes, resources<br />
<strong>and</strong> actors arranged to produce <strong>and</strong> distribute the<br />
value proposition.<br />
The channels through which the company communicates<br />
with their customers <strong>and</strong> delivers the value<br />
proposition.<br />
Osterwalder et al.(2005);<br />
Chesbrough <strong>and</strong> Rosenbloom<br />
(2002)<br />
Osterwalder et al. (2005)<br />
Chesbrough <strong>and</strong> Rosenbloom<br />
(2002)<br />
Morris et al. (2005), Osterwalder<br />
et al. (2005)<br />
Osterwalder et al. (2005) 3<br />
Osterwalder et al. (2005)<br />
Core Competences The competences necessary to execute the com- Osterwalder et al. (2005)<br />
3 Osterwalder et al. (2005) use the concept *Value configuration’.<br />
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Monika Magnusson<br />
Business Model<br />
Elements<br />
pany’s business model.<br />
Description Example of references<br />
Partner Network<br />
System level<br />
The network of cooperative agreements with other<br />
companies necessary to efficiently offer <strong>and</strong> commercialize<br />
value.<br />
Osterwalder et al. (2005)<br />
Technology The necessary software, hardware <strong>and</strong> networks to Chaffey (2002), Chang <strong>and</strong><br />
execute the business model. The sourcing <strong>and</strong><br />
hosting of the eCommerce system.<br />
Chen (2009)<br />
Security Security in the transactions as a whole, including<br />
means of payment <strong>and</strong> the storage <strong>and</strong> transmission<br />
of personal information.<br />
Chang <strong>and</strong> Chen (2009)<br />
Systems Integration The integration between the eCommerce system<br />
<strong>and</strong> internal IS <strong>and</strong> partners’ <strong>and</strong> customers’ IS.<br />
Chaffey (2002)<br />
The elements for the strategy <strong>and</strong> the process levels were selected by studying elements in earlier<br />
research <strong>and</strong> selecting the elements that were most frequently mentioned. The resulting elements<br />
corresponded well with the most frequently found components in the literature study of Shafer et al.<br />
(2005). The elements were then classified in accordance with the ‘three level model’ by considering<br />
whether a specific element had mainly to do with the production <strong>and</strong> distribution of the products or<br />
service (process level) or whether they mainly concerned an overall plan for maintaining or changing<br />
the organization’s competitive position on the market (strategy level). As this study aims to integrate<br />
technology into the eBusiness model important elements at the technology level were also identified<br />
in earlier studies.<br />
4.1 The relationship between the business model <strong>and</strong> the eBusiness model<br />
Earlier studies have rarely discussed the difference between the overall/generic business model <strong>and</strong><br />
the eBusiness model as the ‘e’ often is implicitly built-in to the model. However, in some companies<br />
eCommerce is utilized to reach new customers or to market other value propositions than in the traditional<br />
marketing channels. The eBusiness model is a part of the overall business model <strong>and</strong> should<br />
encompass both strategies, processes <strong>and</strong> IS/IT (system) decisions. Thus, although the business<br />
model elements are the same in the business model as in the eBusiness model, some adjustments in<br />
the design or ‘value’ of the individual elements may take place, see Figure 2.<br />
Figure 2: The relationship between the business model <strong>and</strong> the eBusiness model<br />
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5. The processes of design <strong>and</strong> evaluation of eBusiness models<br />
5.1 Designing the elements<br />
Designing a business model means creating a unique combination of business elements in perfect<br />
interplay. Strategic decisions of which products to offer on which markets need to be combined with<br />
decisions on which distribution channels <strong>and</strong> technical platforms to use, to best market the products<br />
<strong>and</strong> reach the target customers. The choices are many <strong>and</strong> difficult <strong>and</strong> there is no single ‘best practice’.<br />
While some companies are bound to start from an existing value offering others may start from a<br />
market segment, looking for ways to develop an attractive value propositions for customers in that<br />
segment. Sometimes the launching of new technology is the starting point for new business models.<br />
The sudden increase in apps for so called smart phones is one example of this. A possible starting<br />
point that decreases the complexity of designing the element is to identify possible ‘values’ or variants<br />
for the elements. In Table 2 potential values of the identified elements are proposed. These are only<br />
examples <strong>and</strong> should not be seen as an exhaustive list of values/variants.<br />
Table 2: Business model elements <strong>and</strong> potential variants<br />
Strategy level Element variants References<br />
Value Proposition<br />
Target Customers<br />
Competitive<br />
Strategy<br />
Revenue Model<br />
<strong>and</strong> Cost Structure<br />
Process level<br />
Key Activi-<br />
Mainly products/mainly services/heavy mix<br />
St<strong>and</strong>ardized/some customization/high customization<br />
Access to product/product itself/product bundled with other firm’s product<br />
Assortment; broad, medium or narrow (similar to physical store, adjusted,<br />
decreased or increased)<br />
Value source; efficiency, complementarities, lock-in, novelty<br />
B2B/B2C/both<br />
Geographical segment; local/regional/national/international<br />
Demographical segment<br />
Broad vs niche market<br />
Image of operational excellence/consistency/dependability/speed<br />
Product or service quality/selection/features/availability<br />
Innovation leadership/low cost efficiency/ intimate customer relation-<br />
ship/experience/br<strong>and</strong>ing<br />
Revenue methods; sales/leasing/subscription/support etc.<br />
Pricing <strong>and</strong> revenue sources; fixed/mixed/flexible<br />
Pricing methods; cost-based methods/competition-basedmethods/dem<strong>and</strong>-based<br />
pricing etc.<br />
Operating leverage; high/medium/low<br />
Volumes; high/medium/low<br />
Margins; high/medium/low<br />
Marketing, selling, distribution, sourcing, pricing, customer relationties/Processesships,<br />
after-sales etc.<br />
Distribution <strong>and</strong><br />
Traditional distribution channel/online channel<br />
Communication Marketing channels; sales team/catalogue/internet market-<br />
Channels<br />
ing/newsletter/ e-mail/affiliate/TV/radio/social media/sms etc.<br />
Core Compe- Manufacturing, marketing, selling, distribution, sourcing, pricing, custencestomer<br />
relationships, after-sales etc.<br />
Partner Network Suppliers, collaboration partners, industry networks, universities etc.<br />
System level<br />
Technology Type of eCommerce application <strong>and</strong> technologies in use (e.g. web<br />
shop, e-catalogue etc.)<br />
Sourcing; custom-made or off-the-shelf software, SaaS (Software as a<br />
Service) etc.<br />
Hosting; external or internal<br />
Access platforms; Internet, mobile phone, tablet computers, interactive<br />
TV etc.<br />
Security Payment security, data security, physical security etc.<br />
Systems Integra- St<strong>and</strong>-alone eCommerce system or integration with legacy systems<br />
tion such as ERP (Enterprise Resources Planning), external integration with<br />
customers, suppliers <strong>and</strong>/or collaboration partners.<br />
308<br />
Morris et al.<br />
(2005)<br />
Amit <strong>and</strong> Zott<br />
(2001)<br />
Morris et al.<br />
(2005)<br />
Morris et al.<br />
(2005)<br />
Morris et al.<br />
(2005)<br />
Avalonitis <strong>and</strong><br />
Indounas,<br />
(2005)<br />
Lefebvre et al.<br />
(2005)<br />
Chaffey (2002)
5.2 Guiding questions<br />
Monika Magnusson<br />
Another approach that can facilitate the design or evaluation of an eBusiness model is to use ‘guiding<br />
questions’. Some examples of guiding questions are presented in Table 3. Morris et al. (2005), among<br />
others, present similar questions. The questions could also be connected to the different identified<br />
business model elements in Table 2, foc<strong>using</strong> on the pros <strong>and</strong> cons of different alternatives. Similar<br />
questions can be used to evaluate an existing business model although the center of attention then<br />
will be on how well the existing design is in terms of the elements ‘values’ <strong>and</strong> the interplay between<br />
the elements.<br />
Table 3: Guiding questions for eBusiness model design<br />
Strategy level<br />
Value proposition What is our value proposition to the customers? (i.e. What value do we create for our<br />
customers?)<br />
What products <strong>and</strong>/or services should we offer? (Assortment, quality, customization<br />
etc.)<br />
Target customers In what market segments are our target customers? (Geographically, consumers<br />
<strong>and</strong>/or organizations, demographically etc.)<br />
What customer needs should our products/services fulfill?<br />
Competitive strategy How will we gain <strong>and</strong> hold advantage over our competitors?<br />
Revenue model <strong>and</strong><br />
cost structure<br />
Distribution <strong>and</strong><br />
communication<br />
channels<br />
Key activities/processes<br />
Regarding our value proposition – what distinguish us from our competitors?<br />
Which are our major revenue streams?<br />
Which pricing method should we adopt?<br />
Considering the design of elements at strategy, process level <strong>and</strong> systems level –<br />
what are the costs?<br />
Process level<br />
Which distribution <strong>and</strong> communication channels are best for a value proposition <strong>and</strong><br />
customer segment?<br />
What are the key processes/activities for enabling our value proposition?<br />
(And what is the most efficient way of performing a key process?)<br />
What are the key resources?<br />
Core competences What are the core competences for accomplishing our value proposition?<br />
Partner network What collaboration partners do we need to be able to offer our value proposition in a<br />
cost efficient way?<br />
System level<br />
Technology What type of eCommerce application(s) best supports our value proposition?<br />
Which technology platforms are most appropriate for our target customers?<br />
Where do we host the eCommerce system?<br />
Security What are the security risks in the technology <strong>and</strong> how do we h<strong>and</strong>le them?<br />
Systems integration Which data from other IS (internal <strong>and</strong> external) do we need for our value proposition?<br />
Is it feasible <strong>and</strong> financially motivated to integrate these systems?<br />
5.3 Interplay between the elements<br />
The idea behind the business model concept is that a number of elements need to harmonize <strong>and</strong><br />
interact for a company to succeed. However, we will propose that the difficult puzzle of making a<br />
company successful can be summarized in four elementary pieces that need to fit together; the market<br />
offering, the target customer, the business infrastructure <strong>and</strong> profitability, see Figure 3. The latter<br />
is in fact the result of the other three. The ‘right’ market offering in terms of value proposition, competitive<br />
strategy, pricing etc. offered to the ‘right’ target customers/market segments <strong>and</strong> produced by the<br />
‘right’ business infrastructure (in terms of processes, partner networks, resources, technologies, competences,<br />
distribution <strong>and</strong> communication channels) creates profitability.<br />
6. Contributions <strong>and</strong> discussion<br />
The here presented framework, building on research on business models <strong>and</strong> eBusiness models,<br />
acknowledges a number of elements that need to be considered when an eCommerce initiative is<br />
initialized. The same elements <strong>and</strong> their interplay may be utilized to evaluate if improvements in the<br />
eBusiness model are needed <strong>and</strong> how. Earlier studies have already proposed frameworks <strong>and</strong> ontologies<br />
for business models. The framework presented in this paper develops these further by incorporating<br />
the enabling technology in the model. This is valuable as research on organizational<br />
development (see Österlee 1995 <strong>and</strong> Nilsson, 1999) emphasize that technology need to be designed<br />
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Monika Magnusson<br />
<strong>and</strong> changed in interplay with business strategy <strong>and</strong> business processes. The technology further has<br />
the power to affect the design of other business element as it enables <strong>and</strong> delimits the value proposition,<br />
payment methods, <strong>and</strong> distribution <strong>and</strong> communication channels for example.<br />
Figure 3: The business model puzzle<br />
Another contribution of the paper is the mapping of variants of eBusiness model elements in Table 2.<br />
These could help SMEs design their eBusiness model elements by identifying alternative choices.<br />
The list of business model element variants needs to be further enhanced <strong>and</strong> extended in forthcoming<br />
studies. Also the ‘guiding questions’ could serve as a design tool for SMEs by concretizing business<br />
model decision-making.<br />
A contribution to theory is the clarification of the relationship between a business model <strong>and</strong> an<br />
eBusiness model, see Figure 2. The model acknowledge that while there are obvious similarities between<br />
the two, they do not necessary coincide.<br />
A suitable step for forthcoming research would be to empirically test the framework. Further research<br />
could also suggest a suitable process for the design of an eBusiness model respectively for the evaluation<br />
of an eBusiness model.<br />
Acknowledgement<br />
This research has been sponsored by The Swedish Retail <strong>and</strong> Wholesale Development Council.<br />
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Using Goal Modelling to Evaluate Goals for eService Development<br />
in Government<br />
Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
Karlstad University, Sweden<br />
Monika.Magnusson@kau.se<br />
Marie-Therese.Christiansson@kau.se<br />
Abstract: Public eServices have had a fast spread during the last decade. While eServices could enable cost<br />
savings <strong>and</strong> improve customer service, the development may be costly <strong>and</strong> time-consuming, involving complex<br />
challenges such as business process redesign, changes in organisational culture <strong>and</strong> customer behaviour. Adding<br />
to the complexity is the hierarchy of goals for eServices at transnational, national <strong>and</strong> organisational levels.<br />
Earlier research emphasise the importance of alignment between an organisation’s use of information technology<br />
<strong>and</strong> its business goals. This complex structure of multi-level goals is often implicit <strong>and</strong> difficult to h<strong>and</strong>le in practice.<br />
The purpose of this study is to examine how goal modelling can be utilised to improve eService development<br />
in government by serving as a tool for evaluation of goals. In a case study of a Swedish municipality’s eService<br />
development project, we found goal modelling to be valuable for evaluating goal alignment between the municipality’s<br />
local action plan, the national action plan <strong>and</strong> the project plan for the EU project Smart Cities. Other benefits<br />
are e.g. the ability to detect missing or implicit goals <strong>and</strong> tasks <strong>and</strong> moreover to improve planning,<br />
management <strong>and</strong> evaluation of eService development. The recommendation is to use goal models <strong>and</strong> an<br />
‘alignment matrix’ to improve goal alignment <strong>and</strong> the overall goal quality.<br />
Keywords: goal modelling, eGovernment, eService alignment, evaluation<br />
1. Introduction<br />
The increase of public eServices has been rapid during the last decades. This development is heavily<br />
promoted at both EU <strong>and</strong> national levels as eServices accessible across the EU members states<br />
strengthen domains such as e-Identification, e-Procurement, e-Justice, e-Health, mobility <strong>and</strong> social<br />
security. (European Commission, 2010). Among the benefits for the public sector are cost savings<br />
<strong>and</strong> improved customer service (Schneider, 2003; Boyer et al., 2002). However, the development<br />
process may be complex <strong>and</strong> costly though it affects not only the information systems (IS) but also<br />
the business processes <strong>and</strong> the strategies of the organisation. Furthermore, both employees <strong>and</strong><br />
citizens need to be willing to use eServices in their regular operations for the benefits to arise. A clear<br />
underst<strong>and</strong>ing of the goals may facilitate a voluntary adoption of eServices. One success factor in<br />
eService development is therefore the ability for organisations to communicate how eServices contribute<br />
to citizens’ wellbeing <strong>and</strong> companies’ efficiency as well as the organisation’s own business<br />
performance (Christiansson, 2011).<br />
Adding to the complexity of eService development is the large bouquet of policies <strong>and</strong> goals at different<br />
levels. In EU member states, there are goals at the transnational level that should be met. There<br />
are also goals at the national level that at best are coherent with EU goals. In addition, each municipality<br />
has their own goals. To achieve goals at superior levels, there needs to be intentional dependencies<br />
where lower level goals can serve as means for higher level goals. Furthermore, eServices are<br />
often developed in projects meaning in practice that four levels of goals must be met <strong>and</strong> aligned.<br />
Goal modelling is an approach for capturing, expressing <strong>and</strong> making the goals in an organisation explicit,<br />
thereby facilitating communication <strong>and</strong> providing a basis for change. The purpose of this study<br />
is to examine how goal modelling can be utilised to improve eService development in government by<br />
serving as a tool for evaluation of the goals. The research question investigated is: What are the<br />
benefits of <strong>using</strong> goal modelling in evaluation of eService Development in Government?<br />
2. Literature review<br />
2.1 eGovernment<br />
eGovernment can be described as governments providing administrative processes as eServices for<br />
their customers (citizens, visitors, companies <strong>and</strong> other government agencies) through web sites; i.e.<br />
an instance of e-Commerce (Schneider, 2003). Customers interact with governments through the<br />
Internet to ask questions <strong>and</strong> get access to information <strong>and</strong> services (e.g. updated government regulations,<br />
official documents, applications etc. (Alsaghier et. al 2009). An eService is here defined as “all<br />
interactive services that are delivered on the Internet <strong>using</strong> advanced telecommunications, informa-<br />
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tion, <strong>and</strong> multimedia technologies” (Boyer et al., 2002:175). Among the providers’ benefits is that services<br />
can be offered at a lower cost <strong>and</strong> to a wider geographical market (Boyer et al., 2002).<br />
Well-structured <strong>and</strong> effective business processes are a prerequisite for providing <strong>and</strong> performing<br />
eServices. However, business process improvements require a methodical approach (Becker et. al<br />
2003). Boyer et al. (2002: 176) stress the importance that “eServices must be carefully planned <strong>and</strong><br />
implemented in order for eServices to become a valuable <strong>and</strong> strategic channel”.<br />
2.2 Strategic alignment of eService<br />
Bleistein et al. (2006b) emphasise the importance of alignment between an organisation’s use of IT<br />
<strong>and</strong> its business strategy. In addition, alignment between business processes <strong>and</strong> IT is a challenge<br />
<strong>and</strong> success factor in eGovernment projects (Melin <strong>and</strong> Axelsson, 2009). In order to align business<br />
strategy <strong>and</strong> IT (e.g. eServices), systems requirements <strong>and</strong> solution specifications for IT must be<br />
aligned with business processes (e.g. goals, actions, business logic <strong>and</strong> customers) in order to support<br />
business performance (Christiansson <strong>and</strong> Christiansson, 2006). Organisations foc<strong>using</strong> more on<br />
the “e” then on the ”business” may forget about the value added idea (Davenport, 1993) as an essential<br />
prerequisite for an organisation’s return on its investments into IT (Alpar <strong>and</strong> Olbrich, 2005). Unfortunately,<br />
Melin <strong>and</strong> Axelsson (2009:254) found a weak alignment between business processes <strong>and</strong> IT<br />
in their study <strong>and</strong> give some examples of eGovernment challenges, i.e. “…the size of project, the<br />
diversity of users, <strong>and</strong> organizations involved. Alignment between organizational goals <strong>and</strong> an ISD<br />
(IT) project, IO perspective, the existence of multiple, <strong>and</strong> partially conflicting goals.” To be able to<br />
validate the alignment between business goals <strong>and</strong> the use of IT, there is a need for requirement engineering<br />
methods that encompass the business strategy. However, Bleistein et al. (2006b) claim that<br />
this is not usually the case in requirement engineering approaches. Also Österle (1995) <strong>and</strong> Nilsson<br />
(1999) emphasise the importance of developing business strategies, business processes <strong>and</strong> IS/IT in<br />
a holistic manner. The key issue is thus to decompose business goals in a way that facilitates the<br />
design of business processes <strong>and</strong> IT solutions, this may be accomplished by goal modelling.<br />
2.3 Goal modelling<br />
A goal is here defined as a desired state or condition that the organisation wants to achieve (Andersson<br />
et al., 2008). Morasky (1977:89) conclude; “goals should serve to facilitate the evaluation of system<br />
effectiveness <strong>and</strong> the control of system behaviour. In order to provide this facilitation, goals must<br />
be specific, manifest, focus on the receiving system <strong>and</strong> include a time dimension.” By specific means<br />
that the goal should be clear <strong>and</strong> unambiguous because: “A vague, nonspecific goal is of little use to<br />
the system analyst or planner because any number of outputs can be constructed as appropriate to<br />
goal attainment. In order to make a goal optimally useful for evaluation, the statement of the goal<br />
must be painfully specific” (Morasky, 1977:87). Every organisation has a large number of formal <strong>and</strong><br />
informal goals that guide its operations. Ideally, one goal is ranked as the overall goal that all other<br />
goals should contribute to. However, in reality, goals may be irrelevant, conflicting or lack a plan for<br />
achieving them. It is essential to clarify, discuss <strong>and</strong> manifest which goals that should guide the operations<br />
of the organisation, i.e. to analyze <strong>and</strong> communicate the goals. Goal modelling is an approach<br />
to capture <strong>and</strong> make the goals of an organisation explicit (Andersson et al. 2008). A goal<br />
model is typically represented graphically as an organised, <strong>and</strong> often tree-formed, structure of goals<br />
where a goal (end) is broken down into sub-goals that serve as means for reaching the end (Kavakli,<br />
2004).<br />
2.3.1 Goal categories <strong>and</strong> structures<br />
Goals can be classified as soft goals (visions or abstract goals), hard goals (objectives or quantitatively<br />
measurable goals) or tasks (actions) aimed at fulfilling goals (Bleistein et al., 2006b; Gordijn et<br />
al., 2006). Soft goals are qualitative <strong>and</strong> not possible to measure quantitatively in contrast to hard<br />
goals. To get clear-cut criteria for achievement, soft goals need further refinement (Gordijn et al.,<br />
2006). This refinement is achieved by specifying soft goals into hard goals <strong>and</strong> tasks. Tasks are<br />
courses of action carried out to achieve goals (Gordijn et al., 2006).<br />
In practice, goals are expressed <strong>and</strong> designed at different organisational levels. Österle’s (1995) <strong>and</strong><br />
Nilsson’s (1999) ‘three level model’ illustrates how an interplay between changes in business strategies,<br />
business process <strong>and</strong> IS/IT takes place, or should take place, see Figure 1. In IT-based innova-<br />
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tions, such as eServices, the strategy level corresponds to providing services, the (operative) process<br />
level corresponds to the performance <strong>and</strong> the system level to delivering services.<br />
Figure 1: The three level model (Österle, 1995; Nilsson, 1999).<br />
2.3.2 Goal modelling – some rationales<br />
Soft goals <strong>and</strong> visions found in government policies or regulations are not directly achievable. Rather,<br />
they are “achieved through a network of intentional dependencies” (Gordinj et al.,2006:27). Goal<br />
modelling is utilised to plan, reveal, analyse or evaluate these dependencies between goals. Ideally<br />
the goal models should enlighten why different organisational goals exist <strong>and</strong> how business processes,<br />
<strong>and</strong> tasks fulfil the goals. Goal modelling enables the discovery of ‘logical holes’ i.e. soft goal<br />
without measurable (hard) goals or tasks to fulfil them or, vice versa, planned actions without a clear<br />
relationship to goals. Mapping of goals is therefore a natural step during the analysis of the current<br />
(as-is) situation as well for the desirable (to-be) situation. Goal modelling is also vital for underst<strong>and</strong>ing<br />
organisational problems <strong>and</strong> suitable solutions, <strong>and</strong> thereby possible to use both in the design <strong>and</strong><br />
evaluation of eServices. Gordijn et al. (2006:26): claim that “Software engineers must first underst<strong>and</strong><br />
an eService before they can build effective systems to support it. That means underst<strong>and</strong>ing [...] the<br />
enterprise’s goals <strong>and</strong> intentions”. In an eGovernment setting, goal modelling can also be utilised to<br />
ensure that local goals are in line with transnational <strong>and</strong> national goals.<br />
2.3.3 Goal modelling techniques<br />
There are different approaches to goal modelling. Typically, a preliminary set of goals are first identified<br />
<strong>and</strong> listed before their interrelationships are analysed, although the process is iterative in character.<br />
When analysing interrelationships between goals, new goals are often identified. Subsequently,<br />
the identification of goals could result in the decomposition of one goal into several others. Soft goals<br />
(visions), hard goals <strong>and</strong> tasks can be decomposed into sub elements such as other soft goals, hard<br />
goals, tasks or resources. The sub elements thus contribute to the higher level elements, see Figure<br />
2. Kavakli (2004) claims that asking ‘how-<strong>and</strong>-why-questions’ can refine goals <strong>and</strong> goal models. That<br />
is, by reflecting on why a goal or task exists it is possible to find higher-level elements <strong>and</strong> by asking<br />
how the element should be made operational it is possible to reach more refined means. As shown in<br />
Figure 2, with the AND-decomposition link, sometimes a combination of tasks is needed to fulfil a<br />
hard goal. Subsequently a task or a hard goal can be achieved be one of many alternatives tasks (the<br />
OR-decomposition link).<br />
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Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
Figure 2: Goal model structure adapted from Bleistein et al. (2006a: 847)<br />
3. Methodology<br />
A case study of an eService project in Karlstad municipality was undertaken. Karlstad has approximately<br />
85 000 citizens <strong>and</strong> 7000 employees. The studied eService project took part in a wider collaboration<br />
of the Interreg IVB North Sea Region Programme; the Smart Cities project<br />
(www.smartcities.info). The local project owner was the municipality’s IT department. The goal analysis<br />
was performed in the spring of 2009 <strong>and</strong> was limited to official <strong>and</strong> documented goals. The research<br />
strategy was what Kavakli (2004) describe as an expert-analytical approach with a ‘analyse<br />
existing document strategy’. Data were first gathered via official documents such as policy documents,<br />
action plans, project plans <strong>and</strong> website information. Next, these elements were structured into<br />
graphical goal models according to the structure in Figure 2 to illustrate decomposition links <strong>and</strong> contribution<br />
links between elements at different levels. The authors’ individual classifications <strong>and</strong> goal<br />
structures were then compared, analysed <strong>and</strong> aligned until there was consensus. Next, the goal models<br />
were discussed <strong>and</strong> further analysed with the municipality’s project manager <strong>and</strong> an IT-architect at<br />
the IT department at the municipality during two workshops. Some changes in interrelationships between,<br />
<strong>and</strong> formulations of, goals were performed during an iterative process in an email conversation<br />
until there was an agreement. The final report was sent to the local project manager, <strong>and</strong> presented at<br />
the Smart Cities Steering Committee in June 2009.<br />
4. The municipality case –a goal modelling example<br />
An extract from the goal analysis is presented in the paper in order to state some examples of our<br />
findings. The transnational level was excluded from our example but is analyzed in the same way.<br />
Only manifested, i.e. explicitly stated goals were used. The goals were analyzed in terms of inter-level<br />
alignment (goal contribution between levels) <strong>and</strong> intra-level alignment (goal contribution at the same<br />
level) by asking questions such as; “Does goal B contribute to goal A?” <strong>and</strong> “Can goal B be considered<br />
as a refinement or decomposition of goal A?” Also in some documents, goals were explicitly<br />
decomposed into sub-goals (as in Table 1). Moreover, the overall quality of the goals in terms of clarity,<br />
scope etc. (c.f. Morsaky, 1977) are discussed. The formulations in the original documents are<br />
used in the tables although translated into English in Table 1 <strong>and</strong> 2.<br />
4.1 Goals at the national level<br />
At the national level, the primary policy document was the “Action plan for eGovernment – New<br />
grounds for IT-based business development in Public Administration” (Regeringskansliet, 2008). The<br />
action plan was constructed in 2008 <strong>and</strong> the overall goal to be implemented in 2010 was that the administration<br />
should be “as simple as possible for as many as possible” (NG1). Four sub-goals for prioritized<br />
policy areas are also presented; see Table 1.<br />
4.2 Goals at the municipal level<br />
At the time of the project the essential document guiding the municipality’s eService development was<br />
the “Action plan <strong>and</strong> goals for eGovernment 2009-2011”. The stated goals are presented in Table 2.<br />
Among the actions mentioned in documents are the eService projects, a study of customers’/citizens’<br />
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Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
needs, a citizen panel, <strong>and</strong> a citizens’ survey, development of channel strategies <strong>and</strong> mapping of<br />
business processes. The latter is also specified into further actions that need to take place during the<br />
mapping. An internal organisation, an ‘e-office’, which supports the different departments in their development<br />
of eServices should further be created <strong>and</strong> a communication plan for external <strong>and</strong> internal<br />
communication developed. Tasks that are meant to fulfil each goal are not stated.<br />
Table 1: Goals at the national level (Regeringskansliet, 2008)<br />
Goal<br />
level &<br />
no.<br />
Goal statement Goal type Contributes<br />
to<br />
NG1 In 2010, it should be as easy as possible for as many people as possible<br />
to exercise their rights <strong>and</strong> fulfil their obligations <strong>and</strong> take part of govern-<br />
ment service.<br />
NG2 The authorities have regulations that allow inter-organisational collaboration<br />
for e-governance <strong>and</strong> effective information h<strong>and</strong>ling that makes information<br />
easily accessible <strong>and</strong> useful, with regard to the privacy <strong>and</strong><br />
security.<br />
NG3 The authorities have the technical conditions that support eGovernment.<br />
An efficient, robust <strong>and</strong> future-proof electronic communication infrastructure<br />
[is] promoted. The authorities have a security level that generates<br />
high confidence in e-governance. St<strong>and</strong>ardisation of concepts <strong>and</strong> information<br />
structures, interfaces for electronic services <strong>and</strong> electronic communication,<br />
etc. builds on the authority’s or the sector's total needs <strong>and</strong> in<br />
conformity with international st<strong>and</strong>ards<br />
NG4 The systems for business support that is common for several authorities<br />
are harmonised <strong>and</strong> automated at an appropriate level in order to avoid<br />
unnecessary costs <strong>and</strong> increase the overall productivity. The employees<br />
have the necessary skills to monitor <strong>and</strong> enforce development. The government’s<br />
overall IT costs are followed up regularly.<br />
NG5 Citizens <strong>and</strong> enterprises can easily perform <strong>and</strong> track their err<strong>and</strong>s <strong>and</strong><br />
gain access to the administration's overall services <strong>and</strong> information.<br />
Overall<br />
goal<br />
quality<br />
Soft goal<br />
Soft<br />
goal(s)<br />
Soft<br />
goal(s)<br />
Soft<br />
goal(s)<br />
Soft<br />
goal(s)<br />
NG1 is the overall goal. However, it is not obvious how N1 were decomposed into NG2-NG5. A ‘midlayer’<br />
of sub goals to NG1 like “It should be easy to perform err<strong>and</strong>s that span different authorities”<br />
would clarify the relationships between NG1 <strong>and</strong> NG2 respectively NG4. NG5 is furthermore similar<br />
to N1. Notable is that all goals are soft goals. The clarity of the goals would improve if only one goal<br />
were h<strong>and</strong>led in each goal statement. At present, the focus of each goal statement is too wide <strong>and</strong> in<br />
coherent. Furthermore, the language is ambiguous (see for example NG2). The statements of the<br />
goals are thus far from “painfully specific” (see Morasky, 1977:87).<br />
Table 2: Goals at the municipal level (Karlstad kommun, 2008a)<br />
Goal<br />
level &<br />
no.<br />
Goal statement Goal<br />
type<br />
MG1 All services that the municipality offers <strong>and</strong> all the obligations that we<br />
impose on local residents to be executed, should be possible to conduct<br />
as eServices within five years, where it is feasible <strong>and</strong> economically<br />
justified. At the end of 2011, 35 new eServices should have been created.<br />
MG2 We shall always start from the citizens’ or the businesses’ needs when<br />
planning the provision of eServices.<br />
MG3 EServices should be designed so that it becomes as easy as possible<br />
for citizens to use them.<br />
MG4 All forms should be digital. In the long run, they should also be possible<br />
to submit <strong>and</strong> sign electronically.<br />
MG5 Safe <strong>and</strong> reliable login shall be available to all municipal residents over<br />
Overall<br />
goal<br />
quality<br />
Hard<br />
goal(s)<br />
NG1<br />
NG1<br />
NG1<br />
NG1<br />
Contributes<br />
to<br />
NG1, NG5<br />
Soft<br />
goal<br />
MG3<br />
Soft<br />
goal<br />
NG1<br />
Hard<br />
goal(s)<br />
MG1, NG1<br />
Soft NG3 (MG1 &<br />
the age of 15 <strong>and</strong> for all businesses.<br />
goal MG3)<br />
Unclear whether there is an overall municipal goal for eServices <strong>and</strong> how the goals contribute to<br />
each other (unclear goal structure). High alignment with national goal (NG1, NG3 & NG5). MG1<br />
contain two goals where the last sentence is a sub-goal to the first sentence. Notable is also that two<br />
of the hard goals (MG1 & MG4) having ‘fuzzy’ features that make them less measurable in practice.<br />
316
4.3 Goals at the project level<br />
Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
In the project plan for the eService project, only four goals are explicit; see Table 3. However, a number<br />
of tasks or “issues that must be solved” are provided in the document. Among the mentioned<br />
tasks are that all eServices within the municipality need to be documented <strong>and</strong> categorised in a service<br />
catalogue <strong>and</strong> that a My Page solution, where the citizens <strong>and</strong> businesses can see all their err<strong>and</strong>s<br />
<strong>and</strong> personal information, should be created.<br />
Table 3: Goals at the project level (Karlstad kommun, 2008b)<br />
Goal<br />
level &<br />
no.<br />
Goal statement Goal<br />
type<br />
PG1 Safe <strong>and</strong> reliable login – for all citizens(older than 15 years) <strong>and</strong> com- Soft<br />
panies in the municipality<br />
goal<br />
PG2 Stored information in the Meta catalogue about person <strong>and</strong> company Hard<br />
information must be 100% correct. A quality check must be done to<br />
guarantee this.<br />
goal<br />
PG3 60% of all paper forms should be digital Hard<br />
goal<br />
PG4 75% of all err<strong>and</strong>s should be done through Internet (if it is possible to Hard<br />
use Internet for that kind of err<strong>and</strong>) – “My Account/My Page” will be an<br />
important part to fulfil these requirements<br />
goal<br />
PG5 35 new eServices should be created before the end of 2011 Hard<br />
goal<br />
Overall<br />
goal<br />
quality<br />
Contributes to<br />
MG5<br />
MG1, PG1<br />
MG4<br />
PG4, MG1<br />
Unclear whether there is an overall project goal <strong>and</strong> how the goals contribute to each other (unclear<br />
goal structure). High alignment with municipal goals (MG1, MG3 & MG4) although PG1 is identical<br />
to MG5 <strong>and</strong> PG5 is identical to parts of MG1. PG4 has to wide a scope <strong>and</strong> is therefore difficult to<br />
achieve within the project. Also PG5 is difficult to achieve within the project as it is the different<br />
departments, not the project, that decide if they want to develop eServices (c.p. Morasky’s statement<br />
that goals should focus on the receiving system). Moreover, PG4 contain both goal (end) <strong>and</strong><br />
task (mean). Also PG2, contain both goal <strong>and</strong> task. PG1, PG3 <strong>and</strong> also PG5 to some extent, lack<br />
tasks to fulfil them.<br />
4.4 Goal alignment in practice – a goal model<br />
In Table 1 to 3 alignments between goals at different levels are analyzed. Another way to analyze<br />
goals <strong>and</strong> clarify goal dependencies is by structuring them into goal models. The graphical representation<br />
enables a prompt overview of goals as a whole. A goal model over the goals at the municipal<br />
<strong>and</strong> the project level is shown in Figure 3. As shown in the figure, some goals, such as PG1 <strong>and</strong> PG3<br />
lack explicit tasks or a plan to fulfil them in the studied documents. Some of the goal statements are<br />
shortened to increase the readability. The municipal actions plan is here seen as a task to fulfil goals<br />
at national level, while the eService project is stated as a task in the municipality’s local actions plan<br />
for eGovernment. The notation from Bleistein et al. (2006a) has been extended with a symbol for ‘levels’<br />
to facilitate analysis of goals at different levels. Also a symbol for detecting identical goals was<br />
included; see the symbol legend in Figure 3.<br />
5. Conclusions<br />
5.1 Findings<br />
The purpose of this study is to investigate how goal modelling can be utilized to improve eService<br />
development in government by serving as a tool for evaluation. According to the case study, goal<br />
modelling facilitates an intentional <strong>and</strong> functional decomposition of goals. The ‘logical’ <strong>and</strong> complex<br />
chain of goals <strong>and</strong> means, from transnational to local level, may be clarified <strong>and</strong> improved. Ideally<br />
goals at lower levels are constructed to specify <strong>and</strong> contribute to goals at higher levels. Our study<br />
showed that the alignment between goals at different organizational levels in some cases where good<br />
but for other goals were weak or invisible. Overall, relatively few references were made to goals at<br />
superior levels in the studied documents. Goal modelling <strong>and</strong> analysis is thus valuable for identifying<br />
a lack of alignment between multi-level goals.<br />
317
Municipal level<br />
Develop an<br />
e‐office<br />
Project level<br />
A services catalogue<br />
should be created<br />
All services need to<br />
be documented<br />
<strong>and</strong> categorized<br />
Modell legend<br />
MG1. All services as e‐<br />
services within 5 years. 35<br />
new e‐Services until 2011<br />
PG5. 35 new e‐<br />
Services until 2011<br />
Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
MG5. Safe <strong>and</strong> reliable<br />
login for all citizens <strong>and</strong><br />
companies<br />
PG2. 100 % correct<br />
information in meta<br />
catalogue<br />
A quality check<br />
must be done<br />
MG4. All forms<br />
digital<br />
PG1. Safe <strong>and</strong> reliable<br />
login for all citizens <strong>and</strong><br />
companies<br />
Municipal<br />
action plan<br />
e‐Service project<br />
Develop channel<br />
strategies<br />
Mapping of<br />
business<br />
processes<br />
PG3. 60% of all<br />
paper forms<br />
should be digital<br />
MG3. E‐services<br />
should be designed<br />
to be easy to use<br />
Perform a needs’<br />
analysis<br />
PG4.75% of all err<strong>and</strong>s<br />
should be done through<br />
Internet<br />
A My Page<br />
citizens’ portal<br />
MG2. Start from the<br />
citizens’ <strong>and</strong> the<br />
businesses’ needs when<br />
planning e‐services<br />
Create a citizens’<br />
panel<br />
A My Page<br />
citizens’ portal<br />
Hard goal<br />
Soft goal Task<br />
Level boarder contribute to identical to Decomposition link<br />
Perform a<br />
citizens’ survey<br />
Figure 3: Goal model over goals at municipal <strong>and</strong> project level<br />
The benefits of <strong>using</strong> goal modelling are also that unclear, ambiguous, inadequate, unrealistic or misplaced<br />
goals can be identified, discussed <strong>and</strong> adjusted. Several goal at all three studied levels were<br />
difficult to underst<strong>and</strong> <strong>and</strong> interpret as they either contained several goals in one, or were fuzzy in<br />
nature; this complicates the fulfilling of the goals. Some goals were also found to be identical which is<br />
problematic as it may result in an ambiguous situation regarding who has responsibility <strong>and</strong> authority<br />
for achieving the goal, for assigning resources, carrying costs etc. Yet other goals were found to be<br />
hard if not impossible to achieve within the project as the target of the goals (see PG4 <strong>and</strong> PG5) were<br />
out of the ‘influential scope’ of the project. A possible solution is to reformulate the project goals to<br />
better fit the project’s authority or to change the projects ownership from the IT department to a higher<br />
organisational level. The latter was also decided shortly after our report was h<strong>and</strong>ed over.<br />
The perhaps most important benefit of goal modelling <strong>and</strong> analysis for eService development is its<br />
ability to facilitate the realization of goals <strong>and</strong> plans by visualising if <strong>and</strong> how goals <strong>and</strong> visions are<br />
decomposed into measurable objectives <strong>and</strong> concrete tasks. The case study revealed that several<br />
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Monika Magnusson <strong>and</strong> Marie-Therese Christiansson<br />
important soft <strong>and</strong> hard goals were missing or implicit in all the studied documents for a clear-cut argumentation<br />
from eService vision to necessary tasks to occur. This weakens the transparency <strong>and</strong><br />
ability to communicate rationales for eServices. Several goals were also missing tasks to fulfil them<br />
which hinder the achievement of desired effects. Furthermore, we found a large gap in the intentional<br />
dependencies between several goal decompositions that suggest that ‘in-between-goals’ are needed.<br />
The line of argumentation from vision-soft goal to measurable objectives to tasks was thus weak at all<br />
levels. This may result in insecurity among citizens <strong>and</strong> employees regarding why actions are taken<br />
<strong>and</strong> whether they are appropriate.<br />
There are obviously also disadvantages with <strong>using</strong> goal modelling <strong>and</strong> analysis for evaluation of<br />
eServices. Among these are that it may be a time-consuming <strong>and</strong> costly undertaking as in reality not<br />
only the goal documents but also the people developing <strong>and</strong> <strong>using</strong> these preferably should take part<br />
in the analysis.<br />
5.2 Recommendations<br />
We suggest that project manager <strong>and</strong> policymakers should start with identifying goals at superior<br />
levels <strong>and</strong> then create strong chains of ends-means structures down to concrete, suitable <strong>and</strong> sufficient<br />
actions (tasks). An early modelling <strong>and</strong> evaluation in terms of goal clarity, goal levels, goal dependencies<br />
<strong>and</strong> goal logic (relations between soft goals, hard goals <strong>and</strong> tasks) in an eService project<br />
may improve the project’s success rate <strong>and</strong> prevent problems later on as it facilitates the detection of<br />
missing or inappropriate goals or tasks, <strong>and</strong> a poor alignment between goals.<br />
To strengthen the alignment between goals, we suggest <strong>using</strong> an ‘alignment matrix’ inspired by the<br />
‘three level model’ (Österle, 1995; Nilsson, 1999) <strong>and</strong> our finding as a complementary to the goal<br />
model. Ideally, the point of departure is the transnational <strong>and</strong> national level followed by the municipality<br />
level illustrated in Table 4. An example from Karlstad municipality case, of how a strategic soft goal<br />
can be refined into goals <strong>and</strong> tasks for the operational process- <strong>and</strong> system level is shown. Note that<br />
the goal or task statements ideally first should be ‘quality checked’ for clarity, scope etc.<br />
Table 4: The ‘alignment matrix’ for eService development<br />
Goal<br />
level,<br />
type &<br />
no.<br />
Goal or task statement in the organisation Contributes<br />
to<br />
Strategy level<br />
MG1 All services that the municipality offers <strong>and</strong> all the obligations that<br />
we impose on local residents to be executed, should be possible to<br />
conduct as eServices within five years, where it is feasible <strong>and</strong><br />
economically justified.<br />
NG1, NG4,<br />
NG5<br />
Refined by or<br />
decomposed<br />
into<br />
PG1, PG2,<br />
PG3, PG5<br />
etc.<br />
Process level<br />
PG5 35 new eServices until 2011 MG1 T1 - Tn<br />
T1 Develop an ‘e-office’ PG5<br />
System level<br />
PG1 Safe <strong>and</strong> reliable login – for all citizens (older than 15 years) <strong>and</strong><br />
companies in the municipality<br />
The matrix will serve as a tool for evaluating the alignment between goals at different conceptual organisational<br />
levels; strategy, process <strong>and</strong> system level. The ‘alignment matrix’ together with an extended<br />
goal model (see Figure 3) will establish an approach for planning, managing <strong>and</strong> evaluating<br />
eService development. We believe that this approach will be helpful in communicating the rationales<br />
for eServices as well as for motivating actions both within <strong>and</strong> outside the organisation <strong>and</strong> moreover,<br />
for bridging the gap between business strategy, business processes <strong>and</strong> eService solutions. Most<br />
importantly, this approach will improve the organisation’s ability to show transparency, communicate<br />
eService rationales <strong>and</strong> to work in a result-oriented way.<br />
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320
Alignment in Enterprise Architecture: Investigating the<br />
Aspects of Alignment in Architectural Approaches<br />
Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
IT University of Göteborg, Sweden<br />
thanos.magoulas@ituniv.se<br />
aida.hadzic@gu.se<br />
ted.saarikko@ituniv.se<br />
kalevi.pessi@ituniv.se<br />
Abstract: The purpose of this paper is to take a first step in remedying the dearth of rational appraisal of<br />
approaches to Enterprise Architecture by closer examining a h<strong>and</strong>ful of guides <strong>and</strong> frameworks. Our ultimate aim<br />
in this inquiry is to provide knowledge about the various dimensions of enterprise architectures that dem<strong>and</strong><br />
alignment between its constitutionals parts. Therefore the efforts of our study were focused on elucidating the<br />
following issue: How are the various forms <strong>and</strong> aspects of architectural alignment treated by the investigated<br />
approaches to Enterprise Architecture? Due to the lack of commonalities between the assorted approaches, an<br />
independent metric is required. We therefore utilize the concept of alignment <strong>and</strong> analyze how the various forms<br />
<strong>and</strong> aspects of architectural alignment are treated by formalized approaches to Enterprise Architecture. This<br />
methodology was applied to the Zachman Framework, The Open Group Architecture Framework (TOGAF), the<br />
Extended Enterprise Architecture Framework (E2AF) <strong>and</strong> the Generalised Enterprise Reference Architecture <strong>and</strong><br />
Methodology (GERAM). Our investigation clearly demonstrates that: 1) Approaches to Enterprise Architecture<br />
provide guidance for socio-structural <strong>and</strong> functional alignment, but not for infological or socio-cultural alignment.<br />
2) The area of contextual alignment is described by all investigated approaches as being free from barriers in<br />
general <strong>and</strong> functional barriers in particular. Some – but not all – forms of contextual alignment are established<br />
through contractual agreements. 3) None of the investigated approaches discuss the mutual interdependence<br />
that exists between the various forms of alignment.<br />
Keywords: enterprise architecture, architectural alignment, Zachman framework, TOGAF, E2AF, GERAM<br />
1. Introduction<br />
The organizations of today are facing a world fraught with uncertainty. Increasingly capricious <strong>and</strong><br />
dem<strong>and</strong>ing consumers necessitate careful consideration in to which products or services to offer at<br />
any given time. Meanwhile, competition is no longer limited to a geographical region as corporations<br />
are able to vie for business on a global market. The traditional modus oper<strong>and</strong>i based on comm<strong>and</strong><br />
<strong>and</strong> control is no longer able to satisfy the needs of the modern enterprise in this brave new world of<br />
opportunism <strong>and</strong> innovation.<br />
It is clear that the modern organization needs a new blueprint in order to stay ahead of the game – or<br />
at the very least stay in the game. To this end, much attention has been paid to Enterprise<br />
Architecture over the past couple of decades – not just as a means to improve competitiveness, but<br />
also to reduce complexity, increase changeability, provide a basis for evaluation et cetera.<br />
A literary review by Schöenherr (2009) clearly shows that the level of interest in Enterprise<br />
Architecture is indeed increasing. Although rather limited in scope when originally coined by John<br />
Zachman (1987), the concept has since then been exp<strong>and</strong>ed <strong>and</strong> interpreted by academia as well as<br />
the private <strong>and</strong> public sectors. The different views on how to approach Enterprise Architecture are<br />
often documented <strong>and</strong> compiled into “guides” or “frameworks” which are intended to instruct<br />
practitioners in how to apply this concept to their organization. However, the numerous approaches all<br />
present disparate views on what exactly Enterprise Architecture entails <strong>and</strong> how it is best<br />
administered (Rood 1994, Whitman et al 2001, Sessions 2007, Schöenherr 2009). This essentially<br />
leaves the practitioner in the dark as the approaches offer virtually no common ground, no common<br />
language <strong>and</strong> no common orientation on which to base a comparison.<br />
The purpose of this paper is to take a first step in remedying the dearth of rational appraisal of<br />
approaches to Enterprise Architecture by closer examining a h<strong>and</strong>ful of guides <strong>and</strong> frameworks. Due<br />
to the lack of commonalities, we intend to utilize the concept of alignment as a metric. Alignment is<br />
said to describe the condition of IS/IT being in harmony with business needs (Henderson <strong>and</strong><br />
Venkatraman 1992). This would not only ensure full utilization of resources, but also drive synergic<br />
effects (Luftman et al 1996, Papp 2001) – a situation very much in conformity with the aims of<br />
Enterprise Architecture. Succinctly put, we wish to analyze following question: How are the various<br />
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forms <strong>and</strong> aspects of architectural alignment treated by the investigated approaches to Enterprise<br />
Architecture?<br />
2. Research methodology<br />
The approaches addressed in this paper are the Zachman Framework (Zachman 1987, Sowa <strong>and</strong><br />
Zachman 1992), The Open Group Architecture Framework - TOGAF (TOGAF 2009), the Extended<br />
Enterprise Architecture Framework – E2AF (Schekkerman 2006:a, 2006:b, 2006:c) <strong>and</strong> the<br />
Generalised Enterprise Reference Architecture <strong>and</strong> Methodology - GERAM (Bernus <strong>and</strong> Nemes<br />
1994, GERAM 2003). The first <strong>and</strong> second of these frameworks were elected due to their popularity,<br />
E2AF due to its explicit focus on the extended enterprise <strong>and</strong> GERAM due to its focus on<br />
customization.<br />
The study at h<strong>and</strong> has been conducted <strong>using</strong> the best, first-h<strong>and</strong> literary sources available. It is<br />
however possible that some documentation regarding these approaches is unavailable due to for<br />
instance intellectual property or fragmented documentation.<br />
Given the inherent difficulties in the comparison this paper seeks to carry out, the most meaningful<br />
approach would be to apply the approaches to actual organizational needs <strong>and</strong> practices. Therefore,<br />
as a baseline for our evaluation, this comparison will utilize the MIT1990s framework for<br />
organizational research (Morton 1991). Furthermore, we will exp<strong>and</strong> upon this model <strong>using</strong> research<br />
by (Dahlbom 1996, Magoulas <strong>and</strong> Pessi, 1998, Spanos et al 2002).<br />
2.1 Research model<br />
Our research model defines the realized architecture of an enterprise in five basic areas of interests.<br />
They are: (1) the area of goals, objectives <strong>and</strong> values, (2) the area of enterprise activities <strong>and</strong> their<br />
management, (3) the area of decisional rights <strong>and</strong> responsibilities, (4) the area of primary<br />
stakeholders <strong>and</strong> lastly, (5) the area of information systems <strong>and</strong> the corresponding ICT. These<br />
resources together define the information infrastructure of the enterprise.<br />
Figure 1: Model for research<br />
From the perspective of alignment, information systems <strong>and</strong> <strong>Information</strong> <strong>and</strong> Communication<br />
Technology (ICT) forms a natural centre as this area permeates all aspects of the enterprise. While<br />
information systems today tend to be computerized, the essential feature is its emphasis on proper<br />
procedure (Putnam 1966). If collectively viewed, the architecture of information systems defines those<br />
systems that provide the enterprise with information <strong>and</strong> services. These may be transactional,<br />
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Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
relational, informative, decisional or innovative in nature (Magoulas <strong>and</strong> Pessi, 1998). This area<br />
covers activities such as project planning, project management, modelling, architectural design <strong>and</strong><br />
simulation.<br />
2.2 Aligning the constitutional parts of an Enterprise Architecture<br />
The concept of alignment has been expressed in several ways. As a result, alignment is treated<br />
synonymously to the following ideas: (1) fit, (2) link, (3) harmony, (4) balance, (5) fusion, (6)<br />
integration, (7) relationship, (8) compatibility <strong>and</strong> (9) conformity (see for instance Avison et al 2004).<br />
However, within the context of informatics, the concept of alignment is given in terms of harmonious<br />
relationships between two areas of interest in general <strong>and</strong> the enterprise as a whole in particular. In<br />
the latter case, the alignment is called contextual <strong>and</strong> we discuss it briefly later on.<br />
A sense of socio-cultural alignment<br />
Whereas goals <strong>and</strong> objectives usually take the shape of a hierarchy, other aspects like values, norms,<br />
culture et cetera define the conditions under which this hierarchy is formed (Hedberg 1980, Langefors<br />
1975, 1986). The social organization should therefore not limit its concerns to profitability, but must<br />
also promote a favorable environment for the individuals that work towards collective goals (Ackoff<br />
1967, Hedberg 1980).<br />
Socio-cultural alignment is reflected in the harmonious nature of relationships between the areas of<br />
information systems <strong>and</strong> the areas of goals, objectives <strong>and</strong> values. The crucial assumption here is<br />
that information <strong>and</strong> knowledge is the glue that holds business <strong>and</strong>/or social communities together<br />
(Magoulas <strong>and</strong> Pessi, 1998). Such alignment can be defined as:<br />
Stakeholders Expectation (Time) = Delivered contributions (Time)<br />
The notion is to determine how shared values, mutual goal-commitments <strong>and</strong> collaborative behaviour<br />
are addressed within the enterprise. The soundness of the socio-cultural alignment may be expressed<br />
<strong>and</strong> assessed in terms of cultural feasibility, i.e. shared values <strong>and</strong> priorities, social feasibility, codetermination,<br />
shared visions, shared goals as well as continuity of mutual commitments.<br />
Furthermore, it is of profound interest to determine the manner in which the organization settles upon<br />
its common goals.<br />
A sense of functional alignment<br />
An enterprise activity may also be described as a process in that it involves a group of activities<br />
organised in such way as to produce a certain product or service. Thus, any form of process<br />
transforms a certain object from a certain state to another desired or expected state (McKenzie 1984).<br />
Processes require resources, tools, skills et cetera, which all require coordination. The need for<br />
coordination may further increase if there are interdependencies among several processes.<br />
Functional alignment is a state of harmonious relationships between the area of information systems<br />
<strong>and</strong> the area of activities <strong>and</strong> processes. The fundamental assumption here is that information <strong>and</strong><br />
knowledge are critical <strong>and</strong> in many cases strategic resources (Magoulas <strong>and</strong> Pessi, 1998). Such an<br />
alignment can be defined in the following manner:<br />
Required information capabilities (Time) = Available information capabilities (Time)<br />
The equation represents the essentials of Galbraith’s (1973, 1977) contingency theory, <strong>and</strong><br />
essentially expresses the necessity for the enterprise to satisfy its need for information in a timely<br />
manner.<br />
Any form of informational activity performed by the systems may be seen as a non-separated part of<br />
an enterprise activity. In several approaches, enterprise processes are treated as the "creator" as well<br />
as "user" of information. In other words, while the quality of information systems depends on the<br />
quality of enterprise processes, the quality of enterprise processes depends on the quality of<br />
information systems.<br />
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The dimension of functional alignment ultimately boils down to issues of co-ordinated development,<br />
i.e. how the development of the information systems has been synchronized with the development of<br />
enterprise processes. The soundness of functional alignment should therefore be based on process<br />
effectiveness; support, flexibility, inter-dependency, quality improvement, degree of required coordination,<br />
degree of required synchronisation <strong>and</strong> economy.<br />
A sense of socio-structural alignment<br />
Usually, decisional rights <strong>and</strong> responsibilities are the result of design rather than cultivation. This is<br />
either achieved through the decomposition of enterprise ends into a comprehensible structure of<br />
elementary task-based units (Simon 1962, 1969), or the integration of existing task-based units into a<br />
comprehensible structure of authority <strong>and</strong> responsibilities (Churchman 1971). At any moment in time<br />
the structure is expected to simultaneously satisfy expectations from society as well as systemic<br />
desirability (Checkl<strong>and</strong> 1981, Hedberg 1980).<br />
Socio-structural alignment defines <strong>and</strong> integrates the area of information systems with the area of<br />
power, i.e. sources of authorities <strong>and</strong> responsibilities. The crucial assumption here is that information<br />
<strong>and</strong> knowledge are significant sources of power (Magoulas <strong>and</strong> Pessi, 1998). Therefore the concept<br />
of “<strong>Information</strong> Politics” used by Davenport (1997) reflects the very same issues as socio-structural<br />
alignment. In any case, socio-structural alignment concerns the harmonious relationships between the<br />
structure of power <strong>and</strong> the information systems. Such alignment can be defined as:<br />
Established socio-structure = Accepted socio-structure<br />
A balanced equation means that the established socio-structure is accepted by the stakeholders of<br />
the enterprise. A misaligned socio-structure can manifest itself in terms of conflicts, alienation,<br />
absenteeism, et cetera (Hedberg 1980, Davenport 1997). However, this form of alignment is impacted<br />
by the requisites of comprehensibility. A lack of comprehensibility leads to inability to manage both<br />
processes <strong>and</strong> information. Therefore, rather than technological sophistication, the requisite of<br />
simplicity (<strong>and</strong> efficiency) of processes should dominate the structuring of the enterprise.<br />
Furthermore, the structure of information-flows should map the boundaries of responsibilities.<br />
Unclear, complex <strong>and</strong> incomprehensible information structures lead to loss of manageability. There is<br />
a broad consensus regarding the various models that promote or inhibit the socio-structural<br />
alignment. Among the more commonly referenced are: Business monarchy, IT-utopia, federalism,<br />
feudalism, dualism <strong>and</strong> anarchism (Davenport 1997, Weill et al. 2006, Boddy 2009).<br />
A sense of infological alignment<br />
The stakeholders are the backbone of all organisations. They may be executives, employees, support<br />
staff, customers, suppliers, shareholders, local communities or other groups concerned with the<br />
enterprise. The stakeholders are the source of knowledge <strong>and</strong> experience as well as conflict due to<br />
their individuality. Since individuality may clash with the participatory nature of systems one might<br />
describe the most significant qualities of stakeholders in terms of collaboration, communication <strong>and</strong><br />
commitment (Ackoff 1967, Checkl<strong>and</strong>, 1981).<br />
Infological alignment reflects the harmonious relationships between the area of information systems<br />
<strong>and</strong> the area of the individual stakeholders. The basic assumption in this case is that information is<br />
knowledge communicated through our language (Langefors 1975, 1986).<br />
Infological alignment expresses the requisites for locality, comprehensibility <strong>and</strong> meaningfulness.<br />
Cognitive distance, working styles, decision styles, communicative styles <strong>and</strong> perspectives can be<br />
seen as significant factors for the actors’ willingness to use <strong>and</strong> accept the information systems. Such<br />
alignment can be expressed as:<br />
Required information = Provided information + extra information<br />
However, information is knowledge communicated through the use of data. Accordingly, infology<br />
comprises different approaches to further sound communication. Yet communicating information<br />
outside its natural (local) boundaries can be problematic (Langefors 1975, 1986, Hugoson 1989,<br />
1990, Magoulas <strong>and</strong> Pessi, 1998). In many cases the communication of information requires<br />
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additional information. Furthermore, the value of information <strong>and</strong> information systems depend entirely<br />
on the effects that these tools have on the individual <strong>and</strong> his social surrounding.<br />
Not all kinds of information can be universally communicated. The globalisation of information should<br />
receive specific treatment <strong>and</strong> should be established through negotiation (Hugoson 1989). <strong>Information</strong><br />
systems should support the learning processes that take place within the functions of the<br />
organisation. Hence, st<strong>and</strong>ard operating procedures should be avoided as much as possible –<br />
especially in dynamic environments. Lastly, the goodness of infological integration can be measured<br />
in terms of infological completeness; that is to say a clear <strong>and</strong> unequivocal underst<strong>and</strong>ing of means<br />
<strong>and</strong> ends. A state of infological alignment can thus be demonstrated when information conforms to<br />
the tacit knowledge of actors in terms of validity, functionality <strong>and</strong> relevance (Langefors 1975, 1986,<br />
Mendelson 2000, Argyris 1980, Hewitt 1986, Ackoff 1967, Simon 1962, 1969).<br />
A sense of contextual alignment<br />
Contextual alignment concerns the harmonious relationships between the enterprise as a whole, its<br />
information systems <strong>and</strong> its external environment. The concerned relationships have only an indirect<br />
impact on the information systems <strong>and</strong> the different areas of interests. These areas may at first<br />
glance seem unrelated, but since the flow of information permeates the organization, it is necessary<br />
to be mindful of the subtle manner in which different areas influence one another. Contextual<br />
alignment also includes the enterprise’s boundaries as well as its interaction with its environment<br />
(Tichy, 1983). Although it may be difficult (or even impossible) for the organization to affect any change<br />
beyond the limits of its enterprise areas, one should be mindful of opportunities <strong>and</strong> impediments as<br />
they are usually the impetus for organizational change. Such alignment can be defined as:<br />
Expected enterprise behavior = Observed enterprise behavior<br />
Those factors that relate to the indirect interaction between organizational areas as well as<br />
environmental circumstances are critical to attaining contextual alignment.<br />
3. A comparative analysis of approaches<br />
The tables below express the manner in which the investigated approaches address the various<br />
aspects of the various forms of alignment. In this sense, a clear view of alignment denotes that the<br />
covered aspects are well understood <strong>and</strong> in harmony with the expectations of the stakeholders,<br />
whereas an unclear view depicts a fuzzy or incomprehensible state of alignment.<br />
3.1 Socio-cultural alignment<br />
The socio-cultural alignment reflects a harmonious contribution of the information systems & ICT to<br />
the ever changing expectations of the internal as well as external stakeholders of the enterprise. In<br />
many cases, the lack of socio-cultural guidelines can be attributed to the underlying paradigms of the<br />
investigated approaches. That is to say, some approaches presuppose that information resources<br />
should be treated as independent of organization <strong>and</strong> culture.<br />
Table 1: View of the socio-cultural alignment<br />
View of the<br />
socio-cultural<br />
alignment<br />
Clear<br />
Unclear<br />
ZACHMAN TOGAF GERAM<br />
Insufficient guidance<br />
regarding relationship<br />
between IS <strong>and</strong> ICT to<br />
objectives of planner<br />
<strong>and</strong> owner.<br />
Insufficient details<br />
offered regarding<br />
“maximum<br />
enterprise<br />
benefits”.<br />
325<br />
Alignment based on<br />
requirements of IT<br />
<strong>and</strong> business rather<br />
than objectives.<br />
E2AF<br />
Collective needs of<br />
the extended<br />
enterprise should be<br />
satisfied, but little<br />
practical guidance.
Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
3.2 Sociostructural alignment<br />
The socio-structural alignment reflects a harmonious situation where the information systems & ICT<br />
capabilities are characterized by a clear, comprehensible, <strong>and</strong> accepted form of authority <strong>and</strong><br />
responsibility. The fuzziness of structural alignment is derived from the propensity of approaches to<br />
describe the area of authority <strong>and</strong> responsibilities rather than the relationships between the concerned<br />
area <strong>and</strong> its relationship to area of information systems. Another source of misgivings is the paradigm<br />
underlying each one of investigated approaches. Some approaches presuppose that information<br />
resources should be treated as independent of organization <strong>and</strong> structure.<br />
Table 2: View of the socio-structural alignment<br />
View of the<br />
sociostructural<br />
alignment<br />
Clear<br />
Unclear<br />
ZACHMAN TOGAF GERAM<br />
Insufficient or<br />
missing guidance<br />
regarding the areas<br />
of authority <strong>and</strong><br />
responsibilities with<br />
the areas of IS &<br />
ICT.<br />
Based on governance<br />
contracts, IT<br />
responsibility, Data<br />
trustee, Ownership of<br />
common app.<br />
Insufficient guidance<br />
regarding the<br />
relationship between<br />
the area of<br />
responsibility <strong>and</strong> the<br />
business objectives.<br />
View of<br />
responsibilities &<br />
roles of functional<br />
areas.<br />
Insufficient<br />
guidance regarding<br />
harmonization of<br />
control over<br />
operations with the<br />
capabilities of IS &<br />
ICT.<br />
E2AF<br />
Offers guidance<br />
based on level of<br />
influence of<br />
concerned<br />
stakeholders.<br />
3.3 Functional alignment<br />
The functional alignment concerns the harmonious contribution of available information systems &<br />
ICT capabilities to the information, service, transactions, <strong>and</strong> relations required by either the business<br />
processes or business units of the enterprise. Some forms of obscurity or incomprehensibility are<br />
based on the fact that the approaches refer to the architecture of just one information system that<br />
serves the whole enterprise <strong>and</strong> its surroundings. Another cause for doubt is due to the fact that the<br />
investigated approaches describe a constitutional areas of enterprise (in this case processes) rather<br />
than the relationships to other areas.<br />
Table 3: View of the functional alignment<br />
View of the<br />
functional<br />
alignment<br />
Clear<br />
Unclear<br />
ZACHMAN TOGAF GERAM<br />
Insufficient guidance<br />
regarding business<br />
processes <strong>and</strong> the<br />
area of information<br />
<strong>and</strong> ICT.<br />
Alignment ensured<br />
by operational<br />
contracts between<br />
customers of <strong>and</strong><br />
providers.<br />
Insufficient guidance<br />
on how services are<br />
integrated into<br />
business processes<br />
<strong>and</strong> subsequently<br />
implemented.<br />
326<br />
Harmonization<br />
between required IS<br />
services <strong>and</strong><br />
provided IS services.<br />
Insufficient guidance<br />
regarding the<br />
modelling of the<br />
various entities of an<br />
enterprise.<br />
E2AF<br />
Alignment between<br />
business processes<br />
& IS ensured<br />
through basic<br />
principles.
3.4 Infological alignment<br />
Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
The infological alignment concerns the sound use of the available information systems & ICT<br />
capabilities to support <strong>and</strong> satisfy the required informational, service, transactional <strong>and</strong> relational<br />
needs of human stakeholders. In many cases, the infological doubtfulness can be explained in terms<br />
of the paradigm underlying each one of investigated approaches. That is to say, some approaches<br />
presuppose that the meaning of information should be independent of human interpretation since<br />
“facts are always facts”.<br />
Table 4: View of the infological alignment<br />
View of the<br />
infological<br />
alignment<br />
Clear<br />
Unclear<br />
ZACHMAN TOGAF GERAM<br />
Insufficient guidance<br />
regarding how<br />
information<br />
requisites such as<br />
quality, availability,<br />
comparability,<br />
consistency, etc. are<br />
treated.<br />
3.5 Contextual alignment<br />
Insufficient guidance<br />
of to avoid<br />
information paradox<br />
<strong>and</strong> still promote<br />
sharing <strong>and</strong><br />
availability of data.<br />
Insufficient guidance<br />
on how to align<br />
stakeholders to IS<br />
<strong>and</strong> ICT.<br />
Insufficient guidance<br />
on aligning human<br />
capabilities, mental<br />
models, etc <strong>and</strong> IS<br />
capabilities.<br />
E2AF<br />
Collective<br />
underst<strong>and</strong>ing<br />
established through<br />
communication<br />
between internal<br />
external<br />
stakeholders.<br />
The most essential property of contextual alignment is given in terms of harmony between the<br />
external <strong>and</strong> internal environments of the enterprise. The rise of new approaches to Enterprise<br />
Architecture merely expresses the goodness of architecture in terms of external (i.e. extrinsic) <strong>and</strong><br />
internal (i.e. intrinsic) values. Contextual harmony fills in the blanks with regards to the plurality of<br />
legal regulations, principles of intellectual property, plurality of languages used within the external <strong>and</strong><br />
internal environment of the enterprise et cetera.<br />
Table 5: View of the contextual alignment<br />
View of<br />
the<br />
contextual<br />
alignment<br />
Clear<br />
ZACHMAN TOGAF GERAM<br />
Alignment between EA<br />
<strong>and</strong> governance<br />
established through<br />
operational <strong>and</strong><br />
governance contracts.<br />
The enterprise must be<br />
aligned with regulations<br />
<strong>and</strong> laws <strong>and</strong> take<br />
intellectual property into<br />
consideration.<br />
327<br />
Securing architectural<br />
alignment between<br />
areas of enterprise by<br />
crossing functional<br />
barriers.<br />
Integration <strong>and</strong><br />
interoperability<br />
between the<br />
heterogeneous<br />
environments of<br />
enterprise.<br />
E2AF<br />
Approach<br />
advocates<br />
economic, legal,<br />
ethical <strong>and</strong><br />
discretionary<br />
viewpoints.<br />
Strong emphasis<br />
on external<br />
partners.
View of<br />
the<br />
contextual<br />
alignment<br />
Unclear<br />
4. Discussion<br />
Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
ZACHMAN TOGAF GERAM<br />
Insufficient guidance<br />
regarding how IS<br />
relates to the<br />
enterprise <strong>and</strong> its<br />
surrounding<br />
environment.<br />
Unclear guidance as<br />
to how the parts of<br />
the architecture fit<br />
together.<br />
Unsatisfactory<br />
guidance regarding<br />
how the architecture<br />
is aligned with the<br />
laws of humanity<br />
rather than the laws<br />
of nature.<br />
Framework does not<br />
cover issues of<br />
alignment between<br />
business & IT strategy.<br />
Insufficient guidance<br />
regarding how the<br />
alignment between EA<br />
& enterprise purposes<br />
is established.<br />
Scarce guidance<br />
regarding how the<br />
alignment between EA<br />
& its implementation is<br />
managed.<br />
Insufficient guidance<br />
regarding how the role<br />
of IS promotes the<br />
responsiveness of the<br />
enterprise to<br />
environmental<br />
changes.<br />
E2AF<br />
Lack of guidance<br />
regarding how to<br />
manage conflicting<br />
expectations <strong>and</strong><br />
viewpoints of<br />
partners.<br />
The common denominator of any enterprise architecture is given in terms of various forms of sound<br />
alignment between its constitutional parts. Thus, without alignment any sense of architecture<br />
disappears. Hence, the ultimate aim of our efforts was to improve the existing body of knowledge<br />
offered by the investigated approaches (frameworks, methods, reference models, et cetera). Each<br />
one of the concerned approaches provides system of concepts, principles, guidelines <strong>and</strong>/or values<br />
that is intended to support any effort in the process of designing, developing implementing <strong>and</strong><br />
evaluating an enterprise architecture that is capable of maintaining alignment between its<br />
constitutional parts. Thus, our focus has been to clarify how each one of the investigated approaches<br />
treats the issues associated with alignment. This section briefly discusses the manner in which the<br />
investigated approaches treat socio-structural, functional, infological, socio-cultural <strong>and</strong> contextual<br />
alignment.<br />
Firstly, the analysis of functional alignment demonstrates that three of the four approaches: TOGAF,<br />
GERAM <strong>and</strong> E2AF have a clear <strong>and</strong> strong reference to the different aspects of functional alignment.<br />
However the treatment of alignment provided by the Zachman framework approach is both unclear<br />
<strong>and</strong> weak.<br />
Secondly, the analysis of socio-structural alignment confirms that three of the four approaches:<br />
TOGAF, GERAM <strong>and</strong> E2AF have a clear <strong>and</strong> strong reference to the different aspects of structural<br />
alignment. Again, the approach to alignment provided by the Zachman framework approach is both<br />
doubtful <strong>and</strong> weak.<br />
Thirdly, the analysis of infological alignment shows that only one of the investigated approaches,<br />
namely E2AF, offers clear <strong>and</strong> strong guidance with regards to infological alignment. Accordingly, the<br />
approach to alignment provided by the three other approaches, the Zachman framework, TOGAF <strong>and</strong><br />
GERAM, was either doubtful or brief with few clear guidelines.<br />
Fourthly, the analysis of socio-cultural alignment shows that none of the investigated approaches<br />
provide strong <strong>and</strong> clear guidance with regards to socio-cultural alignment.<br />
Lastly, the analysis of the contextual alignment shows that three of the investigated approaches,<br />
TOGAF, GERAM, <strong>and</strong> E2AF, provide a comprehensive <strong>and</strong> strong view of alignment. However the<br />
Zachman framework does not provide sound guidelines.<br />
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Thanos Magoulas, Aida Hadzic, Ted Saarikko <strong>and</strong> Kalevi Pessi<br />
It also bears mentioning that the Sc<strong>and</strong>inavian school of thought carries with it explicit consideration<br />
of alignment between the hard & soft aspects (please see figure 2) of design in general <strong>and</strong> EA in<br />
particular. Yet practical examples of architectures that align hard <strong>and</strong> soft aspects can also be found<br />
within international companies such as Xerox (Howard 1992).<br />
Figure 2: The hard & soft aspects of the architecture<br />
5. Conclusions<br />
The primary aim of this inquiry has been: How are the various forms <strong>and</strong> aspects of architectural<br />
alignment treated by the investigated approaches to Enterprise Architecture? This issue has been<br />
investigated with respect to socio-cultural, socio-structural, functional, infological <strong>and</strong> contextual<br />
alignment. Our study has provided us with the following conclusions:<br />
Firstly, our investigation clearly demonstrates that approaches to Enterprise Architecture provide<br />
guidance for socio-structural <strong>and</strong> functional alignment, but less so for infological or socio-cultural<br />
alignment. A possible explanation may be that investigated approaches follow a paradigm that<br />
dem<strong>and</strong>s the independence of information <strong>and</strong> information systems from, cognitive, organizational<br />
<strong>and</strong> technological aspects, (as explained by Brancheau, J.C <strong>and</strong> Wetherbe, J.C, (1986)). Another<br />
interpretation of the same issue is that investigated approaches are derived from a tradition of<br />
engineering design rather than architectural design. This would account for the focus on requirements<br />
<strong>and</strong> constraints found in the “hard” aspects of the enterprise, rather than the “softer” aspects such as<br />
goals <strong>and</strong> decision making that characterizes architectural design.<br />
Secondly, the area of contextual alignment is described by all investigated approaches as being free<br />
from barriers in general <strong>and</strong> functional barriers in particular. Some – but not all – forms of contextual<br />
alignment are established through contractual agreements. This is presumably in response to the<br />
heterogeneity inherent to most environments. Some approaches explicitly mention the requisite to<br />
respect regulations <strong>and</strong> laws.<br />
Finally, none of the investigated approaches discuss the mutual interdependence that exists between<br />
the various forms of alignment. However, the architectural patterns of the enterprise are the result of<br />
organizational forces rather than rationality. This follows previous research by Mintzberg (1989).<br />
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331
eCitizen Satisfaction: The Case of eGovernment Websites<br />
Panagiotis Manolitzas 1 , Athanasios Vozikis 2 , Denis Yannacopoulos 3 <strong>and</strong><br />
Nikolaos Matsatsinis 1<br />
1<br />
Technical University of Crete, Chania, Greece<br />
2<br />
University of Piraeus, Greece<br />
3<br />
Technological Educational Institute of Piraeus, Aigaleo, Greece<br />
pmanol@gmail.com<br />
avozik@gmail.com<br />
dgian@teipir.gr<br />
Abstract: Governments across Europe face the challenge of responding to public dem<strong>and</strong> for more valuable,<br />
responsive, transparent, efficient <strong>and</strong> effective services. The scope of our research is to evaluate eGovernment<br />
services in Greece, analysing data of user satisfaction. Our research was conducted from March 1st, 2010 to<br />
June 20th, 2010. For the purposes of the research a web site was constructed <strong>and</strong> the users had the opportunity<br />
to answer a web based questionnaire <strong>and</strong> to express their satisfaction from The National Portal of Public<br />
Administration ‘Hermes’. The analysis of the data is based on the MUSA method. MUSA (Multicriteria<br />
Satisfaction Analysis) is an ordinal regression model which is based on the principles of multicriteria decision<br />
analysis. The analysis of data showed that the majority of users declared that they are satisfied from the<br />
eGovernment portal. In addition, our research, through the MUSA methodology, unveiled the quantitative global<br />
<strong>and</strong> partial user satisfaction levels <strong>and</strong> determined the weak <strong>and</strong> strong points of the web portal. Furthermore, the<br />
findings of our study will help governments to improve the effectiveness of their e-services <strong>and</strong> to develop more<br />
effective <strong>and</strong> valuable websites.<br />
Keywords: eGovernment, website evaluation, e-services, user satisfaction, multicriteria analysis<br />
1. Introduction<br />
Nowadays, all Governments across the world try to provide valuable services through the public<br />
sector to both citizens <strong>and</strong> businesses. E- Government gave the advantage to governments to<br />
achieve this goal. <strong>Information</strong> Technology is increasingly being viewed as a key component in<br />
improving the way the public sector provides services to citizens (Seneviratne, 1999). In Greece, the<br />
Operational Programme <strong>Information</strong> Society promotes the <strong>Information</strong> <strong>and</strong> Communication<br />
Technology (ICT) in the public sector. Electronic government (eGovernment) is the transformation of<br />
the public sector's organization <strong>using</strong> ICT in order to serve the citizen <strong>and</strong> the enterprises better<br />
(Terpsiadou & Economides 2009). Web portals, kiosks <strong>and</strong> mobile technologies were some of the<br />
emerging means of offering government services (Potnis 2010.).<br />
The scope of our research is to evaluate eGovernment services in Greece, analysing data of user<br />
satisfaction. Service quality is considered the main determinant of customer satisfaction (Speng &<br />
McKoy 1996). The importance of service quality evaluation through customer satisfaction<br />
measurement is reinforced by the necessity of adopting a continuous improvement philosophy <strong>and</strong><br />
underst<strong>and</strong>ing customer perception.<br />
Our paper is divided into 3 sections. In the first section we present the most common eGovernment<br />
types <strong>and</strong> their characteristics <strong>and</strong> we review many surveys that have been contacted for web sites<br />
evaluation. In the second section we present the methodology we used for the evaluation of the<br />
government portal. Finally, we describe the sampling process of the survey, the data analysis <strong>and</strong> the<br />
survey results.<br />
2. eGovernment- web site evaluation<br />
eGovernment is the use of information <strong>and</strong> communication technologies, <strong>and</strong> particularly the Internet,<br />
as a tool to achieve better government (OECD 2003). In other words, electronic Government provides<br />
the benefit of st<strong>and</strong>ardized services of information or even transactions, <strong>using</strong> electronic means <strong>and</strong><br />
mainly the Internet (Giannakopoulos & Manolitzas, 2009). Essentially, eGovernment concerns<br />
transactions that are related to the interactions of Public Administration (OECD 2003): (a) with citizens<br />
(Government to Citizens-G2C) providing services that are related to the submission of tax of income,<br />
the publication of certificates etc, (b) with businesses (Government to Businesses-G2B) providing<br />
services that are related to the submission of tax, contributions of social insurance, submission of<br />
statistical data, etc, <strong>and</strong> finally (c) with public services in a particular type of transaction (Government<br />
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Panagiotis Manolitzas et al.<br />
to Governement-G2G) the possibilities provided via the completed interconnection <strong>and</strong> the<br />
interdepartmental collaborations for communication among the public services. An additional category<br />
is government-to-employee, which is used to describe the connection that can be established among<br />
people within the government through the use of computers <strong>and</strong> the Internet (Blakemore & Dutton,<br />
2003; ESCWA 2003), which is also referred by (Evans & Yen 2006) as intra-government (Nagi &<br />
Hamdan 2009).<br />
Nowdays a crucial factor from the implementation <strong>and</strong> the development of an eGovernment project is<br />
the web site that will be constructed. Over the last ten years, all governments are trying to develop<br />
complex information systems in order to offer valuable electronic services to the citizens. The last five<br />
years many citizens prefer to communicate <strong>and</strong> interact with the central government via the<br />
government portals. In Greece the public sector created a centralized web portal (www.ermis.gov.gr)<br />
so as to the services provided to gain added value <strong>and</strong> to benefit users (citizens <strong>and</strong> enterprises). The<br />
governmental Portal provides through a central point completed briefing in the citizens <strong>and</strong> the<br />
enterprises with regard to all their transactions with the Public Administration (natural or electronic), as<br />
well as selected services of Electronic Transactions.<br />
During last years many web site evaluation methodologies have been proposed. For example many<br />
researchers used the servqual method (Parasuraman et al, 1988) in order to measure the quality of a<br />
website. Other researchers like Iwaarden et al (2004) presented a survey amongst students at<br />
Northeastern <strong>and</strong> Erasmus Universities in order to identify the most important quality aspects in the<br />
design <strong>and</strong> use of websites. The SERVQUAL model proposes a universal set of quality dimensions<br />
(tangibles, reliability, responsiveness, assurance <strong>and</strong> empathy), although there is some criticism for<br />
the results of this scale (Grigoroudis et al 2008). Another model that has been widely used is the<br />
EUCS (end-user computing satisfaction). This model has been tested <strong>and</strong> validated in various<br />
research settings. The results of this model have shown that end user computer satisfaction varied<br />
across cultures <strong>and</strong> may mean differently from one group to another (Deng et al, 2008). Also, other<br />
approaches have been developed for the evaluation of websites. These deal with site usability <strong>and</strong><br />
design, content, quality <strong>and</strong> user satisfaction. Huizingh (2000) determined how different groups of<br />
companies are actually <strong>using</strong> the Web <strong>and</strong> their sites are structured. To provide focus to his study, he<br />
developed a framework with two essential aspects of Web sites: content <strong>and</strong> design. He analyzed<br />
different groups of sites to gain underst<strong>and</strong>ing how the new tools are used by various companies. The<br />
research also showed that larger web sites seem to be richer <strong>and</strong> more advanced. Aladwani <strong>and</strong><br />
Palvia (2002) developed a multidimensional scale for measuring user-perceived web quality. The<br />
results of the two-phased investigation uncovered four dimensions of perceived web quality (technical<br />
adequacy, specific content, content quality, <strong>and</strong> appearance) <strong>and</strong> provided evidence for the<br />
psychometric properties of the 25-item instrument (Robbins & Stylianou 2003). On the other h<strong>and</strong><br />
Raquel (2001) used protocol analysis to measure the usability of a web site. For the purpose of this<br />
research about 15 usability principles <strong>and</strong> 3 evaluation parameters were used as a framework to<br />
analyze the verbal protocols of a sample of users. The results of the survey underscored the<br />
importance of two crucial usability goals for commercial web sites: clear path to products <strong>and</strong><br />
transparency of the ordering process. In this study will be used a multicriteria methodology in order to<br />
examine the users satisfaction from an electronic government site.<br />
3. The MUSA method<br />
The MUSA (Multicriteria Satisfaction Analysis) method is a multicriteria preference disaggregation<br />
analysis technique (Grigoroudis & Siskos 2002; Siskos et al 1998). Assuming that the customers’<br />
global satisfaction depends on a set of criteria representing service characteristic dimensions, the<br />
main objective of the MUSA method is the aggregation of individual judgements into a collective value<br />
function (Kyriazopoulos et al 2007). The method is an ordinal regression based approach used for the<br />
assessment of a set of collective satisfaction functions in such a way that the global satisfaction<br />
criterion becomes as consistent as possible with customers’ judgements (kyriazopoulos et al 2007).<br />
According to the methodology of the model the required data are collected via a questionnaire. The<br />
customer evaluates the provided services <strong>and</strong> expresses his/her judgements, namely their global<br />
satisfaction <strong>and</strong> his/her satisfaction with regard to the set of discrete criteria (Mihelis et al, 2001). A<br />
detailed presentation of the mathematical formula of the MUSA method can be found in (Grigoroudis<br />
& Siskos 2002, Siskos Yet al 1998).<br />
The MUSA model combines the weights <strong>and</strong> the average satisfaction indices in order to create the<br />
action diagrams (figure 1). These diagrams help the user or the decision maker to determine<br />
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Panagiotis Manolitzas et al.<br />
improvement actions. In addition, action diagrams indicate the strong <strong>and</strong> weak points of the<br />
customer satisfaction <strong>and</strong> define the required improvement efforts (Kyriazopoulos et al 2007). They<br />
also provide a form of gap analysis, since they show what the customer wants (importance) <strong>and</strong> gets<br />
(performance) (Grigoroudis & Arabatzis 2010). Action diagrams are divided into four sectors<br />
according to performance (high/low) <strong>and</strong> importance (high/low) that may be used to classify actions<br />
(Michelis et al 2001; Kyriazopoulos et al 2007; Arabatzis & Grigoroudis 2010; Grigoroudis et al 2008)<br />
a) status guo: no action is required, b) leverage opportunity: these areas can be used as advantage<br />
against competition, c) transfer resources: the resources of the company can be used effectively in<br />
another sector, d) action opportunity: this area indicates critical satisfaction dimensions that should be<br />
improved.<br />
Figure 1: Action diagram<br />
Apart from the action diagrams, MUSA application produces improvement diagrams (figure 2). As we<br />
analyzed before, action diagrams have the ability to indicate which dimension of satisfaction must be<br />
improved. However, they do not determine the result of the effort that must be made.<br />
Figure 2: Improvement diagram<br />
334
Panagiotis Manolitzas et al.<br />
Another disadvantage of action diagrams is that they do not inform how much efforts must be made<br />
for improvement to be achieved. This kind of problem is solved by improvement diagrams. More<br />
specifically, improvement diagrams take into account customers dem<strong>and</strong>ing level <strong>and</strong> are used in<br />
order to rank improvement priorities. Improvement diagrams are divided into quadrants according to<br />
dem<strong>and</strong> <strong>and</strong> effectiveness. Thus, priority should be given to satisfaction criteria having large room for<br />
improvement <strong>and</strong> needing little effort. Finally, satisfaction dimensions should rank last in terms of<br />
priority with low dissatisfaction level needing substantial effort to improve.<br />
4. Users satisfaction survey<br />
4.1 Satisfaction criteria<br />
The most important stage of the survey is the development of the questionnaire. The set of<br />
satisfaction criteria in this survey is based on bibliographical research. Grigoroudis et al (2008)<br />
introduced a questionnaire in order to measure the web site quality. We used some questions of this<br />
survey but we added more according to the needs of this survey. The questionnaire developed for the<br />
purpose of this study consists of two major parts. The first part investigates the users’ profile: 1)<br />
Gender (Male-Female), 2) Age (18-25, 36-45, 46-55, over 56), 3) Educational level (secondary<br />
education, higher education, Postgraduate/ dictatorate), 4) Income level (
4.2 Sample<br />
Panagiotis Manolitzas et al.<br />
The research was conducted from March 1 st , 2010 to June 20 th , 2010. For the purposes of the<br />
research a web site was developed. Through the web site the users had the opportunity to answer a<br />
web based questionnaire. The questionnaire had 18 questions <strong>and</strong> 130 questionnaires were collected<br />
from a r<strong>and</strong>om sample of users. The hierarchical structure of the set of criteria <strong>and</strong> sub-criteria about<br />
users’ satisfaction is presented in figure 3.<br />
The responders consisted of 71 women <strong>and</strong> 59 men. Most of the responders were young. More<br />
specifically, 104 responders were 18-25, 20 of them were 26-35, 5 were 36-45, <strong>and</strong> 1 responder was<br />
46-55. Analyzing the income level, the majority of responders (95) earn less than 700€ per month, 23<br />
questioned earn 701€-1400€, 7 of those surveyed earn 1401€-2000€, 2 earn between 2001€-3000€<br />
<strong>and</strong> 3 responders earn more than 3000€. Regarding the educational level 17 responders have<br />
graduated from secondary education, 94 of the responders holds a BSc degree <strong>and</strong> the rest 19 users<br />
holds an MSc degree or a PhD.<br />
4.3 Survey results<br />
4.3.1 Global satisfaction function<br />
This section refers to the results provided by the MUSA method. The functions of satisfaction<br />
constitute the most important results of MUSA, since they express the real value that users give in a<br />
determined level of satisfaction. Analyzing figure 4, it is obvious that the average global satisfaction<br />
index is very high (78,89) indicating that the users are very satisfied regarding the e-gov Portal. The<br />
added value curve for the global set of users is presented in figure 4. The added value curve has a<br />
concave appearance, revealing that the users are satisfied even if a small percent of their prospects<br />
is achieved. In addition the following figure shows the estimated value function given by the users to<br />
the provided service. For example the users who declared to be “Somehow Dissatisfied”, actually<br />
according to this value function they give a value of 65% to the provided services. This shows we are<br />
dealing with extremely non-dem<strong>and</strong>ing customers. If for example the users were neutral the given<br />
value for the above level of satisfaction scale would be less than 50%.The “Non-dem<strong>and</strong>ing<br />
customers” situation refers to the case of a concave value function; customers express that they are<br />
satisfied, although only a small portion of their expectations is fulfilled. (For more details please refer<br />
to (Grigoroudis & Siskos 2002).<br />
Figure 4: Global satisfaction function (added value curve)<br />
4.3.2 Main satisfaction criteria frequencies<br />
In table 1 we observe that the users are very satisfied considering the particular high output of web<br />
site in the criterion of content.<br />
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Table 1: Criteria weights <strong>and</strong> satisfaction indices<br />
Panagiotis Manolitzas et al.<br />
Criteria Weight Satisfaction Indices<br />
Content 36% 85,98%<br />
Navigation 25% 79,81%<br />
Structure & Design 19,5% 73,29%<br />
Appearance 19,5% 70,5%<br />
Global Satisfaction - 78,89%<br />
In addition, the users seems to be very satisfied from the criterion of navigation (satisfaction indices<br />
79,81%) but on the other h<strong>and</strong>, they do not attribute great importance to the others criteria like<br />
structure <strong>and</strong> appearance. The satisfaction indices of these criteria are very high but for the visitors do<br />
not attribute particular importance.<br />
4.3.3 Action diagram<br />
As presented in the previous section, the gap analysis in this study is based on the major results of<br />
the MUSA. Particularly <strong>using</strong> the previously presented weights <strong>and</strong> average satisfaction indices of all<br />
criteria a series of action diagrams may be developed in order to further study user’s satisfaction <strong>and</strong><br />
prioritize improvement actions In figure 5 we observe that the criterion of content <strong>and</strong> navigation<br />
belongs to the area of action opportunity. Therefore, in this criterion the web site developer must<br />
focus his/her efforts on improvement, so that it can be used as a competitive advantage. Besides, the<br />
criterion of Structure <strong>and</strong> Appearance is found in the area of ‘Status Quo’ <strong>and</strong> must be the second<br />
priority of the web developer.<br />
Figure 5: Action diagram<br />
4.3.4 Improvement diagram<br />
As we can observe from figure 6 (improvement diagram), improvement priorities of the web portal<br />
should focus on the appearance criterion.<br />
The criterion of appearance presents the highest effectiveness <strong>and</strong> simultaneously the smallest<br />
improvement. Consequently, we will get an improvement in terms of satisfaction paying little effort.<br />
Alternatively the improvement of content, Structure & design <strong>and</strong> navigation can be also considered<br />
due to the high effectiveness level or the low dem<strong>and</strong>ing level that users appear in these criteria.<br />
337
Figure 6: Improvement diagram<br />
5. Conclusions<br />
Panagiotis Manolitzas et al.<br />
In this survey we have made a first attempt to measure users’ satisfaction from an eGovernment<br />
portal in Greece <strong>using</strong> Multicriteria Analysis. In the future, the questionnaire must be updated with<br />
more questions. Furthermore, the same survey must run across different levels of ages, educational<br />
level in order to examine if there is a difference in satisfaction between these categories. Finally, the<br />
installation of a permanent user’s satisfaction barometer is an important extension. Through this<br />
barometer we will have the ability to track changes concerning users’ perceptions through a period of<br />
time.<br />
6. Appendix 1: Brief presentation of the Musa method<br />
The preference disaggregation model MUSA (MUlticriteria Satisfaction Analysis) assesses global <strong>and</strong><br />
partial satisfaction functions Y * *<br />
<strong>and</strong> Xi respectively, given customers’ judgments Y <strong>and</strong> Xi. Following<br />
the principles of ordinal regression analysis under constraints <strong>using</strong> linear programming techniques,<br />
the ordinal regression analysis equation has as follows:<br />
n<br />
⎧ ~ *<br />
* + −<br />
⎪Y<br />
= ∑ bi<br />
X i − σ + σ<br />
⎪ i=<br />
1<br />
⎨ n<br />
⎪<br />
⎪∑<br />
bi<br />
= 1<br />
⎩ i=1<br />
(1)<br />
~ *<br />
* *<br />
where Y is the estimation of the global satisfaction function Y X<br />
, i are the partial satisfaction<br />
+<br />
−<br />
functions, σ <strong>and</strong> σ<br />
b<br />
are the overestimation <strong>and</strong> the underestimation error, respectively, <strong>and</strong> i is<br />
the weight of the i-th criterion.<br />
100<br />
*m yj y j *2<br />
0<br />
Y j *<br />
σ j +<br />
y j 1 y j 2 y j m y j α<br />
σ j -<br />
* Yj 338
Panagiotis Manolitzas et al.<br />
Satisfaction function <strong>and</strong> error variables for the j-th customer<br />
*<br />
*<br />
It should be noted that Y <strong>and</strong> X i are monotonic functions normalised between 0 <strong>and</strong> 100 (see 0).<br />
Also, in order to reduce the number of the mathematical constraints the following transformation<br />
equations are used:<br />
⎪⎧<br />
z<br />
⎨<br />
⎪⎩ w<br />
m<br />
ik<br />
= y<br />
m+<br />
1<br />
= b x<br />
− y<br />
* k+<br />
1<br />
i i<br />
m<br />
− b x<br />
* k<br />
i i<br />
for<br />
for<br />
m = 1, 2, ..., α −1<br />
k = 1, 2, ..., α −1<br />
<strong>and</strong><br />
i<br />
i = 1, 2, ..., n<br />
According to the aforementioned definitions <strong>and</strong> the assumptions, the basic estimation model can be<br />
written in a linear program formulation, as it follows:<br />
M<br />
⎧<br />
+ -<br />
⎪[<br />
min]<br />
F = ∑σ<br />
j + σ j<br />
j=<br />
1<br />
⎪<br />
⎪under<br />
the constraint s<br />
⎪ j<br />
j<br />
n xi<br />
−1<br />
y −1<br />
⎪<br />
+ -<br />
⎪∑∑wik<br />
− ∑zm−σj+<br />
σ j = 0 for j = 1, 2, ..., M<br />
i=<br />
1 k = 1 m=<br />
1<br />
⎪<br />
α −1<br />
⎪<br />
⎨∑<br />
zm<br />
= 100<br />
⎪m=<br />
1<br />
⎪ n αi<br />
−1<br />
⎪∑∑wik<br />
= 100<br />
⎪ i= 1 k=<br />
1<br />
⎪z<br />
m ≥ 0,<br />
wik<br />
≥ 0 ∀ m, i <strong>and</strong> k<br />
⎪<br />
+ -<br />
⎪σ<br />
j ≥ 0,<br />
σ j ≥ 0 for j = 1, 2, ..., M<br />
⎪<br />
⎩<br />
where M is the number of customers, n is the number of criteria, <strong>and</strong><br />
which variables Xi <strong>and</strong> Y are estimated.<br />
, are the j-th level on<br />
The preference disaggregation methodology consists also of a post optimality analysis stage in order<br />
to face the problem of model stability. The final solution is obtained by exploring the polyhedron of<br />
near optimal solutions, which is generated by the constraints of the above linear program. This<br />
solution is calculated by n linear programs (equal to the number of criteria) of the following form:<br />
⎧<br />
⎪[<br />
] ′ = ∑<br />
⎪<br />
⎨<br />
⎪<br />
≤ +<br />
⎪<br />
⎪⎩<br />
− αi<br />
1<br />
max F wik<br />
for i = 1, 2, ..., n<br />
k=<br />
1<br />
under the constraint s<br />
*<br />
F F ε<br />
all the constraints<br />
of LP (3)<br />
where ε is a small percentage of F*. The average of the solutions given by the n LPs (4) may be taken<br />
as the final solution. In case of non-stability this average solution is less representative.<br />
The assessment of a performance norm may be very useful in customer satisfaction analysis. The<br />
average global <strong>and</strong> partial satisfaction indices are used for this purpose <strong>and</strong> can be assessed<br />
according to the following equations:<br />
S =<br />
α<br />
∑<br />
m=<br />
1<br />
p<br />
m<br />
y<br />
* m<br />
<strong>and</strong> s =<br />
i<br />
α<br />
i<br />
∑<br />
k=<br />
1<br />
p<br />
x<br />
k * k<br />
i i<br />
339<br />
* j<br />
xi y j *<br />
(2)<br />
(3)<br />
(4)<br />
(5)
Panagiotis Manolitzas et al.<br />
where S <strong>and</strong> si are the average global <strong>and</strong> partial satisfaction indices, <strong>and</strong> p m k<br />
<strong>and</strong> pi are the<br />
frequencies of customers belonging to the y m k<br />
<strong>and</strong> xi satisfaction level, respectively.<br />
References<br />
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Grigoroudis, E. <strong>and</strong> Siskos, Y. (2002) ‘Preference disaggregation for measuring <strong>and</strong> analysing customer<br />
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Grigoroudis, E., Litos, C., Moustakis, V., Politis, Y. <strong>and</strong> Tsironis, L. (2008) ‘The assessment of user-perceived<br />
web quality: Application of a satisfaction benchmarking approach’, European Journal of Operational<br />
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37, No. 3, pp 123-134.<br />
Iwaarden, T., Wiele, L., <strong>and</strong> Millen R. (2004) ‘Perceptions about the quality of web sites: A survey amongst<br />
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pp 947–959.<br />
Kyriazopoulos, P., Spyridakos, A., Grigoroudis, E., Siskos, Y., <strong>and</strong> Yannacopoulos, D. (2007). ‘The quality of eservices:<br />
Measuring satisfaction of internet customers, Operational Research: An International Journal’, Vol.<br />
7, No. 2, pp 233-254.<br />
Mihelis, G., Grigoroudis, E., Siskos, Y., Politis, Y. <strong>and</strong> Mal<strong>and</strong>rakis Y. (2001) ‘Customer satisfaction<br />
measurement in the private bank sector’, European Journal of Operational Research, Vol. 130, No. 2, pp<br />
347-360.<br />
Nagi, E. <strong>and</strong> Hamdan, M. (2009) ‘Computerization <strong>and</strong> eGovernment implementation in Jordan: Challenges,<br />
obstacles <strong>and</strong> successes’, Government <strong>Information</strong> Quarterly, vol. 26, pp 577-583.<br />
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the Greek Citizen Service Center (CSC)’, 2 nd International Conference on Methodologies, Technologies <strong>and</strong><br />
Tools enabling eGovernment, Corfu, Greece.<br />
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Quarterly, Vol. 27, No. 1, pp 41-48.<br />
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41−61). Hershey, PA: Idea Group Publishing.<br />
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340
Underst<strong>and</strong>ing the Impact of <strong>Knowledge</strong> Sharing in<br />
Organisations: A Case Study<br />
Magdeline Mashilo <strong>and</strong> Tiko Iyamu<br />
Tshwane University of Technology, Pretoria, South Africa<br />
Mashilom@tut.ac.za<br />
Iyamu@tut.ac.za<br />
Abstract: <strong>Knowledge</strong> is critical to employees’ effective <strong>and</strong> efficient performance <strong>and</strong> this manifest in the<br />
organisation’s performance at large. Unfortunately, knowledge gap amongst employees within organisations,<br />
including higher institutions of learning do exist. <strong>Knowledge</strong>able experts in different field are expected to share<br />
their knowledge with others to increase productivity, efficiency <strong>and</strong> effectiveness within the organisations. This is<br />
not necessarily the case, <strong>and</strong> it has begun to have a noticeable <strong>and</strong> deep-rooted impact on organisations. The<br />
study employed contingency theory to examine the impact <strong>Knowledge</strong> sharing on the organisation.<br />
Keywords: knowledge sharing, contingency theory, performance, organisation<br />
1. Introduction<br />
<strong>Knowledge</strong> sharing remains an important factor <strong>and</strong> process in many organisations including higher<br />
institutions of learning. Lin (2007:136) defines knowledge sharing as activities that encourage<br />
individuals <strong>and</strong> groups to work together, to facilitate exchange of their knowledge to foster continuous<br />
learning, <strong>and</strong> to increase the likelihood of achieving individual, group <strong>and</strong> organisational goals.<br />
For specific objectives <strong>and</strong> within context, knowledge is shared among individuals, groups <strong>and</strong><br />
organisations. According to Yan <strong>and</strong> Chen (2007:96), knowledge sharing comprises a set of<br />
behaviours about knowledge exchange which involves different actors. Kang et al. (2008:1550)<br />
argued that knowledge sharing results from social interaction that leads to knowledge exchange<br />
including transfer. Individuals <strong>and</strong> groups are only able to contribute to the objectives <strong>and</strong> goals of the<br />
organisation if they have the knowledge to do so. As is argued by Hsu (2008:1316), knowledge<br />
sharing within organisations cannot be regarded as having been successful if organisational<br />
performance is below average.<br />
<strong>Knowledge</strong> sharing is not as easy as we are made to believe. There are challenges which could<br />
threaten the value <strong>and</strong> performance of the organisation.<br />
<strong>Knowledge</strong> sharing presents a challenge in many organisations, including higher institutions of<br />
learning. Higher institutions of learning are challenged to gain access to individual knowledge as well<br />
as to make the knowledge widely <strong>and</strong> easily accessible to the community at large (Kidwell, V<strong>and</strong>er<br />
Linde & Johnson, 2000:31).<br />
In many organisations including higher institutions of learning, employees are accused of holding on<br />
to their out-dated operational ways which influence innovation <strong>and</strong> change management from a<br />
different perspective, argued to be negative. Thus, there is a need for paradigm shift to accommodate<br />
change to the benefit of individuals <strong>and</strong> the environment at large. Sohail <strong>and</strong> Daud (2009:132) argued<br />
that the attitude of line managers (or supervisors) <strong>and</strong> their subordinates are the main contributors to<br />
knowledge sharing, whether it be successful or unsuccessful within the organisation. <strong>Management</strong><br />
should address change initiatives by placing more emphasis on organisational learning <strong>and</strong><br />
knowledge sharing.<br />
<strong>Knowledge</strong> sharing in higher institutions (HI) of learning is intended to improve decision-making as<br />
well as to reduce turnaround time of curriculum development <strong>and</strong> research output. In addition, it could<br />
enhance academic <strong>and</strong> administrative services thereby reducing overall costs to the institution’s<br />
management.<br />
<strong>Knowledge</strong> sharing practices are part of the main activity of HI of learning since its primary objectives<br />
are knowledge creation, acquisition <strong>and</strong> dissemination. According to Yang <strong>and</strong> Chen (2007:96),<br />
knowledge sharing can depict a set of behaviours about knowledge exchange, which involve different<br />
actors.<br />
341
Magdeline Mashilo <strong>and</strong> Tiko Iyamu<br />
This study investigated the factors which impact knowledge sharing in higher institutions of learning, a<br />
case of South Africa. Based on the findings from the investigation, a framework was developed. The<br />
framework is aimed at underst<strong>and</strong>ing the factors which influences knowledge sharing in the<br />
organisation, particularly in higher institution of learning with multicultural diverse. The frame could<br />
assist to avoid pitfalls when developing knowledge related strategy.<br />
2. Research methodology<br />
The case study method was selected as the research design. A case study method is a tool that<br />
seeks to achieve a deep underst<strong>and</strong>ing of a specific phenomenon or problem (Creswell, 2007:73). In<br />
the study, emphasis was placed on individual <strong>and</strong> group behaviours <strong>and</strong> actions during <strong>and</strong> how<br />
knowledge was shared within the environment of higher institution of learning in South Africa. The<br />
case study method was employed <strong>using</strong> a South African university, referred to in the study as<br />
Cheetah University of Technology. One university was used in the study mainly because all the<br />
universities in the country are structured in the way <strong>and</strong> have similar culture, historical background.<br />
Data were collected <strong>using</strong> two types of approaches, namely semi-structured interviews <strong>and</strong><br />
documentation from a qualitative perspective. According to Leedy <strong>and</strong> Ormrod (2009:145) qualitative<br />
research entails multiple forms of data collection. These allowed the researcher to have direct contact<br />
with interviewees in order to become familiar with the context they are in <strong>and</strong> to exp<strong>and</strong> on certain<br />
questions.<br />
Responses from interviewees gave rise to follow up questions, because the interviews were<br />
approached in both formal <strong>and</strong> informal manners. The other approach, documentation, focused more<br />
on all written documents that furnished background on the phenomenon being researched. These<br />
documents, which included policies <strong>and</strong> annual reports, were used in the study.<br />
In the data analysis, the contingency theory (CT), from the perspective of contingency model was<br />
employed (1988:281). The components of the contingency model, namely, structure, environment,<br />
strategy <strong>and</strong> performance were followed.<br />
CT implies a proper fit between organisational context <strong>and</strong> structure for the organisation to perform<br />
successfully (Umanath, 2003:552). The fit within contingency theory is critical as it determines<br />
organisational performance. According to Miller (1992:130) the internal <strong>and</strong> external dem<strong>and</strong> of the<br />
environment must fit the environment to get better performance. The case study was analysed by<br />
<strong>using</strong> the following components as identified by Blanton et al (1992:352):<br />
Structure – The CT analysis the structure to determine whether it contributes to the organisations<br />
performance, as it aims to manage processes <strong>and</strong> activities of the organisation. It is important that the<br />
organisational structure must be well designed to ensure a clear flow of activities, including how<br />
individuals <strong>and</strong> groups share their knowledge tend to performance better (Hollenbeck et al.,<br />
2002:600). Individual <strong>and</strong> group behaviours can be influence by different aspects of management<br />
which will have an impact on their performance.<br />
Strategy - The key areas were students <strong>and</strong> research outputs, as well as delivery of excellent<br />
services that in turn contributes to nation building. Individuals <strong>and</strong> groups including students are<br />
encouraged to be self-sufficient in order to retrieve supporting documents for their work.<br />
Based on the institution’s strategy, employees need to underst<strong>and</strong> that the objectives of the university<br />
are to work independently by following policies <strong>and</strong> procedures within their different departments <strong>and</strong><br />
to be assured that these documents are easily accessible for knowledge sharing by all.<br />
Environment – The institution reflect the imbalances relating to racial lines, staff profiles <strong>and</strong><br />
students’ intake, resulting from the policy of the previous government. The higher institutions allow its<br />
employees to develop through in-house training thereby encouraging them to improve their<br />
performance.<br />
Performance - Performance was judged by students’ success rate <strong>and</strong> research output rate. The last<br />
three years performances were rated as well as how far the institution has supported them to achieve<br />
their results. The collaboration in the organisation could either enhanced or reduced performance<br />
(Souchon & Hughes, 2007:1253).<br />
342
Magdeline Mashilo <strong>and</strong> Tiko Iyamu<br />
According to Donaldson et al. (2004:608), an organisation that aligned to fit its structure to its<br />
contingencies will enhance performance compared to organisations that are out of fit.<br />
3. Data analysis<br />
Structure<br />
Similar to the rest of the world, higher institutions of learning in South Africa follow the same<br />
organisational structure. The case studied, Cheetah University of Technology (CUT), was divided into<br />
two main categories, which constitute academics <strong>and</strong> non-academics. It is managed by the vice<br />
Chancellor (VC), who was assisted by Deputy Vice Chancellors (DVCs). The academic staff were<br />
responsible for teaching <strong>and</strong> learning, while non-academic rendered support to the services provided<br />
by the university.<br />
The non-academic division was further divided into sections <strong>and</strong> sub-sections, <strong>and</strong> each was<br />
managed by senior managers <strong>and</strong> directors. The reporting hierarchy of the university includes top<br />
management <strong>and</strong> middle management. One of the employees explained this as follows:<br />
We have the main administration, with specialized departments such as students’ bursaries, <strong>and</strong><br />
students’ accounts, not including general enquiries. My department is under students’ recruitment <strong>and</strong><br />
retention <strong>and</strong> advisors.<br />
Employees within the university that were on different hierarchical levels included directors,<br />
managers, professors, lecturers, secretaries <strong>and</strong> administrators. The role of the academic staff role<br />
was to increase the success rate <strong>and</strong> research outputs of the university by teaching <strong>and</strong> mentoring<br />
students to achieve their goals.<br />
Among other things, the staffs (such as directors, managers, professors, lecturers, secretaries <strong>and</strong><br />
administrators) were expected to transfer their skills to their sub-ordinates, in order to improve on their<br />
efficiency <strong>and</strong> to provide excellent services to their clients as well as recruitment of skilled personnel.<br />
The behaviour of management has an impact on how processes were carried out in the institution<br />
including decision making that affects employees’ progress, processes <strong>and</strong> activities. One of the<br />
senior administrators expressed himself as follows:<br />
Amongst employees in my department there are no challenges because everybody st<strong>and</strong>s for each<br />
other. We are four in the department, <strong>and</strong> if someone is not available you won’t even notice that we<br />
are short staff. We can speak both Afrikaans <strong>and</strong> English to be able to assist all races.<br />
The structure of the university allows for a clear flow of information where students were not supposed<br />
to be challenged when searching for information. One stop (most of the information relating to the<br />
university is found at the enquiry desk) service enables employees to provide relevant information at a<br />
central point. Crucial information was disseminated in different ways to employees <strong>and</strong> students. A<br />
respondent stated:<br />
They’ve the notice board that is accessible by everybody <strong>and</strong> they write down who’s not there <strong>and</strong><br />
their duties so that all of us can take note in case you need to assist in that section. The structure<br />
allows them to communicate very closely.<br />
The structure of some departments was influenced by a racial divide. All decisions were made in<br />
favour of, <strong>and</strong> along racial lines <strong>and</strong> affiliations. Sharing of acquired knowledge presented a<br />
challenge. This was attributed to lack of relationships <strong>and</strong> meaningful communication. This was<br />
frustrating, affected <strong>and</strong> derailed productive in the environment. Working conditions became<br />
unpleasant <strong>and</strong> employees’ performance was compromised in favour of racial allegiance.<br />
Most of the challenges were racial. As an employee working closely with academics you were<br />
suppose to go to the department <strong>and</strong> introduce yourself <strong>and</strong> some of the academics won’t accept you.<br />
The situation was intimidating; when you make appointment they will say that they’re busy.<br />
In some cases it was very difficult to initiate or embark on projects where all services were controlled<br />
by whites who had occupied those positions for long period <strong>and</strong> they were not willing to delegate.<br />
Strategy<br />
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The University’s strategy focuses on people-orientated, staff development, both academic <strong>and</strong> nonacademic<br />
as well as students’ performance. Teaching, research <strong>and</strong> community engagement were<br />
the main strategic areas of the university. The university has attracted <strong>and</strong> retained some of the best<br />
staff <strong>and</strong> students <strong>and</strong> continues to reach its objectives As a result, the university had a strategy to<br />
train <strong>and</strong> equip its employees, to perform their individual tasks. One of the interviewees put it as<br />
follows:<br />
Currently in my department everybody knows how to perform <strong>and</strong> address different functions as well<br />
as to manage other employees. Additional method that we normally use is to keep up with current<br />
issues.<br />
Other strategies of the university were: the University was committed to excellence, within the field of<br />
academia. It also offered good support to staff <strong>and</strong> its students by promoting <strong>and</strong> rewarding good<br />
teaching <strong>and</strong> providing appropriate academic student support. The university remained committed to<br />
promoting racial, ethnic <strong>and</strong> gender equality even though there were some departments that were not<br />
comfortable with these practices.<br />
The university aimed to recruit excellent academics that were from previously disadvantaged areas. In<br />
addition, they specifically encouraged excellent postgraduate students from these groups to pursue,<br />
further their academic studies. This strategy had led to mentorship as described by one of the<br />
employees:<br />
I’ll make sure that there are st<strong>and</strong>ard procedures that I’ll put in place in terms of training new staff <strong>and</strong><br />
they must work closely with mentors irrespective of racial groupings.<br />
The university strategy also focused on research output. As part of the university strategy, library<br />
services had various resources to supply employees <strong>and</strong> students with relevant materials for their<br />
research <strong>and</strong> other academic activities. The university had received international recognition<br />
regarding their research output <strong>and</strong> it was arguably acclaimed to be the best university in South<br />
Africa, in terms of research <strong>and</strong> student output. Many of the employees acknowledged this, as<br />
expressed by one of the interviewees:<br />
It’s the best university with best resources. If you need databases or books, <strong>and</strong> any academic related<br />
materials, they are available <strong>and</strong> accessible. Also, each department had enough budgets throughout<br />
the academic cycle.<br />
All members were immediately given responsibility on decision making in the department. These<br />
departments invested in the development <strong>and</strong> training of their staff in order to provide excellent<br />
services as well as to maintain the university record of success rate.<br />
Post apartheid, the university was m<strong>and</strong>ated to transform from its former status of being white only.<br />
The university had fair mixed of student registration particularly for those from previously<br />
disadvantaged communities as part of transformation, <strong>and</strong> to increase students’ academic success<br />
rate <strong>and</strong> staff retention.<br />
Environment<br />
The university aimed to address the imbalance relating to staff profile <strong>and</strong> demographics, which still<br />
existed. Even though the university continued to strive for excellence, some areas were behind<br />
schedule with their Master’s <strong>and</strong> Doctoral programmes. This was attributed to the lack of knowledge<br />
sharing <strong>and</strong> access to electronic resources. An interviewee was quoted as saying:<br />
Academics are not sharing enough information with post graduate students <strong>and</strong> I’ve<br />
come to realize that our Master <strong>and</strong> Doctorate students are not performing very well;<br />
they’re way behind schedule of between two to three years.<br />
The university encouraged employees to be proactive in individual <strong>and</strong> group engagement within the<br />
environment. Resources that were provided were easy to access, thereby enhancing <strong>and</strong> improving<br />
delivery. Employees were expected to build a working relationship with experts within their specialised<br />
fields, to promote continuous <strong>and</strong> enriched learning.<br />
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Currently experts are willing to train staff but they will tell you that you must ask <strong>and</strong> be specific<br />
around where you encounter problems.<br />
The University was dominated by white employees. This presented a serious challenge when trying to<br />
transform into a more balanced demographic environment. Many of the white employees had difficulty<br />
in accepting the paradigm shift which was evident in the environment.<br />
Performance<br />
Similar to higher institutions, including universities, Cheetah University of Technology strived very<br />
hard to perform excellently. Their core business <strong>and</strong> focus were students <strong>and</strong> research output.<br />
Materials <strong>and</strong> resources needed to carry out processes <strong>and</strong> activities related to student <strong>and</strong> research<br />
outputs enjoyed high priority.<br />
Over the last three years (2007 to date), the students’ success rate had remained at eighty-six<br />
percent (86%). This performance was attributed to frequent <strong>and</strong> continuous sharing of acquired<br />
knowledge among the staff as dictated by the strategy of the university. Research has grown by<br />
nearly two percent (1.84%), year-on, over the last three (2007 to 2010) years. Through knowledge<br />
sharing many of the employees had developed, <strong>and</strong> this in-turn increased <strong>and</strong> maintained the<br />
performance of the university.<br />
4. Findings<br />
From the analysis presented above, some factors were found to be critical in the sharing on<br />
knowledge in institutions of learning. The factors are discussed as follows:<br />
Transformation<br />
The registration of previously disadvantaged students has risen considerably but it was not at the<br />
level that the government recommends. The university was gradually changing from their old way of<br />
doing things. For example, they have started communicating as well as teaching in English language.<br />
<strong>Management</strong> were willing to take adhere to advice on how to grow <strong>and</strong> develop their employees to<br />
provide excellent services. Most of the employees complied with the policy of the university on<br />
transformation <strong>and</strong> had positive attitude towards fulfilling the operational requirements.<br />
Few employees that have been in the system for long periods of time were not willing to share the<br />
knowledge <strong>and</strong> experience that they have acquired during their years of service at the university.<br />
Racial divide<br />
Racial divide exists at the university community. This became prevalence because a considerable<br />
number of the white employees had difficulty in accepting black employees as their colleagues in the<br />
system. Those who couldn’t h<strong>and</strong>le or find it difficult to integrate with people of other races<br />
intentionally attempted to derail processes <strong>and</strong> activities at the university. These groups of white<br />
employees either reluctantly or bluntly refused to share their acquired knowledge <strong>and</strong> experience.<br />
Some of them had rather resign.<br />
It was important to appoint supervisor to mediate between the groups in order to unite them in<br />
achieving the common objectives of the university. Some employees thought that they had no choice<br />
but to make peace with themselves, <strong>and</strong> were willingly to integrate with colleagues of different races.<br />
Culture<br />
Some employees grouped themselves according to racial lines, which made it difficult for new staff to<br />
fit into their work environment. This has made it difficult for some departments to retain new staff<br />
because there was no support from colleagues including some managers. As a result, many of the<br />
new staff lacked a sense of belonging <strong>and</strong> knowledge sharing with them (non-white) remained a<br />
serious challenge.<br />
Employees find it difficult to fit into the system of the university. Cultural affiliations were upheld<br />
strongly by some individuals <strong>and</strong> groups in the environment. Culture dominated the individuals <strong>and</strong><br />
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groups instead of the university’s interest. Culture was a barrier to knowledge sharing because by<br />
people resisting change as other employees of different races continued to be disadvantaged. Staff<br />
with expertise in the different departments within the university sometimes intimidated new staff with<br />
their capabilities <strong>and</strong> knowledge.<br />
Job security<br />
Experts within departments were insecure about their job for the future. They believed that vigorous<br />
younger employees would take over their jobs <strong>and</strong> they might be forced to take early retirement. They<br />
were not prepared for that.<br />
The behaviour of some of the managers was influenced by their racial <strong>and</strong> cultural affiliations. Many<br />
employees could get away with so many things including manipulating the system, which their nonwhite<br />
counterparts could not get away with.<br />
Technology<br />
<strong>Knowledge</strong> sharing reduces the inefficiencies of searching the World Wide Web <strong>and</strong> retrieving on-line<br />
information. University intranet had a quick link to activities <strong>and</strong> processes for easy access. As a<br />
result, processes <strong>and</strong> activities were linked to be informative. These documents informed employees<br />
on how to perform their individual <strong>and</strong> group functions. Other staff members needed someone to take<br />
them through the process. Employees used intranet or internet to convey information to fellow<br />
colleagues including students.<br />
Through technology, knowledge sharing becomes the key to successful collaborative work <strong>and</strong> early<br />
intervention to help students <strong>and</strong> employees including the academic staff to execute their<br />
assignments <strong>and</strong> tasks. ZU depended on technology to facilitate services to its clients to produce<br />
excellent results. Students were encouraged to take computer literacy courses to enable them to<br />
access electronic resources. These resources were readily available.<br />
Documentation<br />
Documents in the department have been replaced overpowered by the use of electronic resources,<br />
such as emails, telephones <strong>and</strong> face book. Recently at ZU communication between a lecturer <strong>and</strong><br />
students is done via face book. The library has introduced e-communication for to the librarians. Most<br />
of the time information is not documented.<br />
The next section presents the interpretation of the case study.<br />
5. Interpretation of the results from the case studies<br />
The results from the case study, Cheetah University of Technology (CUT) were interpreted. The<br />
interpretation focuses on the factors which influence knowledge sharing at the university. These<br />
factors (context, awareness, value, content, experiment, repository <strong>and</strong> change) as depicted in Figure<br />
1 below are described as follows:<br />
Context<br />
<strong>Knowledge</strong> was defined, acquired, shared <strong>and</strong> applied in the context of the departments, divisions<br />
<strong>and</strong> the university at large. However, some of the employees acquired knowledge which was not<br />
necessary to perform their tasks. Even though some of these employees tried to share the<br />
knowledge, colleagues could often not relate to it, therefore, it was sometimes misinterpreted.<br />
Awareness<br />
The lack of trust in the CUT <strong>and</strong> job insecurity ZU were caused by ignorance. Since the new<br />
dispensation, no employees have lost their jobs, <strong>and</strong> no students or staff has been harmed. Yet,<br />
these factors continue to derail sharing of knowledge <strong>and</strong> information.<br />
Organisational Value<br />
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Magdeline Mashilo <strong>and</strong> Tiko Iyamu<br />
The value of knowledge is difficult to measure. However, what is more important is the value an<br />
organisation places on the sharing of knowledge. However the value is realised when people adopt<br />
knowledge-sharing behaviour as a culture <strong>and</strong> practice, <strong>and</strong> became aware of the enhanced<br />
performance of the organisation.<br />
Change<br />
Context<br />
Repository<br />
Figure 1: Factors influencing knowledge sharing<br />
Content<br />
Awareness<br />
<strong>Knowledge</strong><br />
Sharing<br />
Experiment<br />
Value<br />
Content<br />
In some instances, employees consciously or unconsciously provided colleagues with content which<br />
was not related to their duties <strong>and</strong> responsibilities. Correct information helps to create awareness,<br />
which in turn, provides choices. If there are no choices, no decisions can be made, <strong>and</strong> inefficiency is<br />
subsequently resulted. This creates uncertainty in the environment.<br />
Experiment<br />
At the university knowledge was shared through various means, one of which is experiment. In the<br />
context of this study, experiment constituted analysed actions which meant putting experience into<br />
practice. Many employees benefited from these actions <strong>and</strong> practice, which were channelled towards<br />
them consciously or unconsciously.<br />
Repository<br />
The rapid <strong>and</strong> evolving developments in information <strong>and</strong> communication technology (ICT) have<br />
transformed the human ability to memorise into a comprehensive data store in technological form that<br />
is known as a repository. The repository is able to hold, <strong>and</strong> virtualised knowledge.<br />
Change<br />
<strong>Knowledge</strong> is continuous artefact, it only come to reality when it practice has impact of negative of<br />
positive change. Change in the context of knowledge sharing within the university environment should<br />
not affect communication adversely despite the racial divide <strong>and</strong> fields of specialisation.<br />
From the analysis of the case study, a conclusion can be drawn on the impact of knowledge sharing<br />
on organisational performance. This is discussed in the following section.<br />
6. The impact of knowledge sharing on the organisation<br />
The performance of the institution, with particular focus on studentship <strong>and</strong> research is dependent on<br />
knowledge. <strong>Knowledge</strong> sharing is influenced by many factors as discussed above. Even though<br />
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Magdeline Mashilo <strong>and</strong> Tiko Iyamu<br />
managers <strong>and</strong> other employees acted within the University defined processes <strong>and</strong> procedures,<br />
factors such as culture <strong>and</strong> trust among individual levels influenced <strong>and</strong> impacted on how knowledge<br />
was shared in the institution.<br />
Unfortunately, performance contracts or any other techniques were not in place to monitor, manage<br />
<strong>and</strong> ensure that employees subscribed to the university’s strategy to share knowledge <strong>and</strong><br />
information. The structure allowed managers including the employees to use their discretion (as they<br />
saw it fit) in certain areas. Even though there were rules <strong>and</strong> regulation in the University environment,<br />
this did not guarantee a positive outcome.<br />
Individual actions resulting from diverse cultural backgrounds sometime derailed activities <strong>and</strong><br />
processes in the environment. The employees could not be forced to perform their tasks or behave in<br />
a prescriptive way. In many cases, knowledge sharing depended on the agenda of individual<br />
managers, who might coerce employees into certain modes of behaviour. Employees took advantage<br />
<strong>and</strong> exploited the environment. Some employees who were privileged shared <strong>and</strong> communicated<br />
information with colleagues of their choice, when information was supposed to be made available to<br />
the entire unit or department.<br />
The university environment played important role in terms of knowledge acquisition <strong>and</strong> sharing. The<br />
university had employees with different racial, cultural <strong>and</strong> educational backgrounds, situated in<br />
different divisions <strong>and</strong> departments who needed to use a combination of ways to acquire knowledge.<br />
Given the university’s structure <strong>and</strong> environment, diversity in areas of specialization was supposed to<br />
be a necessary condition for knowledge acquisition.<br />
<strong>Knowledge</strong> is an investment when shared among employees within the context, content <strong>and</strong> value<br />
structure of the university. <strong>Knowledge</strong> content, in context, <strong>and</strong> relevance saves the university both<br />
time <strong>and</strong> money through increased efficiency <strong>and</strong> efficacy, which will improve productivity, as well as<br />
increasing students <strong>and</strong> research output. Access to research results allows lecturers <strong>and</strong> students to<br />
benefit from the experiences of others <strong>and</strong> avoids costly duplication of efforts. While the benefits are<br />
substantial, knowledge sharing is difficult <strong>and</strong> challenging to sustain due to distractive <strong>and</strong> derailing<br />
factors such as personal interest rather than the good of the university.<br />
7. Conclusion<br />
Some of the findings were prima facie evidences that led to the study, but there was no empirical<br />
evidence to them. This is one of the strengths of the study. Thus, the study has contributed to the<br />
body of knowledge.<br />
<strong>Knowledge</strong> sharing is critical to transformation in South African higher institutions. The study will<br />
contribute to the development of <strong>and</strong> transformation in South African higher institutions from the<br />
perspective of knowledge sharing <strong>and</strong> management.<br />
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349
Contextual Inquiry into Business Requirements Elicitation<br />
of Indigenous Enterprise: A Case of the Malaysian Batik<br />
Microenterprise<br />
Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
Universiti Teknologi MARA, Shah Alam, Malaysia<br />
norlaila@fskm.uitm.edu.my<br />
ariza@fskm.uitm.edu.my<br />
Abstract: Batik is a traditional art form whose charm lies in its power of storytelling. Batik making is practiced by<br />
various indigenous communities in Asia <strong>and</strong> Africa <strong>and</strong> has evolved into a socio-economic uplift existing as<br />
cottage industry. The Malaysian batik industry was revived by the government intervention to emphasize batik as<br />
a cultural identity <strong>and</strong> also to improve the livelihood of batik producers where the majority operates as indigenous<br />
microenterprises. However, the batik making tasks <strong>and</strong> the management of batik microenterprises are currently<br />
not supported by the use of ICT. To facilitate batik microenterprises ICT adoption we proposed the development<br />
of ICT-based work systems that emphasize the cultural context of batik production. We argued that a technology<br />
conception needs to consider the ecological aspect of batik production that comprises of resources, technology<br />
<strong>and</strong> geography to underst<strong>and</strong> barriers <strong>and</strong> opportunities of technology. To support our argument, we conducted a<br />
batik microenterprise business requirements elicitation to formulate the technology conception for an ICT-based<br />
work system. We adopted the framework that considers a cultural diversified practice <strong>and</strong> focus on the cultural<br />
context as a business requirement for ICT adoption. We conducted a contextual inquiry <strong>using</strong> multi-activity<br />
inquiry that include site visits, face-to-face <strong>and</strong> focus group interviews with an informal community of practice of<br />
batik making. Our participants are representatives of batik advocators, entrepreneurs, practitioners <strong>and</strong><br />
apprentices. We strategize the focus group inquiry in a workshop setting <strong>using</strong> verbal <strong>and</strong> visual cues to navigate<br />
the chaotic <strong>and</strong> fragmented storytelling of group members. From the contextual analysis conducted, we<br />
discovered that the technological conception for batik microenterprise is incomplete. The fear of batik cultural<br />
erosion is overlook as batik makers are more concern with it. Our work will contribute to the systems engineering<br />
of ICT-based work systems for indigenous or cultural influenced business.<br />
Keywords: socio-technical system, community informatics, requirements engineering, microenterprise,<br />
technology adoption, indigenous business<br />
1. Introduction<br />
Batik is an indigenous cultural artifact that is influenced by the creativity of a single or collective<br />
human actions inspired by natural surroundings. Batik is predominant in various indigenous<br />
communities in South East Asia, Africa, India <strong>and</strong> China. The charm of batik lies in its power of<br />
pictorial storytelling where batik motifs depict everyday lives <strong>and</strong> practices. Batik making has evolved<br />
into a socio-economic uplift within indigenous communities <strong>and</strong> has long existed as a cottage<br />
industry. In Malaysia, the batik industry has been revived by the government intervention in support of<br />
the industry. Besides emphasizing batik as a cultural identity, the Malaysian government is also<br />
interested in improving the livelihood of batik producers where the majority operates their trade as<br />
microenterprises. The interest to promote <strong>and</strong> increase the production of batik is currently hampered<br />
by use of traditional methods of batik making like h<strong>and</strong> painting <strong>and</strong> block printing. Currently the<br />
management of batik microenterprises is also not supported by the use of ICT. This situation prevails<br />
as batik makers are concerned with issues of the disruption of the craft's cultural heritage <strong>and</strong> acts of<br />
design theft when batik designs are published. The unique situation of batik making as an indigenous<br />
business is a strong motivating factor to explore on the ICT adoption of batik microenterprise to gain<br />
an insight on to improve their operational efficiencies <strong>and</strong> market positioning. Here, we present our<br />
technology conception approach for batik microenterprises practices from the framework of sociotechnical<br />
systems. We scope our work on the elicitation of business requirements for batik<br />
microenterprise business management. Realizing that batik making involves a cultural heritage<br />
influence, we focus on the dem<strong>and</strong> of rational <strong>and</strong> affective attitude towards batik making in the<br />
elicitation. We argue that the approach of contextual inquiry can help us gain better underst<strong>and</strong>ing of<br />
the batik making situation before attempting to look into possible socio-technical systems solutions.<br />
Our paper covers a broad literature review of microenterprise <strong>and</strong> batik making, technology adoption<br />
<strong>and</strong> socio-technical systems issues. We then report on the contextual inquiry work that we conducted<br />
to elicit business requirements of batik making <strong>and</strong> our findings highlighted pertinent issues in<br />
business <strong>and</strong> ICT strategy alignment.<br />
350
2. Literature review<br />
2.1 The Batik Making enterprise<br />
Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
The Malaysian batik industry is clustered under the creative industry <strong>and</strong> divided into small <strong>and</strong><br />
medium enterprises (SMEs) <strong>and</strong> the cottage industry which operates as microenterprises (Wan Teh<br />
1997). However, based on Porter’s industry cluster (Porter 1990) batik will be placed as a h<strong>and</strong>icraft<br />
industry <strong>and</strong> categorized as a historic know-how-based cluster. Within this cluster, the batik business<br />
knowledge is based on the traditional activities that survived over the years through the inheritance<br />
phenomenon across generations spurned by a mentoring process knowledge transfer traditions. Batik<br />
microenterprise business model is about producing batik traditionally for the local market <strong>and</strong> batik<br />
microenterprise are known for the expertise in batik making technique <strong>and</strong> design creativity. In<br />
Malaysia there is no official differentiation batik manufacturers <strong>and</strong> batik artist <strong>and</strong> both belong to one<br />
nationwide community of batik makers. Batik has been endorsed as a cultural heritage entity by<br />
UNESCO in 2009. The knowledge asset is one of the preservation entities. Batik exists as the object<br />
of traditions that inherits traits of traditional knowledge <strong>and</strong> preservation, imperative to the community<br />
memory. As a h<strong>and</strong>icraft product, batik reflects the cultural aspect of the batik making community <strong>and</strong><br />
is subjected to the batik makers’ prioritized agenda. The batik maker is comprehended to have both<br />
an artist <strong>and</strong> a designer attitude within batik making task model. A batik maker is a person who<br />
assumes the role as an artist, a designer <strong>and</strong> a promoter to make batik for cultural <strong>and</strong> business<br />
endeavour. The versatility of the role playing is due to the craftsmen model of business as<br />
microenterprises <strong>and</strong> livelihood strategies. As the role of batik maker is to “make” batik, this dem<strong>and</strong>s<br />
both rational <strong>and</strong> affective attitude towards the artefact <strong>and</strong> its making. The attitude of an artist<br />
features of adhering to self-driven task model, having artistic sense <strong>and</strong> life enrichment objective. On<br />
the other h<strong>and</strong> the designer attitude emphasized on engineering process driven task model, having<br />
technical sense <strong>and</strong> creative sensibility as attitude towards product development. Our synthesized<br />
underst<strong>and</strong>ing of the Malaysian batik maker is illustrated in Figure 1 <strong>and</strong> is derived from formal<br />
sources of batik maker definitions (Jamal 1994; Ismail 1997; Elamvazuthi <strong>and</strong> Morris 2000).<br />
Batik<br />
Maker<br />
Batik<br />
Task Model<br />
Need to create<br />
Romanticist<br />
Artist<br />
Attitude<br />
Designer<br />
Attitude<br />
Rationalist<br />
Need for a new product<br />
or product range<br />
Artistic<br />
Sense<br />
Self-Driven Life<br />
Task Model Enrichment<br />
Transcendental<br />
Proximity Serendipity<br />
Aesthetics<br />
Creative<br />
Engineering Sensibility<br />
Process Driven (Trends)<br />
Task Model<br />
Technical Sense<br />
(Style & Fit)<br />
Batik<br />
Design Artifact<br />
Figure 1: A synthesized underst<strong>and</strong>ing Malaysian Batik Maker<br />
Effort of promoting <strong>and</strong> upgrading the batik industry must not ignore the cultural <strong>and</strong> business context<br />
of batik making. The background knowledge of the batik maker also gives an important insight to their<br />
attitude towards ICT adoption.<br />
2.2 ICT adoption, community informatics, socio-technical systems <strong>and</strong> knowledge<br />
systems<br />
The adoption <strong>and</strong> diffusion of ICT throughout a productive system assumes a core position in the new<br />
economy <strong>and</strong> has spurred numerous ICT adoption research conducted from different approaches.<br />
Generally there are three approaches to ICT adoption: the diffusion approach, the adoption approach<br />
<strong>and</strong> the domestication process (Manueli, et al 2007).<br />
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2.2.1 The diffusion approach<br />
In the diffusion approach, the Roger’s Diffusion of Innovation (DOI) theory is used to explain the role<br />
of the media <strong>and</strong> interpersonal contact in providing information that influences a person’s opinion <strong>and</strong><br />
judgment of the technology that leads to the adoption of the technology. DOI theory is used to view<br />
the adoption stages <strong>and</strong> factors leading to adoption. From the DOI theory, the Rogers’ Innovation-<br />
Decision Process model is used to gain further underst<strong>and</strong>ing of the adoption process related to issue<br />
of access. ICT adoption by SMEs is studied in many settings. In the Italian industries, Atzeni <strong>and</strong><br />
Carboni (2006) revealed that weak ICT penetration is due to the size of industry, the lower<br />
reorganization of work practices <strong>and</strong> the sectoral specialization. For the Malaysian SMEs, Khong <strong>and</strong><br />
Eze (2008) confirmed the factors of DOI theory <strong>and</strong> added two other factors which are ICT security<br />
<strong>and</strong> costs. For SMEs in Pol<strong>and</strong>, Spain, Portugal <strong>and</strong> the United States, Arendt (2008) highlighted that<br />
the impact of the lack of access to ICT is less important when compared to the lack of proper<br />
knowledge, education <strong>and</strong> skilled owner-managers <strong>and</strong> employees within the enterprise. This<br />
indicates that the issue ICT non-adoption cannot be solved simply by the provision of ICT access.<br />
ICT adoption studies also scope into adoption by rural poor foc<strong>using</strong> on the barrier to ICT adoption<br />
from the digital divide perspective. Barriers often cited are factors of limited physical access, socioeconomic<br />
<strong>and</strong> socio-personal factors <strong>and</strong> low education level of potential adopters (Foley et al 2002).<br />
However, when addressing ICT adoption in community development, issues of technology<br />
compatibility is more important than issues of access. Helmersen (2006) criticised the approach of<br />
ICT adoption that forces Western technologies on the poor in developing <strong>and</strong> third world nations <strong>and</strong><br />
stressed the need to have a deep local insight that attempt to underst<strong>and</strong> the cultural context that<br />
facilitates ICT adoption. Similarly, Kivunike, et al (2009) studied the facilitating <strong>and</strong> inhibiting factors of<br />
ICT adoption by the rural poor in Ug<strong>and</strong>a from a dem<strong>and</strong>-oriented perspective. They too highlighted<br />
the importance of underst<strong>and</strong>ing the contextual factors that influence ICT adoption. They then<br />
suggested that strategies of ICT adoption should move beyond the provision to facilitate adoption <strong>and</strong><br />
the use of ICT by the rural poor by considering factors such as maintenance costs, quality of services,<br />
ICT skills <strong>and</strong> creating awareness of potential benefits in the rural communities.<br />
Community ICT adoption has evolved into a new discipline known as community informatics (CI) <strong>and</strong><br />
is related to the discipline known as development informatics or ICT4D. Led by Gurstein (2008),<br />
research on CI explored into various methods of research inquiry <strong>and</strong> practice. Moor (2009)<br />
conceived different aspects of community informatics research to consist of contexts/values, cases,<br />
process/methodology, <strong>and</strong> systems <strong>and</strong> is illustrated in Figure 2.<br />
Figure 2: Pillars of community informatics research (sources: Moor 2009)<br />
Moor (2009) also highlighted two important CI research contexts: community-centred development<br />
<strong>and</strong> community knowledge sharing through the development of socio-technical systems such as<br />
knowledge management systems (KMS).<br />
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2.2.2 The adoption approach<br />
The adoption approach explains the adoption decision of users applying different individual <strong>and</strong> social<br />
decision making theories. The adoption literature began with the technology acceptance model (TAM)<br />
which was first presented by Davis in 1975. Since then TAM has been validated in numerous<br />
technology settings <strong>and</strong> is heavily cited in the literature. TAM is used to determine adoption<br />
influencing factors in IT systems both in the voluntary <strong>and</strong> m<strong>and</strong>atory used systems <strong>and</strong> adoption is<br />
reflected in the overall user acceptance. Key constructs of TAM are perceived usefulness <strong>and</strong><br />
perceived ease of use of IT systems <strong>and</strong> have been used to determine the acceptance of the<br />
technology. However in TAM, personal control factors like behavioural accounts are not taken into<br />
consideration. TAM is also used with the Delone <strong>and</strong> McLean IS Success Model to determine the<br />
influence of systems quality <strong>and</strong> information quality of the IT systems on the success <strong>and</strong> failures of IT<br />
systems. Further extension of TAM will be the <strong>Information</strong> Technology Adoption Model (ITAM) by<br />
Dixon (1999) that seeks to refine the IT requirements of the information systems that influences IT<br />
adoption leading to the development of the IT adoption framework that includes the interaction<br />
between individuals, technology <strong>and</strong> tasks (FITT framework). The FITT framework focuses on the<br />
significance of the optimal interaction (fit) of individual user, technology, <strong>and</strong> task attributes. Now the<br />
fit between the attributes is seen to be more important than the individual attributes themselves. For<br />
example, IT skills of the users are not sufficient for the success of an introduction. The IT skills must<br />
match the requirements by the IT software.<br />
2.2.3 The domestication process<br />
Domestication is described as the process of technology adoption into everyday life <strong>and</strong> originates<br />
from other disciplines such as anthropology, consumption studies <strong>and</strong> media studies. Domesticating<br />
ICT involves a process of bringing new forms of ICT into the home (Chen <strong>and</strong> Zhang 2009) <strong>and</strong><br />
involves the integration of technologies into social relationships <strong>and</strong> structures. The domestication<br />
framework has four concurrent phases: the appropriation, the objectification, the incorporation <strong>and</strong> the<br />
conversion. This approach of adoption considers the context in which ICT is experienced by the<br />
people <strong>using</strong> them. Conceptual context distinctions are applied to approach where three important<br />
distinct contexts are identified. The first is the work <strong>and</strong> leisure context, the second will be the endusers<br />
that belong or do not belong to a demographic group <strong>and</strong> the third is the private <strong>and</strong> the public.<br />
2.3 Microenterprise, work systems <strong>and</strong> socio-technical systems<br />
Research on ICT adoption by SMEs attempt to determine whether ICT adopted throughout the<br />
production process can produced positive outcomes related to operational efficiencies, increased<br />
revenues <strong>and</strong> better market positioning. Alter (2002), defined a work systems framework that outline<br />
nine elements that can be used to analyze the professional context to address issues of productivity<br />
<strong>and</strong> sustainability. However, the challenge of microenterprise ICT adoption is multi-dimension where<br />
human factor is a central issue (Duncombe <strong>and</strong> Molla 2009). Kamal, et al (2010) raises the issues of<br />
affordability, awareness, management capabilities <strong>and</strong> the lack of ICT infrastructure which are not<br />
address in the earlier work systems framework such as Alter’s framework. Duncombe <strong>and</strong> Molla<br />
(2009) who presented four archetypes of information systems formalization amongst SMEs in<br />
Botswana, pointed out the importance of looking into the systemic approach when considering the<br />
adoption of information systems in SMEs. A firmer assertion was made by Hoffman, et al (2009) who<br />
argued that work systems can be viewed from a socio-technical systems perspective to include a<br />
cultural phenomena approach that will help researchers comprehend the application of works systems<br />
outside the professional work context. They further elaborated on the macrocognition approach to<br />
help comprehend work systems robustness, resilience <strong>and</strong> adaptiveness.<br />
A micro-perspective of microenterprise ICT adoption can be viewed from the theoretical lens of sociotechnical<br />
systems (STS). STS is a social system sitting upon a technical base <strong>and</strong> comprises of the<br />
technology, the people <strong>and</strong> their personal communication <strong>and</strong> tasks, views, organizational structures,<br />
co-operation <strong>and</strong> others (Whitworth 2008). Here an STS perspective will shed some light on factors to<br />
work on to promote microenterprise ICT adoption. This view is aligned to earlier findings of Tschiersch<br />
<strong>and</strong> Schael (2003) who stated that as industry gets shaped by technology through the process of<br />
production automation, computer-supported information <strong>and</strong> co-operation networks, the reliance will<br />
no longer be on mere technical systems but rather on STS. Three technology related dimensions of<br />
STS are namely, the workplace, the group work <strong>and</strong> the network. In the workplace dimension, the<br />
concern will be on the actual use of technology within the working process. According to Tschiersch<br />
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Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
<strong>and</strong> Schael (2003), from the human centered perspective, the most complex aspect of human work<br />
takes into consideration the intrinsic need of people to develop themselves further <strong>and</strong> to experience<br />
through their work, challenges, motivation, success <strong>and</strong> satisfaction. They further added that the<br />
design of STS should try to fulfill meaningful <strong>and</strong> rewarding tasks which also take account of the<br />
individuality of the human operator. The approach to design a socio-technical system is to explicitly<br />
recognize the technology’s symbiotic relationship with society, <strong>and</strong> so tries to involve end-users in the<br />
creation of the technical products that will affect their lives.<br />
2.4 Business requirements elicitation<br />
The traditional approach of requirements elicitation is mainly centered on hardware <strong>and</strong> software<br />
requirements <strong>and</strong> is often dominated by technical issues of functionality, connectivity, interoperability<br />
<strong>and</strong> security. Isabirye (2009) highlighted the issue of design-reality gaps between ICT analysts <strong>and</strong><br />
users which is due to the detachment from the context of a proposed system to be implemented. This<br />
follows Heeks (2002) beliefs of the gaps between the system design which is based on the analyst’s<br />
perceptions <strong>and</strong> the reality which is often foreign to the analyst. According to Disse (2001) system<br />
requirements are best determined through merging the different viewpoints of the stakeholders<br />
involved. Whitworth (2009) presented a comprehensive view of socio-technical requirements that he<br />
hierarchically group into physical, information, personal <strong>and</strong> communal requirements. He suggested<br />
that STS which involves community influence <strong>and</strong> participation should consider personal <strong>and</strong><br />
communal requirements that he prescribed in his WOSP model. We interpret this into the necessity of<br />
underst<strong>and</strong>ing the cultural context of the problem domain of batik making. This implies that the<br />
technological conception of an ICT-based work system for batik microenterprise dem<strong>and</strong>s a holistic<br />
underst<strong>and</strong>ing of problem situation <strong>and</strong> current resolution towards community empowerment with<br />
desirable cultural identity development. A contextual inquiry is necessary for the requirements<br />
elicitation.<br />
2.5 Contextual inquiry<br />
Contextual inquiry is a technique for examining <strong>and</strong> underst<strong>and</strong>ing users <strong>and</strong> their workplace, tasks,<br />
issues <strong>and</strong> preferences. It is a synthesis of ethnographic, field research, <strong>and</strong> participatory design<br />
methods that provide designers with grounded <strong>and</strong> detailed knowledge of user work as a basis for<br />
their design (Hotzblatt <strong>and</strong> Jones 1993). Within the human computer interaction (HCI) literature,<br />
contextual inquiry is commonly-known as the user-centered approach. In contextual inquiry, studies<br />
on the users are made in the context of their work by observing how they perform tasks, the tools they<br />
used <strong>and</strong> the process involved in their work. Contextual inquiry can be conducted in a laboratory<br />
where participants in the inquiry are observed under a usability testing set-up or conducted in an<br />
ethnography study set-up or conducted as a focus group workshop (Summers, et al 2004). Outside<br />
the context of HCI studies contextual inquiry is also used in information systems requirements that<br />
apply the soft systems methodology (SSM) as seen in the work of Bednar <strong>and</strong> Welch (2006, 2009).<br />
The strength of conducting contextual inquiry in requirements elicitation is the ability to investigate the<br />
phenomenon of processes that involves human interaction which gives an opportunity to recognize<br />
individual emergence. This will be useful if the work system is seen as a network of human actors,<br />
interacting <strong>and</strong> communicating <strong>using</strong> available means (including technological artifacts), <strong>and</strong> then<br />
complexity is recognized through the individual sense-making processes of each actor Bednar <strong>and</strong><br />
Welch (2009).<br />
3. Methodology<br />
We aim to formulate a technological conception of an ICT-based work system for batik<br />
microenterprise. We employed contextual inquiry in the elicitation of business requirements of batik<br />
microenterprise to gain insight on batik making operational efficiency <strong>and</strong> sustainability. Based on our<br />
literature work, our research took into account the importance of community <strong>and</strong> cultural context of the<br />
batik microenterprise. We described our approach in the next sub-section.<br />
3.1 The overall method<br />
The data collection is conducted over a period of six months through different data collecting activities<br />
consisting of personal interview with stakeholders, visits to actual business sites <strong>and</strong> focus group<br />
interview before attempting to produce the refinements of the business requirements. (Figure 3).<br />
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Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
Figure 3: Overall method<br />
Although the focus of this research is on batik microenterprise the contextual inquiry covers other<br />
batik making stakeholders to gain an underst<strong>and</strong>ing of the batik making ecosystem. The data<br />
collection was done sequentially to allow for re-adjustment <strong>and</strong> re-alignment of our underst<strong>and</strong>ing the<br />
batik making context.<br />
3.2 Sampling<br />
In this study, the duality strategy (individual – collective) is chosen for the unit of analysis <strong>and</strong><br />
comprises of (1) individual microenterprise/SME <strong>and</strong> (2) the collective- component of informal batik<br />
community of practice made of advocators, designers <strong>and</strong> apprentice). The overall sampling for the<br />
contextual inquiry is done based these different stakeholders <strong>and</strong> the roles of the actors within these<br />
groups are illustrated in Table 1.<br />
Table 1: Hierarchy of Batik Makers<br />
Actor Role<br />
Apprentice A novice designer who have less than 5 years experience of practice.<br />
Designers A designer with experience more than 5 years in practice <strong>and</strong> still actively practicing.<br />
Advocating<br />
Designers<br />
A teacher for formal learning who is a textile designer by formal training <strong>and</strong> practice with<br />
more than 10 years practicing experience or teaching or mentoring<br />
3.3 Face-to-face interview<br />
We conducted face-to-face interview with an advocating designer <strong>and</strong> a practising designer to<br />
familiarise with the research context. As we familiarised with the research phenomenon our ability of<br />
foc<strong>using</strong> into areas the respondents considered important is crucial. For example, one of the<br />
respondents introduced the conception design by accident/serendipity which means that knowledge is<br />
sometimes shared in ad hoc situations <strong>and</strong> this received further attention in the following interviews.<br />
The interviews were recorded <strong>and</strong> after transcription they were sent to the respondents to be verified.<br />
3.4 Focus group interview<br />
The focus group interview was conducted as a story-telling workshop that allows the participants to<br />
share their story <strong>and</strong> able to express their opinion. The participants consist of representatives from<br />
three actor groups shown in Table 1. The preparation of the workshop was done to take great care<br />
that participants’ opinions are respected.<br />
3.4.1 Instrumentations<br />
Two types of instruments were used. The first is the visual cues which are digitized images of batik<br />
artefacts. Artefact digitization sessions were done during the early stage of the research before focus<br />
groups session. The visual cues are used similarly like technology probe to trigger stories <strong>and</strong><br />
boundaries for the storytelling session. Verbal cues are used by facilitator to align stories with the research<br />
questions formulated prior to the workshops. The verbal sues used are shown in Table 2.<br />
355
Table 2: Verbal cues<br />
Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
Objective Cues<br />
Domain <strong>Knowledge</strong><br />
Acquisition<br />
Applied Design<br />
<strong>Knowledge</strong><br />
Visualization<br />
Aesthetic <strong>Knowledge</strong><br />
Visualization<br />
Tell us your life story of making batik:<br />
How you do learn to make batik? How do you get involve in batik making?<br />
What are your social network, social responsibility as a batik maker?<br />
How can we identify traditional <strong>and</strong> contemporary batik?<br />
Describe your experience to produce a batik product from planning to finish<br />
product:<br />
How do you know what to produce?<br />
Describe stages of idea development until sketches of design<br />
How do you know your product has aesthetics value realized?<br />
How do you judge batik aesthetics?<br />
3.4.2 Procedures<br />
The activities of the focus group interview are described in Table 3.<br />
Table 3: Focus group activities<br />
Component Description<br />
Structure Each focus group workshop was conducted with 12 selected participants who are group<br />
according to their actor’s role.<br />
Timeframe<br />
Introduction. (5 minutes):<br />
(150 The facilitator explained the research-driven story to the group <strong>and</strong> provided everyone with<br />
minutes)<br />
paper <strong>and</strong> pens. The timing was controlled to avoid unnecessary delay.<br />
Case Story Session (5 – 10 minutes)<br />
The workshop participants spent time before the session writing their story based on their<br />
experience of a particular theme. As the story is being told, participants were told to note<br />
details of the story <strong>and</strong> ideas for questions <strong>and</strong> not to interrupt, <strong>and</strong> to respect confidentiality.<br />
The observer for each group took notes.<br />
Conversational & Informal Dialogue (25 – 30 minutes)<br />
The listeners write down their immediate reflections on the story: similarity/difference of the<br />
story with own story. Then they share their reflections within the group, one at a time with no<br />
interruptions. The observer for each group took notes.<br />
Group Ethics Promotes Emergence Not Forcing: Critical, asking <strong>and</strong> answering probing questions about the<br />
& Protocol<br />
subject matter in order to do it better not to force emergence.<br />
Promotes Caring: Ensure that our questions <strong>and</strong> our answers are generated in a climate of<br />
respect for the values.<br />
Promotes Confidentiality: Respecting the storytellers who are taking the risks to share their<br />
experiences. Video Recording is done with permission from participants<br />
3.5 Actual site visit<br />
We visit two batik microenterprise sites to make live observation of the batik making realities. We also<br />
conducted informal interview with the batik maker. The live observations verify processes of batik<br />
making for each technique to gain inside knowledge of actual practices <strong>and</strong> to gain real life<br />
experience in batik making for comparison with stories acquired from interviews <strong>and</strong> focus group<br />
sessions.<br />
4. Analysis <strong>and</strong> findings<br />
A micro analysis was conducted where content of the transcripts from the personal <strong>and</strong> focus group<br />
interview were coded to make sense of data to facilitate the emergence of open codes <strong>using</strong> the In<br />
Vivo Coding by Atlas TI. As the process is tedious, we took care to avoid the tendency of overconceptualizing.<br />
The open codes for this study were derived from multiple sources of data allowing a<br />
precise differentiation among categories.<br />
Two important discoveries emerged. The first is the business reliance on batik makers’ tacit<br />
knowledge gained from personal experience, batik mentor storytelling <strong>and</strong> non-textual references<br />
such as photographs <strong>and</strong> images from books <strong>and</strong> other repositories of knowledge that includes batik<br />
collection. The second is the concern for the business sustainability in the globalization era related to<br />
the concept of batik cultural erosion. This stems from batik makers resort for discontinuity of batik<br />
cultural rules in order to survive the socioeconomic impact of business globalization. We further<br />
enumerate three dimensions that cover competency deficit, isolated strategies <strong>and</strong> diverse level of<br />
need shown in Figure 4. The rest of this section presents the dimensions <strong>and</strong> related elements.<br />
356
Isolated<br />
Strategies<br />
Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
Batik Maker’s<br />
Position<br />
(Promoting Cultural Erosion)<br />
Diverse Needs<br />
Competency<br />
Figure 4: Dimensions of Batik Makers’ position<br />
Lack of cultural knowledge <strong>and</strong> mimetic style related to batik maker’s competency dimension is a<br />
main concern for business sustainability of batik making. Competency refers to set of skills, related to<br />
cultural knowledge <strong>and</strong> attributes that allow an individual to make batik. Two types of competency are<br />
personal <strong>and</strong> mimetic. Personal competency relates to individual emotional intelligence while mimetic<br />
competency relates to mimetic styles capability <strong>and</strong> social semiotic. The workshop participants have<br />
also pointed out due to livelihood condition batik makers have adversities to deal with. As a result<br />
personal competency development has been neglected as survival process strives for better income<br />
<strong>and</strong> living conditions. The process of survival dem<strong>and</strong>s low cost of production <strong>and</strong> product market<br />
availability. Mostly isolated unwritten strategies that govern behaviours to meet those dem<strong>and</strong>s places<br />
the batik maker in a difficult position to oblige to the cultural rules (indigenous nature) <strong>and</strong> fitting in the<br />
business scenario. Four areas of concern related to these strategies are:<br />
Efficiency: the optimal method to accomplish batik making task;<br />
Calculability: quantifiable aesthetics values rather than subjective, establishing mass production, to<br />
match quantity with quality <strong>and</strong> to meet dem<strong>and</strong> at lowest cost of production;<br />
Predictability: St<strong>and</strong>ardized <strong>and</strong> uniformity;<br />
Control: Replacement of human <strong>and</strong> non-human technologies in batik making.<br />
These findings have huge implication on the development of ICT-based works systems for batik<br />
microenterprise. Although batik makers were concern with efficiency, they are not willing to sacrifice<br />
the indigenous nature of their batik artifacts. An ICT-based work system that only increases their<br />
operational efficiency may not be able to help them retain the competency of batik making which is<br />
seen to be more crucial. A new set of requirements dictated by the batik domain knowledge cannot be<br />
ignored. A relevant ICT-based work system for batik microenterprise will be one that supports the<br />
knowledge creation of batik either for an individual or for a community of batik makers.<br />
5. Conclusion<br />
In this paper we have presented our concern for the technology conceptualization required for the<br />
development of an ICT-based work system for the batik microenterprise. We attempted a business<br />
requirement elicitation work for batik microenterprise by conducting a contextual inquiry aligning it with<br />
concern of batik community. We made two important discoveries of batik makers’ concern which<br />
influences the batik making business requirements. The first is on the reliance of tacit knowledge of<br />
batik making <strong>and</strong> the second is on the fear of batik cultural erosion which cannot be overcome by the<br />
development of production-based work systems that only emphasize efficiency. From our findings, we<br />
are suggesting that any attempt to develop an ICT-based work system for batik microenterprise must<br />
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Nor Laila Md Noor <strong>and</strong> Ariza Nordin<br />
not ignore these two concerns. Our future work will be on the exploration of future ICT-based work<br />
systems for batik microenterprise.<br />
Acknowledgements<br />
This research is supported by the research grant (Grant No: 01-01-01-SF0068) awarded by the<br />
Ministry of Science, Technology <strong>and</strong> Innovation, Malaysia under the E-Science Grants Scheme.<br />
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358
HOT-fit Evaluation Framework: Validation Using Case<br />
Studies <strong>and</strong> Qualitative Systematic Review in Health<br />
<strong>Information</strong> Systems Evaluation Adoption<br />
Maryati Mohd Yusof<br />
Universiti Kebangsaan Malaysia, Bangi, Malaysia<br />
mmy@ftsm.ukm.my<br />
Abstract: Rigorous evaluation allows us to assess the extent to which Health <strong>Information</strong> Systems (HIS) achieve<br />
their intended outcomes <strong>and</strong> support the services of healthcare delivery systems. We learn that current<br />
evaluation methods focus on different aspects of HIS <strong>and</strong> they can be improved upon. Based on previous<br />
evaluation studies, we developed a new evaluation framework, HOT-fit (Human, Organization <strong>and</strong> Technology-fit)<br />
that focus on the three factors <strong>and</strong> their fit with each other. It also makes use of earlier models of IS evaluation,<br />
particularly the IS Success Model <strong>and</strong> the IT-Organisation Fit Model. The framework was validated <strong>using</strong> a case<br />
study of a Fundus Imaging System (FIS) of a primary care organization in the UK <strong>and</strong> a qualitative systematic<br />
review of fifty-five case studies. The applicability of the framework is currently being tested in another case study<br />
of a Critical Care <strong>Information</strong> Systems (CCIS) of a tertiary care in Malaysia. The framework has been<br />
progressively refined over the evaluation phases in terms of its dimension, measures <strong>and</strong> sub measures. The<br />
research identifies <strong>and</strong> highlights the following dominant adoption factors: technology (ease of use, system<br />
usefulness, system flexibility, time efficiency, information accessibility <strong>and</strong> relevancy); human (user training, user<br />
perception, user roles, user skills, clarity of system purpose, user involvement); organisation (leadership <strong>and</strong><br />
support, clinical process, user involvement, internal communication, inter organisational system, as well as the fit<br />
between them. The case studies <strong>and</strong> synthesis of the selected evaluation studies of HIS adoption has brought<br />
together disparate findings that summarize the research area, which can be used to better underst<strong>and</strong> adoption<br />
issues <strong>and</strong> to learn from earlier adoption cases. The study shows that comprehensive, specific evaluation factors,<br />
dimensions <strong>and</strong> measures in the HOT-fit framework are applicable in HIS evaluation. We argue that the use of<br />
such framework is useful for the evaluation of both HIS <strong>and</strong> IS, regardless of their context.<br />
Keywords: health information systems, evaluation, framework, human factors, organizational factors, qualitative<br />
1. Introduction<br />
Rigorous evaluation enables one to assess the extent to which HIS achieve its outcomes <strong>and</strong> support<br />
the services of healthcare delivery systems <strong>and</strong> to guide the future investment <strong>and</strong> development of<br />
HIS. However, HIS evaluation is unclear <strong>and</strong> conf<strong>using</strong> (Gremy, 1999) <strong>and</strong> it is argued that an<br />
existing strong foundation for good evaluation theory <strong>and</strong> practice is yet to be disseminated in an<br />
underst<strong>and</strong>able form (Ammenwerth et al., 2004). Evaluation of HIS is also difficult to perform,<br />
particularly in selecting a framework to be applied <strong>and</strong> methods to be used (Mohd. Yusof et al.<br />
2008a). In the search for a comprehensive evaluation approach that could appropriately guide <strong>and</strong><br />
facilitate the evaluation of HIS, we learned the existing evaluation frameworks are incomprehensive in<br />
terms incorporating three important evaluation aspects: human, organisation, technology <strong>and</strong> the fit<br />
between them <strong>and</strong>/or use unspecific evaluation measures. Therefore, a critical review was taken to<br />
investigate this problem further. The aim of this paper is to discuss the progressive design of a new<br />
evaluation framework for HIS, known as HOT-fit (Human, Organization <strong>and</strong> Technology-fit) <strong>and</strong> its<br />
validation <strong>using</strong> case studies <strong>and</strong> a qualitative systematic review.<br />
2. Theoretical background<br />
A critical appraisal of selected HIS evaluation frameworks is undertaken in order to identify their<br />
evaluation dimensions <strong>and</strong> measures. The frameworks are compared based on their inclusion of<br />
human, organisational <strong>and</strong> technological factors. Our review indicates that current evaluation methods<br />
can be improved upon. We found that each of the considered frameworks evaluates different aspects<br />
of HIS. Therefore, it is possible to consider, when evaluating HIS, a more comprehensive HIS<br />
evaluation framework that would incorporate all technological, human <strong>and</strong> organisational issues. The<br />
importance of human <strong>and</strong> organisational factors in the development <strong>and</strong> implementation of IS has<br />
been advocated in the IS literature (Kaplan <strong>and</strong> Harris-Solomone, 2009). Rigorous evaluation of HIS<br />
can be undertaken by addressing these factors as well as the fit or alignment between them (Mohd.<br />
Yusof et al., 2008a).<br />
The proposed HOT-fit framework was developed after a critical investigation of the existing findings of<br />
HIS <strong>and</strong> IS evaluation studies (See Figure 1). We adopted The IS Success Model because of its<br />
comprehensive, specific evaluation categories, extensive validation <strong>and</strong> its applicability to HIS<br />
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Maryati Mohd Yusof<br />
evaluation (De Lone <strong>and</strong> McLean, 1992; De Lone <strong>and</strong> McLean, 2004). HOT-fit makes use of the IS<br />
Success Model in categorising its evaluation factors, dimensions <strong>and</strong> measures. Findings from the<br />
selected literature of IS <strong>and</strong> Health Informatics were used to identify the evaluation dimensions <strong>and</strong><br />
measures of HIS. In addition, the IT-Organisation Fit Model (Scott Morton, 1991) is used to<br />
complement the IS Success Model by integrating its featured organisational factors <strong>and</strong> the concept<br />
of fit between the human, organisational <strong>and</strong> technological factors.<br />
Figure 1: Human-Organization-Technology fit (HOT-fit) framework<br />
Human, organisation <strong>and</strong> technology are the essential components of IS <strong>and</strong> the impacts of HIS are<br />
assessed in the net benefits. These three factors <strong>and</strong> the impacts of HIS correspond to nine<br />
interrelated dimensions of HIS success: System Quality, <strong>Information</strong> Quality, Service Quality, System<br />
Development, System Use, User Satisfaction, Organisational Structure, Organisational Environment<br />
<strong>and</strong> Net Benefits. Each of these dimensions is associated with a number of evaluation measures. The<br />
description of the evaluation factors, dimensions <strong>and</strong> measures of the earlier version of the proposed<br />
HOT-fit framework is discussed extensively in Mohd. Yusof et al., 2008b. During the analysis of the<br />
systematic review, we identified System Development, a new dimension of human factor, which<br />
relates to a number of processes in a system development life cycle, including clarity of system<br />
purpose, feasibility study, planning, design, system selection, installation strategy, conversion style<br />
<strong>and</strong> maintenance. Other relevant evaluation measures include project management, scheduling, <strong>and</strong><br />
momentum, user involvement <strong>and</strong> relationship with technical people.<br />
Based on its comprehensive dimensions <strong>and</strong> outcome measures, the framework can be used to<br />
evaluate the performance, effectiveness <strong>and</strong> impact of HIS or IT in healthcare settings. The three<br />
evaluation factors can be evaluated throughout the whole system development life cycle as specified<br />
in the System Development dimension. As mentioned above, each phase focuses on different<br />
issues. This framework can be applied <strong>using</strong> qualitative, quantitative or a combination of both<br />
approaches. Subsequently, any data collection methods from both approaches can be employed<br />
during the conduct of the evaluation.<br />
3. Research methodology<br />
3.1 Research approach<br />
Our research design consists of two research strategies, namely case study <strong>and</strong> systematic review.<br />
Our qualitative approach employs both inductive <strong>and</strong> deductive reasoning. In being inductive, we<br />
repeated cycles of data collection <strong>and</strong> analysis to generate propositions inductively from the data<br />
cycles (<strong>using</strong> data already collected as well new data collected by that purpose) (Kaplan <strong>and</strong> Maxwell,<br />
1994). On the contrary, we used the deductive reasoning to test prior propositions associated with the<br />
proposed framework on new cases (Murphy et al., 1998).<br />
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Maryati Mohd Yusof<br />
In order to validate its usefulness, the HOT-fit framework was tested in real clinical settings of a<br />
Fundus Imaging System in a NHS primary care organisation in the UK. The framework was further<br />
validated <strong>using</strong> fifty-five case studies selected in the systematic review. We then apply the framework<br />
in another case study of a Critical Care <strong>Information</strong> Systems (CCIS) used in a tertiary care in<br />
Malaysia. The approach used in this study was that of a subjectivist, case study <strong>and</strong> systematic<br />
review strategy employing qualitative methods.<br />
Our research design consists of two research strategies, namely case studies <strong>and</strong> a systematic<br />
review that were conducted in two phases (See Figure 2). Another case study is being conducted in<br />
the third phase.<br />
Figure 2: Validation process for the Human-Organization-Technology fit (HOT-fit) framework<br />
The exploratory case study provide us the underst<strong>and</strong>ing of the actual clinical setting, thereby guided<br />
us to select <strong>and</strong> to better underst<strong>and</strong> the relevant studies in our second research strategy, the<br />
systematic review. The review was carried out over 12 months <strong>using</strong> a larger sample of case studies<br />
(fifty five cases) from various sources, health information systems types <strong>and</strong> clinical contexts. The<br />
decision to conduct this systematic review was taken on the basis that it can provide wider<br />
perspectives to the adoption issues of HIS, particularly in the critical factors that contribute to its<br />
success <strong>and</strong> failure. The use of systematic review was also chosen in order to validate our proposed<br />
framework further, which spans across the human, organisation <strong>and</strong> technology issue <strong>and</strong> the fit<br />
between them.<br />
A systematic review comprises the synthesis of both qualitative <strong>and</strong> quantitative research in a<br />
comprehensive manner, thus provides the underst<strong>and</strong>ing of various contexts of Health <strong>Information</strong><br />
Systems (HIS) adoption in clinical practice. The ability to examine the most critical adoption factors<br />
<strong>and</strong> to validate the proposed framework across a bigger sample of case studies <strong>using</strong> the systematic<br />
review is argued to be more advantageous <strong>and</strong> informative compared to the conduct of a few more<br />
case studies. Time factor is another issue involved in the selection of the systematic review since the<br />
conduct of individual case study is much more time consuming as opposed to the conduct of a<br />
systematic review. The information from the variance of case studies also offered richer information<br />
<strong>and</strong> more outlooks to the adoption issues. In addition, the systematic review can support decisionmaking<br />
by informing the most critical factors for HIS adoption.<br />
This systematic review consists of a number of discrete activities: 1) identification of the need for a<br />
review, 2) formulation of a research question, 3) development of a review protocol 4) location of<br />
studies, 5) selection of primary studies, 6) quality assessment of included studies, 7) data extraction,<br />
8) data analysis, 9) interpretation of results, 10) report writing.<br />
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The search for articles that addressed issues pertinent to HIS evaluation was conducted <strong>using</strong> a<br />
number of databases ranging from medical, informatics <strong>and</strong> engineering field. The search terms were<br />
individualized for each database <strong>and</strong> included terms for: (health or medical) informatics, system,<br />
computer based, evaluation <strong>and</strong> assessment. In this systematic review, evaluation study is defined as<br />
a methodical, empirical assessment of health information system in clinical settings. The type of study<br />
design selected is case study as it provides underst<strong>and</strong>ing <strong>and</strong> insight into the research question.<br />
Thus, other study designs, such as experiment <strong>and</strong> survey are not included in this systematic review.<br />
HIS st<strong>and</strong>s for any computer based information systems that involves human interaction used in<br />
healthcare settings. All computer or knowledge based training <strong>and</strong> education systems for healthcare<br />
professional are excluded in the review, as they are not directly related to clinical care (or clinical use<br />
of technology). Searches were limited to human subjects <strong>and</strong> articles published in English, between<br />
1985 <strong>and</strong> 2005, <strong>and</strong> were completed from January to February 2006. The studies were searched<br />
both electronically <strong>and</strong> manually in order to cover a comprehensive range of literature. The selection<br />
of studies involves a multi-stage process] (See Figure 3).<br />
Figure 3: Methods of study selection<br />
A number of steps were taken to ensure the quality of both research strategies. For the case study,<br />
two tests, namely construct validity <strong>and</strong> reliability were done to establish the quality of the empirical<br />
research. In addition, potential bias was overcome by conducting a reliability test <strong>and</strong> data<br />
triangulation. Foc<strong>using</strong> on the systematic review, a checklist of the assessment of qualitative research<br />
was used to assess all selected empirical papers by judging their serious flaw.<br />
3.2 Application of framework<br />
The HOT-fit framework was used as a guideline in the evaluation of the FIS <strong>and</strong> CCIS. Based on the<br />
HOT-fit framework, four techniques were used to analyse the results: coding, analytic memos (such<br />
as reflection notes, displays, <strong>and</strong> concept maps), <strong>and</strong> contextual <strong>and</strong> narrative analysis (Miles <strong>and</strong><br />
Huberman, 1994; Kaplan <strong>and</strong> Maxwell, 1994). The field notes were fully transcribed on marginmarked<br />
paper. The margins were used to note any reflections, themes relevant to HOT-fit <strong>and</strong><br />
statements which were unclear or needed to be confirmed with the participants. The data were coded<br />
<strong>and</strong> categorised under similar themes or concepts of the HOT-fit framework <strong>and</strong> refined throughout a<br />
series of analyses. These codes correspond to each factor, dimensions <strong>and</strong> measures described in<br />
the HOT-fit framework (See Figure 1). Further, texts under the same category were compared to<br />
identify variations <strong>and</strong> nuances in meanings. Categories were compared to discover connections<br />
between themes. Concept maps were drawn to underst<strong>and</strong> the relationship between a number of<br />
concepts involved in the evaluation of the FIS.<br />
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Further framework validation <strong>and</strong> identification of HIS adoption factors were undertaken through a<br />
qualitative systematic review. A number of the following steps were taken to identify the adoption<br />
factors of Health <strong>Information</strong> Systems in the selected studies (Adapted from Wyatt (personal<br />
communication, October 11, 2005)):<br />
1. Assess the adoption status of each study. This was done by classifying the study outcome as<br />
positive, negative, mixed positive <strong>and</strong> negative or unclear for the following adoption criteria (that are<br />
based on the phases in the system development life cycle): system installation, clinical acceptance,<br />
clinical use at specified months, impact on clinical practice, impact on patient care <strong>and</strong> impact on<br />
health organisation.<br />
2. For each study with at least one definite positive, mixed or negative outcome, assess the presence<br />
of the following potential success factors according to the HOT-fit framework <strong>and</strong> emerging themes:<br />
Technology factors such as ease of system use, system flexibility <strong>and</strong> information accessibility.<br />
Human factors such as user training <strong>and</strong> user attitude towards system.<br />
Organisation factors such as leadership, system champion <strong>and</strong> clinical process.<br />
All three factors of technology, human <strong>and</strong> organisation that influence the net benefits.<br />
Factors that influence specific type of system<br />
The fit between human, organisation <strong>and</strong> technology.<br />
3. Identify the most critical adoption factors according to their occurrences in the case studies <strong>and</strong><br />
their association with the success <strong>and</strong> failure of HIS adoption cases.<br />
4. Examine the relationship between these critical factors <strong>using</strong> a conceptual map.<br />
4. Results<br />
The research identifies <strong>and</strong> highlights the following dominant adoption factors: technology (ease of<br />
use, system usefulness, system flexibility, response time/turnaround time, information accessibility,<br />
information relevancy, technical support); human (clarity of system purpose, user involvement, system<br />
design, user training, user perception, user skill/knowledge, user role); organisational (clinical<br />
process, leadership, champion, medical sponsorship, project committee, bridger/mediator), internal<br />
communication, resources, organisational readiness, Inter-organisational Systems as well as fit<br />
between them.<br />
5. Discussion <strong>and</strong> conclusions<br />
The multi-disciplinary approach of HOT-fit addresses the essential components of IS, namely human,<br />
organisation <strong>and</strong> technology, <strong>and</strong> the fit between them <strong>using</strong> a comprehensive, continuous <strong>and</strong><br />
systematic approach. The use of HOT-fit framework can unfold the complexity <strong>and</strong> can greatly<br />
increase the underst<strong>and</strong>ing of the whole human, organisational <strong>and</strong> technology issues, their<br />
relationships <strong>and</strong> fit with each other, system problems <strong>and</strong> performance. In addition, the HOT-fit<br />
framework can also be used to identify the process <strong>and</strong> information requirement of complex<br />
application. HOT-fit provides comprehensive evaluation factors, dimensions <strong>and</strong> measures to analyse<br />
the overall view of the essential system components, development, use, <strong>and</strong> net benefits. It also<br />
incorporates the system development dimension to enable a continuous <strong>and</strong> systematic evaluation.<br />
These are the elements that should be identified to ensure the realisation of HIS.<br />
We evaluate the adoption of two case studies <strong>and</strong> carried out a systematic review to justify their<br />
realisation <strong>and</strong> relative contributing factors. The findings offer a strong indication of the applicability<br />
of the framework to HIS evaluation where the adoption factors in the human, organization, technology<br />
<strong>and</strong> fit between them identified in both research strategies confirmed with the essence of the<br />
proposed framework – the three factors, their respective dimensions, measures <strong>and</strong> the fit between<br />
them. A number of challenges have been encountered while applying the HOT-fit framework in data<br />
analysis. First, there are a number of data that share the same evaluation measures; careful<br />
consideration has to be taken in selecting the most appropriate measures for each data. Second, the<br />
classification of data analysis according to the three evaluation factors has affected the flow of the<br />
narrative approach of presenting the data <strong>and</strong> can result in confusion to the reader.<br />
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Maryati Mohd Yusof<br />
This systematic review has a number of unavoidable limitations (Chaudhry et al., 2006). Firstly,<br />
although we searched the literature comprehensively, we were able to identify a limited number of<br />
articles related to the case studies of the evaluation of HIS adoption. Many studies relevant to our<br />
topics used either experimental methods such as r<strong>and</strong>omised controlled clinical trials or surveys only<br />
which offer limited insight to HIS adoption. A large number of studies lacked rigour in measuring the<br />
HIS adoption, although their scope was relevant to our research questions. These studies only focus<br />
on limited evaluation aspects, which do not inform the adoption status sufficiently. Reports on system<br />
development, adoption status <strong>and</strong> human <strong>and</strong> organisational issues were also unavailable or limited<br />
in a number of studies.<br />
A number of studies barely described the methodology used in obtaining the result, making it difficult<br />
to assess whether the study was systematic or not, <strong>and</strong> which methodology was used. These studies<br />
present significant findings of the development <strong>and</strong> net benefits of HIS adoption despite the lack of<br />
clear methodological descriptions. They presented the success or failure of HIS adoption in a story<br />
telling manner. Conflict in our selection process, as to whether or not to include them in the systematic<br />
review, was resolved by considering the importance of the findings of these studies to theory <strong>and</strong><br />
practice. The credibility of these studies was justified by checking the credibility of their source or the<br />
existence of such kind of systems <strong>and</strong> their respective settings. A number of authors were contacted<br />
<strong>and</strong> the internet was searched to obtain additional information on the methodology <strong>and</strong> findings of the<br />
selected studies. However, the former approach (contacting authors) was not always feasible, as the<br />
authors were unavailable or unable for other reasons to respond to the reviewer’s queries (Lloyd<br />
Jones, 2004).<br />
Secondly, the selected studies involve a wide range of systems that are described <strong>using</strong> various<br />
terms. We attempted to resolve this problem by structuring our review according to our well defined<br />
HIS taxonomy (Mohd. Yusof et al., 2008a) <strong>and</strong> by identifying both system definitions <strong>and</strong><br />
characteristics.<br />
Thirdly, the heterogeneity in the selected studies caused difficulties in selecting them for inclusion <strong>and</strong><br />
subsequently in extracting <strong>and</strong> analysing them. The use of inconsistent terms <strong>and</strong> jargon, studies<br />
description, methodology <strong>and</strong> research findings created confusion. Further, data from a series of<br />
publications that were produced from the same study were extracted together to gain a broader<br />
picture of the overall evaluation process of that particular study. The difficulty of this process lies in the<br />
effort to extract the combination of comprehensive data from the separate or overlapping/redundant/<br />
replicated findings <strong>and</strong> heterogeneous reporting styles in different publications of the same study.<br />
Fourthly, the relationship of the reviewer, who is conducting a systematic review, with the primary<br />
case studies included in his/her review is quite different from the type of relationship the primary<br />
researchers have with their cases. Its difference lies in a lack of direct contact that enables the<br />
reviewer to fully experience the conduct of the research, observe the setting, <strong>and</strong> enquire participants<br />
for additional information, such as term clarification or event occurrences (Lloyd Jones, 2004). The<br />
study findings of the systematic review were limited by the findings reported in the primary study only.<br />
Similar to the approach taken to check the credibility of the primary studies, authors were contacted to<br />
provide further information, although again this may not always be feasible.<br />
Although our case study focused on specific settings, the proposed evaluation framework is<br />
potentially useful to researchers <strong>and</strong> practitioners for conducting thorough evaluation studies of other<br />
HIS or IT applications in healthcare settings. Thus, our comparative studies can be exp<strong>and</strong>ed in<br />
various system types <strong>and</strong> domains to identify general <strong>and</strong> specific adoption factors. The evaluation<br />
measures can be progressively refined <strong>and</strong> defined into sub measures to enable evaluation at the<br />
granule level, in addition to the general level. As proposed here, the framework can <strong>and</strong> should be<br />
applied in a flexible way, taking into account different contexts <strong>and</strong> purposes, stakeholders’ point of<br />
views, phases in system development life cycle, <strong>and</strong> evaluation methods.<br />
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Remembering <strong>and</strong> Recalling: The ERP System as an<br />
Organizational Memory<br />
Gunilla Myreteg<br />
Uppsala University, Sweden<br />
gunilla.myreteg@fek.uu.se<br />
Abstract: The purpose of an enterprise resource planning (ERP) system is to bring several benefits to the<br />
company by <strong>using</strong> a mutual database <strong>and</strong> real time data. Empirical studies yet show that several companies<br />
judge the ERP project as unsuccessful. Implementing <strong>and</strong> <strong>using</strong> an ERP system is a complex process. The<br />
organization must decide what information about daily events <strong>and</strong> transactions needs to be saved <strong>and</strong> thereby<br />
possible to take out for future use. How is the ERP system involved in the process of creating, <strong>using</strong>, <strong>and</strong><br />
maintaining a purposeful data base in an organization? The paper is based on a case study of a medium sized<br />
Swedish manufacturing company during the process of implementing <strong>and</strong> <strong>using</strong> an ERP system. The IT artefact<br />
is conceptualized as an evolving <strong>and</strong> embedded system, which is brought into a dynamic social context. The<br />
social dimension makes the process of implementing an ERP system complex <strong>and</strong> indeterminate. The analysis<br />
investigates the possibilities <strong>and</strong> obstacles that may occur during the process, regarding how, when <strong>and</strong> by<br />
whom information should be stored in, or taken out of, the ERP system. The purpose is to develop an<br />
underst<strong>and</strong>ing of how an ERP system is involved in the process of storing <strong>and</strong> recalling information about events<br />
<strong>and</strong> transactions taking place in the organization. The analysis investigates the ERP system as part of the<br />
organizational memory, <strong>using</strong> the theoretical concepts acquisition, retention, maintenance, search <strong>and</strong> retrieval.<br />
The model is found to be fruitful, since it enhances our underst<strong>and</strong>ing of ERP system usage in an organization.<br />
The analysis investigates the difficulties users encountered, <strong>and</strong> suggests explanations to these difficulties based<br />
on the model of the organizational memory. The aspect of maintenance of information showed to be an<br />
especially important aspect to underst<strong>and</strong> the obstacles to making use of an ERP system’s potential. An ERP<br />
system has the technical possibility to store information for a very long time. Since the system does not<br />
discriminate between high <strong>and</strong> low quality data, it will also store incorrect data forever. A conclusion drawn is that<br />
managers <strong>and</strong> users need to consciously plan the use of the ERP system as part of the organizational memory in<br />
order to utilize the potential benefits of the system. The ERP system per se does not create <strong>and</strong> maintain an<br />
efficient information usage.<br />
Keywords: ERP systems, information processing, information needs, organizational memory<br />
1. Introduction<br />
The starting point is that organizations strive for efficiency <strong>and</strong> for making good decisions. Decision<br />
making is not, however, a rational process but can be described as a bounded rationality. The<br />
decision maker settles for a satisfactory alternative, compared to the aspirations she has formed<br />
before the decision (Simon, 1979). Aspiration levels are changing as new experiences are made<br />
(Simon, 1979). Earlier experiences made by actors in an organization are thus of importance to<br />
underst<strong>and</strong> what is going on in an organization today.<br />
Earlier experiences <strong>and</strong> knowledge of the past are, following this logic, of importance to an<br />
organization <strong>and</strong> its quest for efficiency. History is remembered as memories. Not only do the<br />
individual’s memories come to use in an organization; there are means to retain memories within the<br />
organization (Walsh <strong>and</strong> Ungson, 1991). Organizational memory is defined as “the means by which<br />
knowledge of the past is brought to bear on present activities, thus resulting in higher or lower levels<br />
of organizational effectiveness” (Stein <strong>and</strong> Zwass, 1995, p. 89). The definition involves the<br />
assumption that organizational memory is connected to organizational effectiveness. It allows the<br />
availability of an organizational memory to lead to higher as well as lower levels of effectiveness. The<br />
organizational memory involves possibilities as well as obstacles to members that are active in an<br />
organization. Activities may concern a great variety of tasks, such as planning, decision making,<br />
leading, controlling, communication <strong>and</strong> so on.<br />
Organizational memory need to rely on information technology (IT) support, <strong>and</strong> the expectation is<br />
that an IT-supported memory carries advantages in fulfilling the requirements of organizational<br />
effectiveness <strong>and</strong> decision making (Stein <strong>and</strong> Zwass, 1995). In previous research, findings suggest<br />
that managers need to view IT as a resource, rather than IT in a service role, to ensure the usage of<br />
opportunities for competitive actions (Vannoy <strong>and</strong> Salam, 2010). An ERP system that reaches across<br />
the complete organization has the possibility to be successful in supporting the organizational<br />
memory, since it is important that the IT support is distributed throughout the organization (Stein <strong>and</strong><br />
Zwass, 1995). An ERP system is an evolving <strong>and</strong> embedded system which is brought into a dynamic<br />
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social context (Orlikowski, 2000). Organizational life is complex with a lot of things going on: a “mishmash<br />
of interrelated influences” (Scapens, 2006, p. 10) that we need to underst<strong>and</strong>. The social<br />
dimension makes the process of implementing an ERP system complex <strong>and</strong> indeterminate.<br />
The analysis investigates the possibilities <strong>and</strong> obstacles that may occur during the process, regarding<br />
how, when <strong>and</strong> by whom information should be stored in, or taken out of, the ERP system. The<br />
purpose is to develop an underst<strong>and</strong>ing of how an ERP system is involved in the process of storing<br />
<strong>and</strong> recalling information about events <strong>and</strong> transactions taking place in the organization. The<br />
underst<strong>and</strong>ing will however not lead to a generalization of explanations that predict the process,<br />
conditioned or restricted by a number of contingency variables, or the like. This is not possible, since<br />
human behaviour is carried out in a complex environment <strong>and</strong> also depends on “the very facts of<br />
human long-term memory <strong>and</strong> of the capability of human beings individually <strong>and</strong> collectively, to learn.”<br />
(Simon, 1979, p. 510) Organizational life <strong>and</strong> practices are affected by broad economic, social, <strong>and</strong><br />
organizational trends, but are also affected <strong>and</strong> shaped by unique factors in the specific organization.<br />
2. Organizational memory <strong>and</strong> ERP systems<br />
<strong>Information</strong> about the past can <strong>and</strong> is stored in the organization (Walsh <strong>and</strong> Ungson, 1991). The<br />
possibilities of automation of routines through the use of IT (Zuboff, 1988) have led to a reducing of<br />
costs for information storage. Still, not everything is recorded; a distinction is made between what is<br />
considered relevant to future actions or not (Levitt <strong>and</strong> March, 1988). The organizational memory is<br />
orderly but contradictive, due to inconsistencies <strong>and</strong> ambiguities (Levitt <strong>and</strong> March, 1988). Claims are<br />
made that the ERP system may be used by management as a means to take control of processes of<br />
efficiency, <strong>and</strong> ensuring a wise decision making, since it supports st<strong>and</strong>ardization <strong>and</strong> automation,<br />
which may serve as a foundation for mutual underst<strong>and</strong>ing, coordination, <strong>and</strong> the sharing of real-time<br />
information within the organization (Chapman, 2005). The ERP system is embedded within the<br />
organization as it is closely involved with surrounding conditions (Orlikowski, 2000). Experience plays<br />
an important role when an ERP system is implemented, <strong>and</strong> both formal training <strong>and</strong> participation in<br />
practice are useful means in the process of learning the new technology (Robey, et al., 2000). A risk<br />
lies in an organization relying on past experiences so that they form a competency trap (Levitt <strong>and</strong><br />
March, 1988), where old experiences have shaped the organizational memory in a way that becomes<br />
an obstacle to letting new experiences change organizational action (Robey, et al., 2000) even when<br />
the old procedure is inferior.<br />
The notion of organizational memory has been elaborated upon in the field of information systems by<br />
use of the theoretical concepts acquisition, retention, maintenance, search <strong>and</strong> retrieval (Figure 1).<br />
Acquisition Retention Search Retrieval<br />
Producer of<br />
Holding storage<br />
(ERP system)<br />
Consumer of<br />
information information<br />
Maintenance<br />
Figure 1: The ERP system as part of the organizational memory (elaborated from Stein <strong>and</strong> Zwass,<br />
1995, p. 103).<br />
Acquisition is when the organization, by internal or external, organizational or individual producers of<br />
information, acquires information. If this information is put into a holding storage, such as an ERP<br />
system, the information is retained within the organization. An organizational memory is created. After<br />
retention it is necessary to maintain the information within the holding storage, so that it is saved over<br />
time. This leads to the possibility of later making a search for the information in the holding storage.<br />
This possibility means that organizational memories can be recalled: retrieval. The fact that<br />
information may be acquired <strong>and</strong> saved by one person, <strong>and</strong> later searched for <strong>and</strong> “remembered” by<br />
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another shows us that we are talking about an organizational memory <strong>and</strong> not an individual memory.<br />
Our individual memories are personal. Organizational memories are impersonal <strong>and</strong> can be retrieved<br />
by anyone that have access to the holding storage <strong>and</strong> have the capability or capacity of making the<br />
search (cf. Stein <strong>and</strong> Zwass, 1995).<br />
In order to access information from the organizational memory, members first have to locate the<br />
information. The search process may be carried out by a search engine in the information system, or<br />
perhaps by an e-mail broadcast on the company Intranet (An<strong>and</strong>, et al., 1998). Acquisitions are made<br />
by producers of information, while retrievals are made by the consumers of information (Stein &<br />
Zwass 1995). The present analysis will investigate if it is fruitful to view the ERP system as part of the<br />
organizational memory.<br />
3. The case of ABG, <strong>and</strong> users’ expectations<br />
ABG is a medium sized manufacturing company in Sweden. The present article reports the findings<br />
concerning two of the company’s three business areas (Alpha <strong>and</strong> Beta). The case study was carried<br />
out from 2003 to 2005. Interviews, observation <strong>and</strong> documentation were used to construct a deep <strong>and</strong><br />
rich description of the process where ABG selected <strong>and</strong> implemented an ERP system.<br />
The studied users were: (1) employees in the production that were concerned with a high degree of<br />
st<strong>and</strong>ardized work tasks (business area Alpha), <strong>and</strong> (2) employees involved in production<br />
characterized by high quality st<strong>and</strong>ards <strong>and</strong> non-st<strong>and</strong>ardized work tasks (business area Beta). The<br />
former considered the ERP system to be of minor importance to the performance of tasks. They also<br />
thought that the use of ERP would take time away from production without leading to higher customer<br />
satisfaction. An IT system was not considered to be able to replace human experience <strong>and</strong> the<br />
intuitive feeling of how to plan production. The latter users considered the ERP system to have great<br />
potential as a support to their activities. The ERP system was expected to result in lower costs due to<br />
errors (by specifying instructions as know-how within the ERP system) <strong>and</strong> an increased customer<br />
satisfaction (by less number of complaints).<br />
Further users were (3) the administrative staff, performing accounting, payments <strong>and</strong> reporting tasks,<br />
<strong>and</strong> (4) the sales force. Administration wanted the ERP system to be simple <strong>and</strong> intuitive to use, so<br />
that users would make fewer mistakes within the system. Time was often used for correcting the<br />
mistakes that administration spotted, that is, if a mistake was spotted. They considered it better if<br />
users would use IT correctly, so administration would be able to work more efficiently. The sales force<br />
was located on the firm’s premises <strong>and</strong> viewed the ERP system to be an important tool for their daily<br />
work. The ERP system was expected to help them find better ways to make corrections <strong>and</strong> notations<br />
to customer orders, since customers often returned with suggestions of changes, or since production<br />
made suggestions for changes during the development of a customer tailed solution. Now, corrections<br />
were often done by pencil notations on the original order print out, or by sticking a post it note on to<br />
the print out. Often, it was difficult to know what was included in the final order due to a number of<br />
consecutive changes or messy pencil notes. A final user (5), management, considered the ERP<br />
system to be a means of getting users to act more responsible when it came to <strong>using</strong> IT as a support<br />
to all various tasks. They found there was a need of awareness that IT was supposed to be used for<br />
all information management in the firm, by all users <strong>and</strong> with an improved consistency.<br />
4. Using the ERP system: Organizational memory in practice<br />
Not until the ERP system was chosen <strong>and</strong> implemented, the majority of informants said they<br />
understood what the ERP system was all about. After <strong>using</strong> the ERP system, the general opinion was<br />
that it technically had potential for the company, <strong>and</strong> it was considered to be a sound investment. Still,<br />
users found that there were obstacles or impediments in realizing the potential. It was difficult to know<br />
how to use the ERP system, <strong>and</strong> several users were confused when they realized that all routines<br />
were affected: “With the new ERP system everything has changed!” (Accounting clerk, December<br />
2004). A majority of informants mentioned the need of a “new way of thinking”. Users in production<br />
had come to realize that “the ERP system will never be better than we ourselves make it” (Operations<br />
manager, January 2005). There were troubles in <strong>using</strong> the smart functionalities that the supplier had<br />
demonstrated. The h<strong>and</strong>ling of the system was generally considered to be more intricate than had<br />
been expected.<br />
All users were having difficulties, in varying degrees, <strong>using</strong> the ERP system. Some typical situations<br />
kept reoccurring. One problem was that users did not know where to find certain information or a<br />
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needed routine. Another problem was that when the user had found the routine, he did not know how<br />
to work it. A third problem that kept on surfacing was how to take advantage of the smart solutions or<br />
automatic data processing functions that the vendor had demonstrated at the sale. An explanation to<br />
why these smart functions could not be used lay in the poor quality of the database. Data was often<br />
incorrect or incomplete, <strong>and</strong> an unsolved issue concerned the matter of when <strong>and</strong> who should fill in<br />
the gaps <strong>and</strong> correct poor data.<br />
4.1 Where do I...?<br />
Based on the model of the organizational memory by Stein <strong>and</strong> Zwass (1995) the situation of where<br />
information or a data routine was located needs to be separated into two instances. The first relates to<br />
the acquisition <strong>and</strong> retention of a memory. When a user experiences something that should be<br />
remembered in the future, information has to be fed into the ERP system. This is done through the<br />
use of a data routine, <strong>and</strong> ensures the retention of the experience. The individual memory is hereby<br />
transformed into an organizational memory. An example is when a sales person receives a call from a<br />
customer wanting to order a product. The sales person has to know where to find the order form. This<br />
instance may be paralleled to finding something on a map: the user knows there is a routine, <strong>and</strong><br />
needs to know how to start it. This type of problem decreased as users got acquainted with the ERP<br />
system.<br />
Another instance was when a user wanted to find a piece of information. This is a matter of retrieval of<br />
information that exists in the data base. An example is when a production planner wants to know how<br />
many pieces of a certain detail are needed to make one product of type X. The production planner<br />
needs to know how to search for the specifications for product X, <strong>and</strong> where in the list of<br />
specifications the wanted detail occurs, which might be in several operations. This problem also<br />
decreased as users got more <strong>and</strong> more acquainted with the ERP system. For some information the<br />
problem however remained. This was when the design of the ERP system was not prepared for a<br />
certain mode of search. For instance, the sales person in Beta often got a call from customers saying<br />
“I want to order what I had last time, but I don’t know what you call that thingy!” Since the last order<br />
may have been placed <strong>and</strong> delivered two or three years earlier, the sales person had no chance of<br />
remembering what product the customer had bought. Since neither of them knew the name or article<br />
number of the product, it was impossible to fill out the electronic order form. To proceed, the sales<br />
person needed to check the customer’s history to see old orders, <strong>and</strong> through this list find the article<br />
number of the wanted product. The ERP system that were used did not, however, support a search<br />
for order history sorted by customer. The only way for the user to find the needed information was to<br />
instead turn to the old IT system, <strong>and</strong> make the search there. Since no new information was entered<br />
into the old IT system, this would soon be out of date; new orders were not retained. The solution to<br />
the problem was therefore seen as temporary, <strong>and</strong> a better solution was needed.<br />
4.2 How do I...?<br />
A firm has to decide <strong>and</strong> communicate what information is necessary to retain (Stein <strong>and</strong> Zwass,<br />
1995). The analysis identifies this to be an intricate potential obstacle to a firm’s use of an ERP<br />
system. When the needed data routine is found, it is not always easy to fill it out. The question often<br />
is: How do I make this routine work out? The routine might ask for some information to be entered into<br />
a data field without the user being sure what information is requested, or the user has to decide<br />
whether a box should be ticked or not. Informants tried to solve this type of problem by making lists<br />
for themselves where they noted explanations or advice on how to fill out certain fields et cetera.<br />
Advice was given by the administrative staff, by the vendor of the ERP system <strong>and</strong> also between<br />
colleagues. Sometimes, informants said, it was not possible to wait to get some good advice because<br />
of the hurry to complete tasks; perhaps an order was running the risk of getting a late delivery, or the<br />
hurry was due to difficulties in planning <strong>and</strong> the risk of a fall in production. In these cases users felt an<br />
urge to move the goods forward in the chain of productions. For these instances he or she had to<br />
come up with a solution, <strong>and</strong> sometimes the simple solution was to chance it <strong>and</strong> insert some<br />
information regardless of its quality. This was especially mentioned among users in production in<br />
department Alpha.<br />
Another example of solution that illustrates the users’ interest of finding simple solutions is the issue<br />
of creating a new article in the ERP system. The norm, coming from management <strong>and</strong> administration,<br />
was to start from scratch <strong>and</strong> insert all information that was needed. The user should open a new<br />
form for an article, insert a product name, make a list of specification <strong>and</strong> note all operations et cetera.<br />
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Informants were aware of the norm; however, they said this led to an unnecessary waste of time. The<br />
more practical approach, according to users, was to pick an already existing article that resembled the<br />
new article as much as possible, to make a copy of this article, <strong>and</strong> thereafter make the necessary<br />
changes, for example in product name, the amount of material that ought to be needed or the type of<br />
machine that should be used. Since the individual user are not aware of the many pieces of<br />
information that lies hidden to him or her, but that other users need for their tasks, the user does not<br />
make all the changes to the copy that would have been needed. Therefore, the habit of copying<br />
existing articles instead of starting from scratch creates several mistakes, <strong>and</strong> the need of making<br />
corrections, further on in the flow. As a total, the assumed time saving habit actually is a time<br />
dem<strong>and</strong>ing <strong>and</strong> costly habit to the firm.<br />
In order to use the ERP system for retention purposes, it is necessary that users are informed <strong>and</strong><br />
educated on what information is needed <strong>and</strong> how this information is needed in different situations or<br />
for different tasks in the firm. Since a user tends to balance time to needs, or his or her effort to time,<br />
it is necessary that the user has the required underst<strong>and</strong>ing of the entire work flow. It is likewise<br />
important that he or she has the ability to judge <strong>and</strong> estimate the consequences of a choice.<br />
4.3 When <strong>and</strong> who shall...?<br />
At the sale, the vendor had demonstrated some smart solutions or automatic functions that would be<br />
useful, especially in production planning <strong>and</strong> costing. One example is how the ERP system<br />
automatically runs through all orders <strong>and</strong> schedules them according to delivery date, with<br />
consideration taken to time of delivery of input goods, bought components or in-house made<br />
components, as well as the supply of man-hours <strong>and</strong> machine hours. The scheduled orders can be<br />
re-run at any point in time, in order to always have an optimum plan of how to prioritize the stock of<br />
orders. The ERP system can likewise show to what extent every machine or work group (a team of<br />
men, or a combination of machine <strong>and</strong> men) is utilized, <strong>and</strong> avoid queues. This was considered a<br />
great potential for the firm. In practice, however, these automatic functions were rarely, or not at all,<br />
used in ABG. The reasons were several: members of the organization had forgotten that the function<br />
existed, or did not know where to find it <strong>and</strong>/or how to use it (compare above). Some informants<br />
pointed out the fact that basic data concerning all articles that the firm could offer had to be complete<br />
<strong>and</strong> correct in order for the ERP system to make just <strong>and</strong> realistic calculations. If for example<br />
requirements concerning use of time were wrongly estimated, the prioritization of orders would not be<br />
true to dem<strong>and</strong>s, <strong>and</strong> the automatic list might be greatly misleading; ca<strong>using</strong> the firm to miss crucial<br />
delivery dates instead of guarding <strong>and</strong> keeping them.<br />
The fact that several pieces of information in the data base were incomplete <strong>and</strong>/or incorrect was<br />
generally known in the firm. During the implementation process, some efforts had been made to<br />
correct some of the missing pieces: a couple of production managers that kept some personal records<br />
(i.e. individual memories in their minds) of wrongly described plans of manufacture (for example<br />
amount <strong>and</strong> type of input resources, order or operations or prescribed usage of machinery) tried to<br />
make the necessary changes during the weekend before kickoff. This was done as far as these users<br />
could remember some of the things what were wrong, <strong>and</strong> were mainly done for the orders that were<br />
currently running, at that point in time. Apart from this effort, no extra time or people were assigned to<br />
the task. <strong>Management</strong> considered it to be a continuous <strong>and</strong> shared responsibility among all staff <strong>and</strong><br />
all users of the ERP system: they should all make the necessary changes of <strong>and</strong> correction to<br />
incorrect data, as well as filling the gaps where data was missing altogether.<br />
The model of organizational memory explains the long-term storage of information as a need of<br />
maintenance. Stein <strong>and</strong> Zwass (1995) describe this as firstly, <strong>and</strong> simply, that information is stored<br />
over time, but secondly, <strong>and</strong> more complex, the way the system respond to new knowledge,<br />
integrates this with old knowledge, <strong>and</strong> also how the system selectively forgets knowledge. The<br />
simple aspect of keeping information over time is a possibility well met by an ERP system, since the<br />
data base has the technical possibility of keeping information everlasting. This is at the same time a<br />
problem: incorrect <strong>and</strong> misleading information is also possible to keep forever. As a consequence, the<br />
firm meets the risk of making the same mistakes over <strong>and</strong> over again. The ERP system does rarely<br />
respond automatically to new knowledge. Even if a user in production report actual time that differ to<br />
budgeted time for a certain article, the ERP system does not respond to the difference. The ERP<br />
system does not contain a method for integrating new information with old: in order for incorrect data<br />
to be changed into a correct figure, a user has to enter the new information. The old data will by this<br />
action be erased. The ERP system will hereby help the user to forget the old practice or old value<br />
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used, which in turn makes learning possible. In order for this to come about, however, the user has to<br />
enter the current, valid data into the data base.<br />
5. Conclusions <strong>and</strong> discussion<br />
The present article shows that the notion of an ERP system as part of the organizational memory<br />
proved to be helpful to explain how an ERP system is involved in the process of creating, <strong>using</strong>, <strong>and</strong><br />
maintaining a purposeful data base in an organization. Possibilities are easily pointed out, such as the<br />
effect of increased access to information. The obstacles to usage are however in more need of<br />
explanation.<br />
The present analysis showed how the technical design may cause an insurmountable obstacle to<br />
performing the necessary search <strong>and</strong> retrieval of needed information. On the other h<strong>and</strong>, several<br />
problems related to questions of where a certain data routine would be found <strong>and</strong> how it should be<br />
worked, which was linked to acquisition <strong>and</strong> retention, were found to be passing problems. Some<br />
early problems disappear as users get acquainted to the structure of an ERP system. An important<br />
issue, however, is the aspect of maintenance of information. An ERP system has the technical<br />
possibility to store information for a very long time. Unfortunately, the system does not discriminate<br />
between high <strong>and</strong> low quality data, but will also store incorrect data forever.<br />
The implication of missing or incorrect data may lead to the inability to use an ERP system’s<br />
automatic routines, such as scheduling of orders, or planning of utilization of resources such as<br />
machinery <strong>and</strong> man-time; functionality that carry great promises to the firm. Furthermore, missing or<br />
incorrect data may cause discussion, conflicts <strong>and</strong> frustration among users. For example, erroneous<br />
data concerning budgeted time for operations in production will mislead employee performance<br />
evaluations, <strong>and</strong> may falsely show people to be underachieving. Costing <strong>and</strong> pricing will be difficult to<br />
perform, <strong>and</strong> profitability estimations of products <strong>and</strong> orders will be ambiguous, <strong>and</strong> difficult to<br />
interpret. Learning is obstructed, since it is unclear what operations <strong>and</strong> tasks are well carried out or<br />
not. It will not be obvious what activity should be routinized <strong>and</strong> what activity would need to be<br />
changed.<br />
After the implementation, users in the case company experienced many changes: the interface was<br />
new, as were the functionality <strong>and</strong> the h<strong>and</strong>ling of data; even were quite a few of the descriptions of<br />
work processes <strong>and</strong> work tasks experienced as new to the users. Confusion was great, <strong>and</strong> everyone<br />
tried to orientate oneself. Not yet two months after the kickoff, the CFO said, with a mixture of<br />
desperation, laughter <strong>and</strong> resignation: “it’s difficult to know for sure if things are better than before, but<br />
at least they are different!” (December 2004). After reading the story of ABG <strong>and</strong> the following<br />
analysis, it is not unreasonable to react by surprise. It is almost incredulous that this situation is<br />
allowed to continue in a firm. This example disrupts our image of the effective, modern organization.<br />
However, we should remember that practise is a mish-mash of interrelated influences (Scapens,<br />
2006), that all decisions in a firm are carried out in situations of incomplete information (Simon, 1979),<br />
<strong>and</strong> that earlier experiences made by actors are important for us to underst<strong>and</strong> what is going on there<br />
today.<br />
Since people in the case had been used to incomplete <strong>and</strong> incorrect data, they were used to making<br />
decisions without putting too much trust in information they could retrieve from the information<br />
system. Experience <strong>and</strong> intuition had a strong hold upon decision makers, since such abilities were of<br />
great value in making wise decisions. The imperfections of decision making, the lack of respect<br />
among organizational members towards IT usage, <strong>and</strong> the limited possibilities of getting sufficient<br />
support from the information system were in this case considered to be a poor tradition that<br />
management wanted to change. The case however illustrates how management need to underst<strong>and</strong><br />
that the ERP system per se does not create <strong>and</strong> maintain an efficient information usage. Managers<br />
<strong>and</strong> users need to consciously plan the usage of the ERP system as part of the organizational<br />
memory in order to utilize the potential benefits of the system.<br />
References<br />
An<strong>and</strong>, V., Manz, C.C. <strong>and</strong> Glick, W.H., (1998) “An Organizational Memory Approach to <strong>Information</strong><br />
<strong>Management</strong>”, The Academy of <strong>Management</strong> Review, Vol 23, No. 4, pp 796-809.<br />
Chapman, C.S., (2005) “Not because they are new: Developing the contribution of enterprise resource planning<br />
systems to management control research”, Accounting, Organizations <strong>and</strong> Society, Vol 30, No. 7-8, pp 685-<br />
689.<br />
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Levitt, B. <strong>and</strong> March, J.G., (1988) “Organizational Learning”, Annual review of sociology, Vol 14, No. 1, pp 319-<br />
338.<br />
Orlikowski, W.J., (2000) “Using Technology <strong>and</strong> Constituting Structures: A Practice Lens for Studying Technology<br />
in Organizations”, Organization Science, Vol 11, pp 404-428.<br />
Robey, D., Boudreau, M.-C. <strong>and</strong> Rose, G.M., (2000) “<strong>Information</strong> technology <strong>and</strong> organizational learning: a<br />
review <strong>and</strong> assessment of research”, Accounting, <strong>Management</strong> <strong>and</strong> <strong>Information</strong> Technologies, Vol 10, No.<br />
2, pp 125-155.<br />
Scapens, R.W., (2006) “Underst<strong>and</strong>ing management accounting practices: A personal journey”, The British<br />
Accounting Review, Vol 38, No. 1, pp 1-30.<br />
Simon, H.A., (1979) “Rational Decision Making in Business Organizations”, The American Economic Review, Vol<br />
69, No. 4, pp 493-513.<br />
Stein, E.W. <strong>and</strong> Zwass, V., (1995) “Actualizing Organizational Memory with <strong>Information</strong> Systems”, <strong>Information</strong><br />
Systems Research, Vol 6, pp 85-117.<br />
Walsh, J.P. <strong>and</strong> Ungson, G.R., (1991) “Organizational Memory”, Academy of <strong>Management</strong> Review, Vol 16, No.<br />
1, pp 57-91.<br />
Vannoy, S.A. <strong>and</strong> Salam, A.F., (2010) “Managerial Interpretations of the Role of <strong>Information</strong> Systems in<br />
Competitive Actions <strong>and</strong> Firm Performance: A Grounded Theory Investigation”, <strong>Information</strong> Systems<br />
Research, Vol 21, No. 3, pp 496-515.<br />
Zuboff, S., (1988). In the age of the smart machine: the future of work <strong>and</strong> power, Heinemann Professional,<br />
Oxford.<br />
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Environmental Scanning Practice of Enterprise 50: Small<br />
Medium Enterprise (E50 SMEs) in Malaysia<br />
Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
International Islamic University Malaysia<br />
drroslina@gmail.com<br />
srohimi@iium.edu.my<br />
Abstract: This study investigates the effects of organizational <strong>and</strong> owner/ manager profile on environmental<br />
scanning practice of Enterprise 50 Small Medium Enterprise (E50 SMEs) in Malaysia. It investigates the extent of<br />
environmental scanning practice <strong>and</strong> the factors related to information sources that E50 SMEs utilized for<br />
environmental scanning. Based on the constructs of the measures, a research scale was developed for the study<br />
<strong>and</strong> data were collected via self-administered mail survey among the E50 SMEs in Malaysia. The results showed<br />
positive effects of organizational <strong>and</strong> owner/ manager profile on environmental scanning practice of E50 SMEs.<br />
There are also findings on the extent environmental scanning on the business environment sectors of E50 SMEs<br />
with respect to utilization of information sources. Implications of our findings for SMEs owner/ managers <strong>and</strong><br />
practitioners, the study’s limitations <strong>and</strong> future research directions are subsequently addressed.<br />
Keywords: environmental scanning, information sources, small medium enterprise, SMEs, Enterprise 50, E50<br />
SMEs<br />
1. Introduction<br />
Environmental scanning is the activity by which a company’s decision makers acquire “information<br />
about events <strong>and</strong> relationships in the outside environment, the knowledge of which would assist the<br />
management in its task of charting the company future course of action” (Aguilar 1967; Choo & Auster<br />
1992). The term “environmental scanning” (ES) refers to the means by which managers study <strong>and</strong><br />
monitor relevant business environments (Temtine 2006). Due to the presently complex business<br />
environment characterized by globalization <strong>and</strong> internationalization of markets, according to Simard &<br />
Rice (2006), there is a need for greater efficiency, effectiveness <strong>and</strong> competitiveness is based on<br />
innovation <strong>and</strong> knowledge especially to small medium enterprises (SMEs), as an important segment<br />
of domestic industries, which represent a key source of endogenous growth as well as an impetus for<br />
broad based economic development must continuously seek to find new sources of growth through<br />
strengthening its capabilities <strong>and</strong> competitiveness. This characterization has put increasing pressure<br />
upon the management of these firms especially the SMEs that must now compete globally (Temtine<br />
2006) <strong>and</strong> that in order to lower their operating costs, increase productivity <strong>and</strong> quality <strong>and</strong> respond to<br />
the increasing requirements of their customers <strong>and</strong> other business partners, a number of these firms<br />
scan the environment <strong>and</strong> make sizable investments to improve performance (Burns 2001).<br />
2. Background<br />
Environmental scanning linked to information seeking behavior of organizations through its human<br />
assets enables it to underst<strong>and</strong> changes in its external environment so that it is able to: avoid<br />
surprises, identify threats <strong>and</strong> opportunities, gain competitive advantage, <strong>and</strong> improve long-term <strong>and</strong><br />
short-term planning (Simard <strong>and</strong> Rice 2006). For managers in any given industry, conditions <strong>and</strong><br />
trends in the industry determine in large measure what areas of external information will be relatively<br />
most important (Aguilar 1967). This study is concern with the environmental scanning practice of<br />
owners/ managers with regard to utilization of information sources to acquire external information. It<br />
will be examined as the extent of environmental scanning on business environmental sectors, the<br />
type <strong>and</strong> category of information sources that owner/ manager used <strong>and</strong> regard as important that<br />
triggers scanning practice in utilization of information sources. Kourtely (2005) assert that for a firm to<br />
possess a competitive advantage, it must constantly monitor several information sources<br />
simultaneously. They note that this information sources should provide intelligence on the business<br />
environment.<br />
The expected outcome of this study would be to identify a list of high impact information sources<br />
category <strong>and</strong> type that constitutes the successful utilization of information to environmental scanning<br />
practice specific to Enterprise 50 (E50) SMEs in Malaysia <strong>and</strong> also could identify the business<br />
environment sectors that would trigger environmental scanning practice by utilizing information<br />
sources. The relationship between organizational <strong>and</strong> owner/ manager profile <strong>and</strong> environmental<br />
scanning practice of E50 SMEs will also be revealed. This study would also sight the extent of<br />
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environmental scanning practice of Enterprise 50 SMEs that can be used as a benchmark to those<br />
SMEs not in the Enterprise 50 category.<br />
2.1 Environmental scanning practice<br />
The primary purpose of environmental scanning is to provide a comprehensive view or underst<strong>and</strong>ing<br />
of the current <strong>and</strong> future condition of the five environmental constituents or dimensions: social,<br />
economic, political, regulatory, <strong>and</strong> technological (Temtine 2006). An owner/manager scans the<br />
environment to detect external changes or events which may affect the firm (Choo 2002). Given its<br />
challenging nature, owners/managers need to underst<strong>and</strong> the concept of environmental scanning <strong>and</strong><br />
define specific goals for utilization of sources in business environment scanning. Many researchers<br />
have expressed the need to know more about how managers scan the environment within their work<br />
setting (Correia <strong>and</strong> Wilson, 2001; Nastanski 2004). There is sufficient evidence to indicate that<br />
organizations that engage in more environmental scanning perform more successfully than those that<br />
do not (Choo 2001; Beal 2000) <strong>and</strong> there is evidence that the personal success of managers is<br />
enhanced as a result of their environmental scanning efforts (Kourtely 2005). Many literatures stated<br />
that scanning information was accessed through the attitude of top managers, as the decision maker<br />
of the company, towards environmental scanning <strong>and</strong> through the communication pattern established<br />
among managers within each organization (Correia <strong>and</strong> Wilson, 2001). The measurement of<br />
environmental scanning activities has often been done through a measurement of the frequency of<br />
the scanning activities. However, increasing levels of competition, technology <strong>and</strong> rapid change have<br />
created turbulence environment that makes it increasingly difficult to keep track, interpret <strong>and</strong> respond<br />
to rapid change that obstruct organization from adapting to changes in its environment <strong>and</strong> thus<br />
impact the ability of the organization in utilization of information sources in order to meet its objectives<br />
(Kourtely 2005).<br />
2.2 Owner/ manager profile<br />
Kourtely (2000) in his paper stated that top management is used as respondents in the environmental<br />
scanning study due to the top management as having a wide breadth of knowledge of all the<br />
organizations’ functions, activities <strong>and</strong> operating environment. A number of demographic variables<br />
can affect perceptions on environmental scanning activities. Those are information on the age (Choo<br />
1994 <strong>and</strong> EBharimi 2000), years of formal education, functional background (Aguilar 1967; Choo<br />
1994 <strong>and</strong> Jorosi 2006); <strong>and</strong> their management position (Aguilar 1967 <strong>and</strong> EBharimi 2000). Therefore<br />
we hypothesized that:<br />
H1 Owner/ manager profile is associated with Environmental Scanning Practice<br />
2.3 Organizational profile<br />
The main criteria that predominate to define the small medium enterprises (SMEs) sector are the<br />
number of employees, turnover <strong>and</strong> the balance sheet total (Burns, 2001) year founding (Daft et al.<br />
1988; Kourtely 2000; Kourtely 2005). Employee size is the most useful discriminator in the context of<br />
management research (Beal 2000; Burns 2001; Jorosi 2006) <strong>and</strong> of each respondent; his or her firm's<br />
primary industry group (Daft et al. 1988; Sawyer et al. 2000; Farhad <strong>and</strong> Karami 2001). Julien’s et al.<br />
(1999) research model on technological scanning in manufacturing SMEs included the firms’<br />
characteristics <strong>and</strong> the entrepreneurs’ profile as two factors affecting a firms’ scanning behavior,<br />
considered the size of firm <strong>and</strong> management proactivities on environmental scanning practices.<br />
Therefore we hypothesized that:<br />
H2 Organization profile is associated with Environmental Scanning practice<br />
3. Research design<br />
3.1 Context of the study<br />
Malaysia E50 SMEs was selected as the context of the study as E50 SMEs are Malaysia’s<br />
enterprising homegrown companies, which are well positioned for the future (SMIDEC 2009).<br />
Manufacturing, Manufacturing-Related Services <strong>and</strong> Agro-based industries<br />
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"Small <strong>and</strong> medium enterprises in the manufacturing, manufacturing related services<br />
<strong>and</strong> agro-based industries are enterprises with full-time employees not exceeding 150 or<br />
with annual sales turnover not exceeding RM25 million"<br />
Services, Primary Agriculture <strong>and</strong> <strong>Information</strong> & Communication Technology<br />
"Small <strong>and</strong> medium enterprises in the services, primary agriculture <strong>and</strong> <strong>Information</strong> &<br />
Communication Technology (ICT) sectors are enterprises with full-time employees not<br />
exceeding 50 or with annual sales turnover not exceeding RM5 million"<br />
A total of 548,000 are active SMEs <strong>and</strong> they contributed 32 percent of the country’s gross domestic<br />
product, 56 percent to employment <strong>and</strong> 19 percent to total export. It is encouraging to note that the<br />
Malaysian SMEs have been registering double-digit growth in value-added terms in a variety of<br />
industries in recent years (Companies Commission of Malaysia, CCM 2006). Enterprise 50 is an<br />
annual award programme jointly organised by Malaysia Small <strong>and</strong> Medium Industries Development<br />
Corporation (SMIDEC), Deloitte Kassim Chan supported by sponsoring companies. The qualifying<br />
criteria of the companies to be nominated must: 1) Be homegrown <strong>and</strong> locally incorporated with at<br />
least 40 percent local equity, 2) Not listed on any stock exchange, 3) Can be either parent company<br />
or subsidiary but not both taking part together <strong>and</strong> 4) Have three years audited financial figures. The<br />
nominations were evaluated based on a mix of qualitative <strong>and</strong> quantitative criteria since both are<br />
reflective of a company’s success (“active posturing” <strong>and</strong> “operational Finesse’).<br />
Quantitative selection criteria for Enterprise 50 include: 1) Operating profit before tax, 2) Gross<br />
turnover, 3) Profit growth over the last 3 years, 4) Turnover growth over the last 3 years, 5) Return on<br />
assets, 6) Export revenue/ turnover <strong>and</strong> 7) Investment in capital/ training <strong>and</strong> research <strong>and</strong><br />
development. Qualitative selection criteria for Enterprise 50 include management outlook, market<br />
presence, major innovations <strong>and</strong> <strong>Information</strong> technology usage.<br />
3.2 Data collection, population <strong>and</strong> sample<br />
The research used a cross sectional self-administered survey method on Enterprise 50 Small Medium<br />
Enterprise (E50 SMEs) in Malaysia. Questionnaires were distributed at r<strong>and</strong>om <strong>and</strong> a total of 102<br />
usable questionnaires were collected <strong>and</strong> analyzed.<br />
3.3 Instrument<br />
There were three sections in the questionnaire. Section one require respondents to answer questions<br />
pertaining to their profile. Section two requires respondents to answer the organization profile that<br />
consists of the industry group, the number of full-time employees <strong>and</strong> the yearly turnover (Analoui <strong>and</strong><br />
Karami 2001; Burns 2001). The measured operational definition for environmental scanning practice<br />
in utilization of information sources is the frequency with which owners/managers use specific<br />
information sources to gather information about events outside the organization. The measurement of<br />
environmental scanning activities was done through a measurement of the frequency of the scanning<br />
activities adopted from Miller (1995). In section three, the respondents are required to indicate the<br />
frequency or how often do they seek <strong>and</strong>/ or receive useful information about what is happening<br />
outside the company in the following business environment sectors: customers, competitors,<br />
suppliers, socioeconomic conditions, technological issues, <strong>and</strong> regulatory changes adopted from Daft<br />
et al. (1988), Ngamkroeckjoti <strong>and</strong> Johri (2000) <strong>and</strong> Beal (2000). Useful information means that it helps<br />
them to underst<strong>and</strong> what’s happening outside the company. The five-point scales are 1 = ’never’, 2 =<br />
‘seldom’, 3 = ‘sometimes’, 4 = ‘usually’, 5 = ‘always’, to be written in the given space. There are 31<br />
information sources categories classified as human/ oral information sources, document/ written<br />
information sources <strong>and</strong> other information sources. These categories has been used successfully in<br />
previous study, they were adopted to ensure a comprehensive investigation of environmental<br />
scanning practice <strong>and</strong> to maintain methodological consistency with previous research.<br />
4. Results<br />
This study used SPSS for Windows Version 16 to analyze the data. Majorities (85.3 %) of the<br />
respondents were male <strong>and</strong> 73.5% of the respondents claimed they were from 41 to 50 years old.<br />
The majorities (68.6 %) of the respondents were Bachelor Degree holders <strong>and</strong> only 2.9% had<br />
Doctorate/ PhD qualification. In general 26.4% were without tertiary education. It was found that<br />
majorities (51.0%) of the respondents were Managing Directors, 2.0% Chief Executive Officer (CEO)<br />
of the company, only 1.0% is the President of a company <strong>and</strong> majorities (84.3%) of the respondents<br />
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Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
were not the owner of the company. It was found that the majorites (72.5%) of the companies were<br />
manufacturing related services with Majority (59.8%) of the companies employed from 1 to 50 full-time<br />
employees <strong>and</strong> that majority (55.9%) of the company had yearly turnover of between RM 20,000,001<br />
to RM 25 Million. None of the respondents indicated that their company have more than 150 full-time<br />
employees nor they have yearly turnover of more than RM25 million which confirmed that the study<br />
respondents are only from small medium enterprises, SMEs category.<br />
4.1 Reliability <strong>and</strong> internal consistency assessment<br />
The study uses Cronbach’s Alpha to report the reliability of the constructs. The frequency method of<br />
measuring the environmental scanning practice in six business environment sectors was found to be<br />
highly reliable <strong>and</strong> suitable to measure the concepts employed in the study with Cronbach’s Alpha<br />
ranged from .647 to .997 as shown in Table 1 (Hair et al. 2006).<br />
Table 1: Cronbach’s Coefficients for the frequency scales<br />
<strong>Information</strong> Sources Cronbach’s Alpha<br />
business/ professional associations .971<br />
chance encounters .694<br />
consultants .911<br />
other outsiders .926<br />
subordinates .863<br />
peers .695<br />
board members .923<br />
scheduled meeting .818<br />
daily Newspapers .842<br />
trade publications .783<br />
books/ government publications .914<br />
technical magazines/ academic journals .692<br />
Exhibitions .933<br />
consultants schedule report .909<br />
other written materials .647<br />
personal subscriptions .894<br />
photocopied articles .997<br />
commercial information services .735<br />
training & development .722<br />
audio/ visual .793<br />
Internet .798<br />
SMIDEC Portal .734<br />
SMEInfo Portal .677<br />
Other Government Portals .871<br />
competitors Portals .768<br />
business Associate Portals .871<br />
other Private Company Portals .702<br />
Analysis from Table 2 indicates that all information sources categories formed three factors namely<br />
the three types of information sources (human/ oral information sources, document/ written<br />
information sources <strong>and</strong> other information sources) <strong>and</strong> was found to have high values of Cronbach’s<br />
Alpha indicating that all constructs are accurate.<br />
Table 2: Cronbach’s coefficients<br />
Factors Number of Items Cronbach’s<br />
Alpha<br />
Human/ oral information sources 8 .916<br />
Document/ written information sources 9 .954<br />
Other information sources 10 .903<br />
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Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
It is also observed that one document/ written information sources (industry exhibitions) is also loaded<br />
on factor 2 (human/ oral information sources). Out of 31 items, 4 items (stock exchange market,<br />
information services companies, written materials by other company <strong>and</strong> online database) does not<br />
meet the cut-off point.<br />
4.2 Environmental scanning practice of E50 SMEs<br />
Results in Table 3, table 4 <strong>and</strong> Table 5 below indicated that majority, 60.4% of the E50 SMEs do<br />
environmental scanning frequently to seek <strong>and</strong>/ or receive useful information about what is happening<br />
outside the company in the six business environmental sectors via human/ oral information, 53.7%<br />
via document/written information sources, <strong>and</strong> that majority (66.7%) of the E50 SMEs owners/<br />
managers do environmental scanning frequently to seek <strong>and</strong>/ or receive useful information about what<br />
is happening outside the company in the six business environmental sectors via other information<br />
sources.<br />
Table 3: Mean frequency human/ oral information sources per business environment sector<br />
Customers<br />
information<br />
business/ professional associations 4.57 4.40* 4.53 4.51 4.57 4.58<br />
Chance encounters 4.32* 4.03* 3.69* 4.19* 4.49* 4.12*<br />
consultants 4.55 4.32* 4.49* 3.75* 4.57 4.53<br />
Other outsiders 4.57 4.40* 4.53 4.43* 4.53 4.41*<br />
subordinates 4.57 4.24* 4.39* 3.75* 4.39* 4.35*<br />
peers 4.66 3.81* 4.37* 4.56 4.40* 4.40*<br />
Board members 4.57 4.36* 4.29* 4.53 4.53 4.53<br />
Industrial Exhibition 4.51 4.28* 4.38* 4.28* 4.38* 4.29*<br />
* mean frequency = 4 (round-off to the nearest integer)<br />
Table 4: Mean frequency document/ written information sources per business environment sector<br />
scanned<br />
1 = never<br />
2 = seldom<br />
3 = sometimes<br />
4 = usually<br />
5 = always Customers<br />
information<br />
scheduled meetings 3.62* 3.73* 2.92 3.42 3.22 3.17<br />
daily Newspapers 3.75* 3.78* 3.96* 3.77* 3.73* 2.92<br />
trade publications 4.09* 3.42 3.05 3.31 3.06 3.91*<br />
books/ government Publications 3.39 3.40 3.16 3.18 2.79 3.58*<br />
technical magazines/ academic journals 3.50* 3.01 3.42 3.42 3.91* 3.51*<br />
consultants Schedule reports 3.56* 3.84* 3.63* 3.64* 3.64* 3.79*<br />
other written materials 3.29 3.61* 3.00 3.02 3.00 2.78<br />
personal subscriptions 4.00* 3.51* 3.52* 3.24 3.23 2.82<br />
photocopied articles 3.80* 3.84* 3.81* 3.81* 3.81* 3.79*<br />
* mean frequency = 4 (round-off to the nearest integer)<br />
Results from Table 6, Table 7 <strong>and</strong> Table 8 below showed that owner/ manager E50 SMEs preferred<br />
to obtain information mostly pertaining to customer information from their conversation with peers,<br />
business/ professional associations, board members, subordinates <strong>and</strong> other outsiders. In general<br />
E50 SMEs highly rely on fellow workers, people around their business circle <strong>and</strong> to use human/ oral<br />
information sources (conversation with peers in the company, including formal <strong>and</strong> informal meeting)<br />
most frequently to scan the business environment while the most frequent business information sector<br />
scanned is customer information. It was also found that in general, E50 SMEs used document/ written<br />
information sources (correspondence, daily newspapers, books/ government publications, daily<br />
377<br />
Competitors<br />
<strong>Information</strong><br />
Competitors<br />
information<br />
Suppliers<br />
information<br />
Suppliers<br />
information<br />
Socioeconomic<br />
Conditions<br />
Socioeconomic<br />
Conditions<br />
Technological<br />
Issues<br />
Technological<br />
Issues<br />
Regulatory<br />
Changes<br />
Regulatory<br />
Changes
Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
newspapers <strong>and</strong> technical magazines/ journals) least frequently <strong>and</strong> the least frequently business<br />
environment scanned are on regulatory changes. The most frequently scanned business<br />
environment sector is customer information.<br />
Table 5: Mean frequency other information sources per business environment type<br />
Customers<br />
information<br />
commercial information services 3.83* 3.88* 3.62* 3.54* 3.58* 3.51*<br />
training & development 3.74* 3.88* 3.62* 3.49 3.30 3.64*<br />
audio/ visuals 3.62* 3.70* 3.41 3.46 3.44 3.66*<br />
Internet 3.53* 3.65* 3.32 3.30 3.25 3.75*<br />
SMIDEC Portal 3.46 3.71* 3.39 3.53* 3.48 3.81*<br />
SMEInfo Portal 3.93* 3.98* 4.14* 3.68* 3.71* 3.75*<br />
Other Government Portals 3.84* 3.89* 3.59* 3.65* 3.44 3.66*<br />
Competitors Portals 3.74* 3.78* 3.36 3.42 3.42 3.91*<br />
Business Associate Portals 3.84* 3.89* 3.59* 3.65* 3.44 3.66*<br />
Other Private Company Portals 3.74* 3.34 3.01 2.88 3.25 3.53*<br />
*mean frequency = 4 (round-off to the nearest integer)<br />
Table 6: Means of 10 most frequently used information sources per business environment<br />
Business environment<br />
<strong>Information</strong> Sources Categories<br />
Sector Scanned Mean<br />
1 Peers Customer information 4.66<br />
2 business/ professional associations Regulatory Changes 4.58<br />
3 board members Customer information 4.57<br />
4 Subordinates Customer information 4.57<br />
5 other outsiders Customer information 4.57<br />
6 Consultants Technological Issues 4.57<br />
7 business/ professional associations Technological Issues 4.57<br />
8 business/ professional associations Customer information 4.57<br />
9 Consultants Regulatory Changes 4.55<br />
10 board members Technological Issues 4.53<br />
1 = never 2 = seldom 3 = sometimes 4 = usually 5 = always<br />
Table 7: Means of the 10 least frequently used information sources per business environment sector<br />
scanned<br />
Business environment<br />
<strong>Information</strong> Sources Categories<br />
Sector Mean<br />
1 technical magazines/ journals Supplier <strong>Information</strong> 3.01<br />
2 other Private Company Portals Supplier <strong>Information</strong> 3.01<br />
3 Correspondence Technological issues 3.00<br />
4 Correspondence Supplier <strong>Information</strong> 3.00<br />
5 daily newspapers Regulatory changes 2.92<br />
6 scheduled meeting Supplier information 2.92<br />
7 other Private Company Portals Socioeconomic conditions 2.88<br />
8 Peers Regulatory changes 2.82<br />
9 books/ government publications Regulatory changes 2.79<br />
10 Correspondence Regulatory changes 2.78<br />
1 = never 2 = seldom 3 = sometimes 4 = usually 5 = always<br />
In general E50 SMEs more frequently do environmental scanning <strong>using</strong> human/ oral information<br />
sources (mean=4.36, SD=.432), than <strong>using</strong> document/ written information sources (mean=3.60,<br />
SD=.513). Other information sources are the least used by E50 SMEs to scan business environment<br />
sectors (mean=3.46, SD=.604). In general E50 SMEs do environmental scanning frequently <strong>using</strong> all<br />
types of information sources.<br />
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Competitors<br />
information<br />
Suppliers<br />
information<br />
Socioeconomic<br />
Conditions<br />
Technological<br />
Issues<br />
Regulatory<br />
Changes
Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
Table 8: Business environment sectors scanned in order of frequency<br />
Business <strong>Information</strong> Sectors<br />
Mean<br />
Customer <strong>Information</strong> 3.9947<br />
Competitor <strong>Information</strong> 3.8771<br />
Technological Issues 3.7779<br />
Regulatory Changes 3.7691<br />
Supplier <strong>Information</strong> 3.7538<br />
Socioeconomics Condition 3.6594<br />
4.3 Analysis of the relationships<br />
1 = never<br />
2 = seldom<br />
3 = sometimes<br />
4 = usually<br />
5 = always<br />
A series of t-tests <strong>and</strong> one-way ANOVA analysis were done to explore if the environmental scanning<br />
practice in the six business environmental sectors of E50 SMEs with relate to the frequency of<br />
scanning <strong>and</strong> the type of information sources utilized differ across profiles of the owner/ manager. The<br />
generic assumptions underlying all t-test <strong>and</strong> ANOVA were done <strong>and</strong> met before the analysis. It was<br />
found that age <strong>and</strong> whether or not one is company owner do not have any effect on the environmental<br />
scanning practice in the six business environment sectors. Gender, highest formal education <strong>and</strong><br />
position in the company do differentiate the environmental scanning frequency in the six business<br />
environment sectors.<br />
Analyzing further on the extent of environmental scanning practice of E50 SMEs, female owner/<br />
manager of E50 SMEs scan slightly more frequently on customer information <strong>and</strong> technological<br />
issues than the male owner/ manager. However, only 14.7% of owner/ managers are female. Owner/<br />
manager of E50 SMEs with Diploma as their highest formal education that represents only 9.8% of<br />
the respondents do environmental scanning on business environment sectors more frequently than<br />
respondents with other formal education <strong>and</strong> President of E50 SMEs do environmental scanning<br />
more frequently than respondents holding other positions in the customer <strong>and</strong> technological sectors<br />
while the chief executive office of E50 SMEs do environmental scanning more frequently in relation to<br />
supplier, socioeconomic <strong>and</strong> regulatory sectors. However, both President <strong>and</strong> Chief Executive Officer<br />
of E50 SMEs represent the minority (3.0%) of the respondents.<br />
The influence of owner/ manager profile on ES Practice is further analyzed in relation to information<br />
sources types used to acquire external information. Through a series of t-tests <strong>and</strong> one-way ANOVA<br />
analyses, it indicates that age do not differentiate the environmental scanning practice with relate to<br />
the type of information sources utilized. Gender, highest formal education <strong>and</strong> position in the<br />
company differentiate the environmental scanning practice of the owner/ manager with relate to<br />
document/ written <strong>and</strong> other information sources utilized respectively <strong>and</strong> this represent 53.3% of the<br />
total items accounted for the difference.<br />
Female E50 SMEs scan more frequently utilizing other information sources as compared to male E50<br />
SMEs, however female E50 SMEs represents the minority. Diploma holders scan more frequently<br />
utilizing the document/ written information sources <strong>and</strong> other information sources than those with<br />
other highest formal education while Chief Executive Officer seems to scan more frequently than<br />
those holding other positions in the company. Diploma holders (9.8% of the respondents) <strong>and</strong> Chief<br />
Executive Officer (1.0% of the respondents) represent the minority of the company. As compared to<br />
none owner, owner of the company seems to scan more frequently utilizing human/oral information<br />
sources. However, owners only represent the minority (15.7%).<br />
Except for highest formal education <strong>and</strong> position in the company, there is no significant difference<br />
between ES practice <strong>and</strong> other owner/ manager profile. This indicates that gender, age <strong>and</strong> being the<br />
owner of the company or not do not have an influence on ES practice.<br />
There is no significant difference between those without tertiary education <strong>and</strong> those with tertiary<br />
education in terms of their ES practice. The independent t-test on position in the company <strong>and</strong> ES<br />
practice showed that there is no significant difference between high management <strong>and</strong> middle<br />
management in the company in relation to their ES practice.<br />
379
Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
In summary, owner/ manager profile do not differentiates ES Practice. Thus, Hypothesis H1 is not<br />
substantiated. All subsequent analysis was conducted on the combined sample of 102 respondents.<br />
4.3.1 Relationship between organization profile <strong>and</strong> environmental scanning practice<br />
Hypothesis H2: Organization profile is associated with ES Practice<br />
The influence of organization profile on the business environment sectors scanned to acquire external<br />
information was analyzed. There are three items for organization profile namely the industry group,<br />
the number of full-time employee <strong>and</strong> the company yearly turnover <strong>and</strong> the six business environment<br />
sectors that yield 18 significant levels (p- values) to analyze.<br />
The type of industry that the company is in does influence the business environment sector that the<br />
company scanned. Considering the extent of scanning, manufacturing related services that represent<br />
the majority (69.5%) of E50 SMEs do scanning more frequently than companies in other industry<br />
group for all business environments except in technological sector. The yearly turnover of the<br />
company does not differentiate the business environmental sectors scanned.<br />
The number of full-time employees in the company does differentiate the business environment sector<br />
scanned only in the socioeconomic sector <strong>and</strong> analyzing the extent of scanning, company with the<br />
total number of 101 to150 full-time employees scanned the more frequently as compared to other<br />
type of industry. However, company with 101 to 150 full-time employees is only 4.9% which<br />
represents the minority <strong>and</strong> thus cannot be considered significant.<br />
Results indicate that company industry group differentiates the type of information sources utilized for<br />
environmental scanning in the six business environment sectors. The number of company full-time<br />
employees does not significantly differentiate the type of information sources utilized except for the<br />
oral/ human information sources utilized. The company with the total number of 101 to 150 full-time<br />
employees seems to scan most frequently <strong>using</strong> the human/ oral information sources. However, this<br />
represents the minority as only 4.9% of the company with 101 to 150 full-time employees which<br />
cannot be considered significant. The company yearly turnover does not significantly differentiate the<br />
type of information sources used except for other information sources utilized. The company with<br />
yearly turnover from RM10,000,001 to RM15 Million (21.6%, the minority) seems to scan more<br />
frequently <strong>using</strong> other information sources than company with other income brackets. Thus, it cannot<br />
be considered significant because of the small number of respondents in this category included in the<br />
sample.<br />
The Chief Executive Officer of E50 SMEs (2.0% of the respondents, the minority) do environmental<br />
scanning more frequently than those holding other positions. The company with number of employees<br />
from 101-150 seems to do environmental scanning more frequently than other companies <strong>and</strong> the<br />
company with yearly income of between RM10,000,001 to RM 15 Million seems to do environmental<br />
scanning more frequently that those with other yearly income brackets.<br />
The result indicate that the number of employee <strong>and</strong> yearly income of the company do not influence<br />
ES practice which explains that, except for industry group, there is no significant difference between<br />
Organization Profile <strong>and</strong> ES practice.<br />
An independent t-test on type of industry <strong>and</strong> environmental scanning practice showed that there is a<br />
significant difference between those in the manufacturing industry <strong>and</strong> those not in the manufacturing<br />
industry in terms of their environmental scanning practice.<br />
In summary, this finding is empirical evidence that for each E50 SMEs, the extent of environmental<br />
scanning practice with respect to the company industry group is not homogeneous <strong>and</strong> is perceived<br />
differently according to the specific type of industry they belong. However, company industry group<br />
represents only 33.3% of the organization profile dimensions. Hence, organization profile do not<br />
differentiates ES Practice which resulted hypothesis H2A is not substantiated <strong>and</strong> all subsequent<br />
analysis was conducted on the combined sample of 102 respondents.<br />
380
5. Conclusion<br />
Roslina Othman <strong>and</strong> Siti Rohimi Hamedon<br />
Organizational profile is not a significant predictor of environmental scanning practice <strong>and</strong> owner/<br />
manager profile do not differentiates environmental scanning practice. This study exposed several<br />
worthy contributions <strong>and</strong> implications for academics <strong>and</strong> practitioners. Practically, this study can assist<br />
organizations which used information about events <strong>and</strong> relationships in the outside environment to<br />
assist the management in its task of charting the company future course of action in many ways. The<br />
first contribution is the establishment of an instrument that integrates owner/ manager characteristics<br />
<strong>and</strong> organizational characteristics in assessing environmental scanning practice for E50 SMEs in<br />
particular <strong>and</strong> SMEs in general. The instrument developed in this study can be used for E50 SMEs<br />
due to the uniqueness in the characteristics of E50 SMEs <strong>and</strong> SMEs as compared to the large<br />
organizations to measure the influence of owner/ manager characteristics <strong>and</strong> organizational<br />
characteristics on their environmental scanning practice.<br />
The finding of the study will help SMEs <strong>and</strong> agencies to identify factors that influence environmental<br />
scanning practice the most <strong>and</strong> to develop programmes <strong>and</strong> information sources to suit the needs of<br />
SMEs due to its unique characteristics. The finding has impact on the extent of environmental<br />
scanning practice <strong>and</strong> identifying information sources used for scanning the six business<br />
environmental sectors especially to the Government. Environmental scanning capabilities of SMEs<br />
need to be developed. Thus, the agencies concerned may desire to start considering to evaluate the<br />
information dimensions such as the accessibility, the awareness of the availability, the reliability, <strong>and</strong><br />
the timeliness of the information sources made available, considered by Enterprise 50 SMEs to have<br />
high impact that trigger their environmental scanning practices that would bring about in gearing for<br />
developing <strong>and</strong> nurturing reliable <strong>and</strong> competitive Malaysia SMEs through utilization of its various<br />
information sources under the Malaysian Government support programmes.<br />
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382
Underst<strong>and</strong>ing Financial <strong>and</strong> non-Financial <strong>Information</strong> to<br />
Assess Listed Johannesburg Stock Exchange (JSE)<br />
Companies’ Performances<br />
Elmarie Papageorgiou 1 <strong>and</strong> Herman de Bruyn 2<br />
1<br />
University of the Witwatersr<strong>and</strong>, Johannesburg, South Africa<br />
2<br />
University of Johannesburg, South Africa<br />
Elmarie.Papageorgiou@wits.ac.za<br />
hdebruyn@uj.ac.za<br />
Abstract: Today there is an urgent need for companies to adapt to the constantly changing business conditions<br />
as the business environment exposes executives to so much data that data needs to be converted into useful<br />
information. Executives of companies need to underst<strong>and</strong> what information is available since recent research has<br />
shifted to a broader, more profitable focus on the global business environment <strong>and</strong> competitive forces. The<br />
purpose of the paper is to investigate the reality of financial <strong>and</strong> non-financial information in listed Johannesburg<br />
Stock Exchange (JSE) companies. An exploration is undertaken to see what financial <strong>and</strong> non-financial<br />
information are available, how it is used (or not) to make decisions <strong>and</strong> to solve problems to assess the<br />
company’s performance <strong>and</strong> the role played by executives in that process by <strong>using</strong> Executive <strong>Information</strong><br />
Systems (EISs). A mixed method was used; quantitative <strong>and</strong> qualitative in nature. An empirical study <strong>and</strong><br />
observations derive from a questionnaire to executives of 334 listed JSE companies. Thereafter structured<br />
interviews were undertaken with executives in listed JSE companies, foc<strong>using</strong> on the underst<strong>and</strong>ing of financial<br />
<strong>and</strong> non-financial information to enhance the performance of companies. The findings of the study conclude that<br />
several factors have served to enhance the dem<strong>and</strong> <strong>and</strong> increasing awareness of EISs activities to assess the<br />
performance of listed JSE companies. The three most important elements in upgrading information on EISs by<br />
respondents are as follow: financial information: Income statement, comparative figures, Balance sheet <strong>and</strong> nonfinancial<br />
information: director’s information, logo, contact details of the company. Companies portray a positive<br />
image by upgrading all crucial information that is important for companies to have a competitive advantage. The<br />
role played by executives in the process concluded that respondents selected executives as the main decisionmaker<br />
for implementing EISs <strong>and</strong> as the responsible person to define the requirements of an EIS. Executives<br />
must work together with the developers to discuss the requirements of the EIS <strong>and</strong> to ensure that the information<br />
is made available to the system. It is noted that respondents also selected executives as the main decision<br />
makers in deciding the content of EISs, to add new features, to ensure the integrity <strong>and</strong> to assure ownership to<br />
an EIS. The findings from the interviews concluded that successful EISs provide executives with the necessary<br />
real-time information <strong>and</strong> is a trusted source of information to provide financial <strong>and</strong> non-financial information. The<br />
value of the study explains that the trend has increasingly shifted towards management empowerment to improve<br />
the reality in underst<strong>and</strong>ing financial <strong>and</strong> non-financial information of companies to assess their performances.<br />
Keywords: development of executive information systems, executives, financial information, management<br />
information, non-financial information, South Africa, use of executive information systems<br />
1. Introduction <strong>and</strong> background<br />
The changing business l<strong>and</strong>scape creates new challenges for <strong>Information</strong> Technology (IT) as top<br />
management expects technology to drive immediate results to subsequently deliver a world-class<br />
business while focussing on innovations that are the building blocks for the future (Cramm 2010:124).<br />
Wessels (2008:149) states that IT changes at a rapid pace <strong>and</strong> businesses need to adapt to<br />
incorporate theses changes to remain competitive. According to Cramm (2010:124) the next wave of<br />
innovation is in connecting companies, people, computers <strong>and</strong> systems, a system top management<br />
<strong>and</strong> other users can use to underst<strong>and</strong> financial <strong>and</strong> non-financial information. Cramm (2010:124)<br />
states that 90 percent of employees who are not employed in IT, definitively work with IT <strong>and</strong> are a<br />
key source for innovation as they are on the front-lines dealing with customers, suppliers, competitors<br />
<strong>and</strong> shareholders.<br />
2. Research objective <strong>and</strong> research questions<br />
The purpose of the paper is to investigate the reality of financial <strong>and</strong> non-financial information in listed<br />
Johannesburg Stock Exchange (JSE) companies used to assess the company’s performance <strong>and</strong> the<br />
role played by executives in that process by <strong>using</strong> Executive <strong>Information</strong> Systems (EISs). The<br />
research questions investigated were to establish what financial <strong>and</strong> non financial information are<br />
available on listed JSE company’s Web sites <strong>and</strong> EISs, how is it used to make decisions <strong>and</strong> solve<br />
problems <strong>and</strong> to determine the role of executives by <strong>using</strong> EISs to ensure a sustainable strategic<br />
competitiveness for listed JSE companies.<br />
383
3. Literature study<br />
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Today businesses are forced to become part of the IT environment to compete with local <strong>and</strong><br />
international markets as businesses need to apply for ‘new’ IT to have a competitive advantage.<br />
Nieman <strong>and</strong> Bennett (2002:36) state that with the developments in wireless applications <strong>and</strong><br />
electronic communications, new business opportunities have been created. According to Phillips<br />
(2011:37) diverse types of information are needed to make a business better. Executives of<br />
companies need to underst<strong>and</strong> what information needs to be accessible in order to make decisions<br />
<strong>and</strong> to solve problems to be competitive. According to Cheung <strong>and</strong> Babin (2006:1590) executive<br />
users become more computer literate, request more sophisticated IT support <strong>and</strong> in many cases take<br />
charge of the system development process.<br />
<strong>Information</strong> needs to be immediately available in a format that executives <strong>and</strong> other users can<br />
underst<strong>and</strong>. Spreadsheets need to be replaced with real-time systems that deliver information that is<br />
relevant, quick, real-time, accessible <strong>and</strong> easy to underst<strong>and</strong> (Phillips, 2011:37). The real-time system<br />
manages daily transactions as to the out-dated information that is even hard to remember or discover<br />
what went wrong; never mind to correct the problem (Phillips, 2011:37). Halabi, Barrett <strong>and</strong> Dyt<br />
(2008:168) states that the “collection <strong>and</strong> collation of financial information to produce accounting<br />
reports will be useful for decision-making <strong>and</strong> conveying information to external parties.” Computers<br />
systems make information timelier <strong>and</strong> available to improve decision-making (Gelinas & Dull, 2008:2).<br />
Naicker (2010:21) concluded that financial decisions are based on the information available in<br />
sourcing relevant <strong>and</strong> accurate information to ensure that the decision making process encompasses<br />
all aspects of the business.<br />
According to Van Zyl (2011:12) companies that are not strong in the field of data, technology <strong>and</strong><br />
analytics <strong>and</strong> are therefore gradually falling behind the top performers who are well advanced in the<br />
term of analytics. The term, analytics is the application of computer technology <strong>and</strong> statistics to solve<br />
problems in business <strong>and</strong> industry (Van Zyl, 2010:12). Users need systems that provide them with<br />
access to diverse types of information in order to be competitive. Businesses have chosen information<br />
technology to provide relevant <strong>and</strong> accurate information to top management <strong>and</strong> executives.<br />
According to De Vries, Mulig <strong>and</strong> Lowery (2004:644) executives are faced with many complex stets of<br />
data <strong>and</strong> the opportunity exists to use Executive <strong>Information</strong> Systems (EISs) as a tool which can be<br />
tailored to the specific needs <strong>and</strong> requirements of businesses. Martin, Dehayes, Hoffer <strong>and</strong> Perkins<br />
(2005:223) “…emphasis that competitive information has become so important in the last few years<br />
that many organisations call their EISs business intelligent systems or competitive intelligence<br />
systems.” Findings by Venter (2002:209) conclude that “South African companies are keeping abreast<br />
of international trends regarding the use of the Internet as a medium of communication with investors<br />
<strong>and</strong> shareholders.” Bullock (2011:20) stated that integrated reporting is not yet m<strong>and</strong>atory in the<br />
European Union <strong>and</strong> it will be interesting to watch how integrating reporting in South Africa develops.<br />
Voogt (2010:28) states that the role of the Chief <strong>Information</strong> Officer has changed dramatically over the<br />
past few years since the skills of the CFO in addressing IT risk strategically <strong>and</strong> underst<strong>and</strong>ing the<br />
impact of IT across all business functions will be invaluable in addressing IT governance.<br />
The driving force behind the EIS is threefold: firstly, the structure, the drive to formulate a structure<br />
that is acceptable to all users. The structure of the business consists of different user groups of<br />
information <strong>and</strong> has unique information requirements as the level of detail <strong>and</strong> nature of information<br />
differ considerably (Hall, 2008:4). According to Meyer (2011:50) wise executives know that strategic<br />
thinking, formulation <strong>and</strong> strategic implementation are not purely rational processes as people at all<br />
levels feel that they have their role to play. <strong>Management</strong> needs information that is summarised <strong>and</strong><br />
orientated towards reporting as to more detailed information that is required at lower levels of<br />
management. Secondly, the content, the drive towards pressure from competitors, potential investors<br />
<strong>and</strong> stakeholders to ensure all financial <strong>and</strong> non-financial information is easy accessible. When<br />
deciding the content of an EIS Averweg <strong>and</strong> Roldán (2006:625) stated that ‘EIS is a computer-based<br />
technology designed in response to the specific need of executives” to evaluate what is important for<br />
making both strategic <strong>and</strong> tactical decisions.” And lastly, the commitment of top management to<br />
exp<strong>and</strong> EISs to other users, as information software technology improves in a digital environment top<br />
management must utilise the ‘new’ technology available for strategic decision making <strong>and</strong> managing<br />
daily business activities in order to assess the company’s performance to remain competitive. Arnott,<br />
384
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Jirachiefpattana <strong>and</strong> O’Donnell (2007:2078) added that an EIS support the work <strong>and</strong> top management<br />
are committed to provide rapid access to critical information.<br />
4. Research methodology <strong>and</strong> data collection<br />
The research study used a mixed method, quantitative <strong>and</strong> qualitative in nature. Questionnaires <strong>and</strong><br />
interviews were used to collect data. The exploration proceeded in two stages: firstly, questionnaires<br />
were used to determine the status quo, the existence of EISs in businesses <strong>and</strong> the role of executives<br />
in <strong>using</strong> EISs; secondly, interviews with management were conducted with businesses that plan to<br />
implement an EIS. In stage one, the questionnaires were distributed via e-mail to all the 334 listed<br />
JSE companies for the attention of executives <strong>and</strong> top management. In stage two, seven respondents<br />
from the questionnaire were selected to participate in the interview process to collect in-depth<br />
information regarding their company’s EISs status <strong>and</strong> how financial <strong>and</strong> non-financial information are<br />
used to assess the company’s performance. Questions asked in the interviews varied from structured<br />
questions to open-ended questions. The questions <strong>and</strong> results are reflected in the Interview Annexure<br />
A.<br />
5. Findings of the study<br />
All the companies that participated in the study are located in South Africa <strong>and</strong> represent eight of the<br />
twelve industries listed on the JSE <strong>and</strong> are as follow: Property, Mining, Construction, Manufacturing,<br />
Retail, Financials, Telecommunications, <strong>and</strong> Leisure <strong>and</strong> Entertainment. Sixty five companies<br />
responded to the questionnaire, a response rate of 19.5%. The survey data from the questionnaires<br />
provides useful insights of listed JSE companies regarding their annual financial <strong>and</strong> non-financial<br />
elements available on the company’s Web site, existence of EISs <strong>and</strong> the person/s who make<br />
decisions, determine the requirements, add new features, ensure integrity <strong>and</strong> assure ownership of<br />
an EIS. The data confirmed that there is a growing interest in EISs since there are currently 38.5%<br />
companies who have implemented EISs <strong>and</strong> another 20% of the respondents confirmed to implement<br />
EISs in the near future, a total of 58.5%. From the findings it can be concluded that there are<br />
similarities between companies irrespective of the different industries. Questions in the electronic<br />
questionnaire <strong>and</strong> interviews refer to the research objectives of the study.<br />
5.1 Quantitative results<br />
The results of the questionnaire were presented by <strong>using</strong> basic frequency <strong>and</strong> are presented in<br />
tabular format in Table 1 to 10. Table 1 represents a rank ordered of the elements available on the<br />
company’s Web site. The percentages of respondents reporting on the availability of annual financial<br />
elements on the company’s Web site indicate that displaying current information focus heavily on the<br />
full annual report (92.3%), followed by the chairman’s report (52.3%) <strong>and</strong> then corporate information<br />
(47.7%). This indicates that it provides information to users to evaluate <strong>and</strong> to compare the<br />
company’s performances for possible investment opportunities in the future.<br />
Table 1: A rank ordered of the elements available on the company’s Web site<br />
Annual financial elements available on the company’s Web site Marked<br />
Count Percentage<br />
Full Annual Report 60 92.3%<br />
Chairman's Report 34 52.3%<br />
Corporate <strong>Information</strong> 31 47.7%<br />
Financial Summary 30 46.3%<br />
Balance Sheet 29 44.6%<br />
Income Statement 29 44.6%<br />
Cash Flow Statement 27 41.5%<br />
Notes to the accounts 26 40.0%<br />
<strong>Management</strong> Report 26 40.0%<br />
Audit Report 25 38.5%<br />
Links to non-financial information 25 38.5%<br />
Changes in Equity Statement 23 35.4%<br />
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Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Annual financial elements available on the company’s Web site Marked<br />
Count Percentage<br />
Year-end-Review 23 35.4%<br />
Other 7 10.8%<br />
The other annual financial elements (10.8%) are indicated in Table 2. In our digital era all listed JSE<br />
companies are expected to have a Web site but surprisingly, one of the respondents indicated that<br />
their company does not have a Web site. As the author was searching for the outst<strong>and</strong>ing e-mail<br />
addresses on the Internet regarding the mailing list of the questionnaires, a few listed JSE companies<br />
did not have Web sites or their Web sites were under construction. Companies also indicated that<br />
sustainability reports, share information <strong>and</strong> operation reports are valuable financial information for<br />
users.<br />
Table 2: Other annual financial elements<br />
Other annual financial elements available on the company’s Web site<br />
All presentations to investors on results.<br />
All Circulars to shareholders.<br />
Equity raising information; <strong>and</strong><br />
BEE transactions.<br />
Operations report.<br />
Our financial information also displays XBRL info <strong>and</strong> a financial analyser.<br />
Production Quarterly Reports.<br />
Products <strong>and</strong> Services Brochure;<br />
Sustainability Report;<br />
Share price information; <strong>and</strong><br />
Shareholders information.<br />
Company does not have a Web site.<br />
Share data.<br />
Subsidiary financial results;<br />
Operations review; <strong>and</strong><br />
Five year financial review.<br />
Sustainability report.<br />
Value added statement.<br />
As per Table 3 respondents from companies with an EIS could select more than one person<br />
responsible for implementing the original EIS in their company in comparison with all the respondents<br />
to the questionnaire. It is noted that executives (27.7%) are given the responsibility to implement EISs<br />
<strong>and</strong> managers were not even considered responsible to implement EISs.<br />
Table 3: Responsible person/s for implementing the original EIS in their company<br />
Responsible person/s for implementing the original EIS in your company Marked<br />
Count Percentage<br />
Executive 18 27.7%<br />
CEO 5 7.7%<br />
MIS 6 9.2%<br />
Accountant 4 6.2%<br />
Manager 0 0.0%<br />
Other:<br />
Business Intelligence Department<br />
1 1.1%<br />
Sub Total 25 38.5%<br />
Total 65 100.0%<br />
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Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Respondents from companies with an EIS could select more than one person responsible for defining<br />
the requirements of an EIS in comparison with all the respondents to the questionnaire as per Table<br />
4. Nearly twenty eight percent (27.7%) executives are given the responsibility to define the<br />
requirements followed by CEOs (21.5%). Executives must work together with the developers to<br />
discuss the requirements of an EIS <strong>and</strong> to ensure the information is made available to the system.<br />
Some executives personalised EISs <strong>and</strong> made it their own system since failures of any of these<br />
responsibilities can reduce the effectiveness of an EIS.<br />
Table 4: Person/s defining the requirements of EISs<br />
Person/s defining the requirements of EISs Marked<br />
Count Percentage<br />
Executive 18 27.7%<br />
CEO 14 21.5%<br />
MIS 8 12.3%<br />
Accountant 7 10.8%<br />
Manager 4 6.2%<br />
Other: 1 1.5%<br />
Sub Total 25 38.5%<br />
Total 65 100.0%<br />
As per Table 5 respondents could select more than one person deciding the content of EISs. It is<br />
noted that executives (64.0%) were selected as the main decision makers deciding the content of<br />
EISs followed by CEOs (36.0%).<br />
Table 5: Person/s deciding the content of EISs<br />
Person/s deciding the content of EISs<br />
Executive<br />
CEO<br />
<strong>Management</strong> Committee<br />
Accountant<br />
MIS<br />
Manager<br />
Other<br />
Count/<br />
%<br />
Main Some Minor None<br />
Count 16 7 2 0<br />
% 64.0% 28.0% 8.0% 0.0%<br />
Count 9 13 2 1<br />
% 36.0% 52.0% 8.0% 4.0%<br />
Count 7 10 6 2<br />
% 28.0% 40.0% 24.0% 8.0%<br />
Count 7 13 5 0<br />
% 28.0% 52.0% 20.0% 0.0%<br />
Count 3 13 7 2<br />
% 12.0% 52.0% 28.0% 8.0%<br />
Count 4 9 11 1<br />
% 16.0% 36% 44.0% 4.0%<br />
Count 1 1 2 5<br />
% 11.1%% 11.1% 22.2% 55.6%<br />
In Table 6 respondents from companies with an EIS could select more than one person responsible<br />
for adding new features to EISs in comparison with all the respondents to the questionnaire.<br />
Executives (29.2%) by far exceed the other persons involved. Auditors <strong>and</strong> investors were not<br />
selected as they are regarded as outside persons. Only one person was selected as other; MIS – as<br />
this person could be appointed in an advisory capacity.<br />
387
Table 6: Person/s adding new features to EISs<br />
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Person/s adding new features to EISs Marked<br />
Count Percentage<br />
Executive 19 29.2%<br />
Middle <strong>Management</strong> 12 18.5%<br />
Accountants 12 18.5%<br />
CEO 11 16.9%<br />
Auditors 0 0.0%<br />
Investors 0 0.0%<br />
Other users outside the company – MIS 1 1.5%<br />
Sub Total 25 38.5%<br />
Total 65 100.0%<br />
In Table 7 respondents from companies with an EIS could select more than one person responsible<br />
for ensuring the integrity of EISs in comparison with all the respondents to the questionnaire. The<br />
main persons involve are accountants (27.7%) followed closely by the executives (20.0%) to ensure<br />
the integrity of EISs. Only one CEO <strong>and</strong> five auditors were selected <strong>and</strong> no investors were selected<br />
for a person ensuring the integrity of EISs.<br />
Table 7: Person/s ensuring the integrity of EISs<br />
Person/s ensuring the integrity of EISs<br />
Marked<br />
Count Percentage<br />
Accountants 18 27.7%<br />
Executive 13 20.0%<br />
Middle <strong>Management</strong> 9 13.8%<br />
Auditors 5 7.7%<br />
Other users outside the company 1 1.5%<br />
CEO 1 1.1%<br />
Investors 0 0.0%<br />
Sub Total 25 38.5%<br />
Total 65 100.0%<br />
The respondents could select more than one person by stating ‘yes’ or ‘no’ to the person assuring<br />
ownership of EISs as per Table 8. Regarding the ownership of EISs, executives (84.0%) had the<br />
highest percentage followed by a group of persons nearly equally spread between CEOs (76.0%),<br />
Middle management (72.0%), IT persons (72.0%) <strong>and</strong> Accountants (68.0%).<br />
Table 8: Person/s assuring ownership of EISs<br />
Person/s assuring ownership of EISs<br />
Yes No<br />
Count % Count %<br />
Executive 21 84.0% 4 16.0%<br />
CEO 19 76.0% 6 24.0%<br />
Middle <strong>Management</strong> 18 72.0% 7 28.0%<br />
IT Persons 18 72.0% 7 28.0%<br />
Accountants 17 68.0% 8 32.0%<br />
Auditors 2 8.0% 23 92.0%<br />
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Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Person/s assuring ownership of EISs<br />
Yes No<br />
Count % Count %<br />
Non-management Staff 1 4.0% 23 96%<br />
Investors 0 0.0% 25 100.0%<br />
Other users outside the company 1 5.0% 18 95.0%<br />
Table 9 presents a rank ordered of financial information available on EISs. The respondents could<br />
select only one type of financial information available on their EISs. The six most important types of<br />
financial information that are upgraded on a regular basis are both Income statement <strong>and</strong><br />
comparative figures (88.0%), followed by both Balance sheet <strong>and</strong> Cash flow statement (84.0%) then<br />
Actual versus budget figures (82.0%), <strong>and</strong> lastly both financial ratios <strong>and</strong> financial summary (72.0%).<br />
Table 9: Financial information available on EISs<br />
Financial information available on EISs<br />
Yes, regularly<br />
upgraded<br />
Yes, but not<br />
always upgraded<br />
Count % Count % Count %<br />
Income Statement 22 88.0% 1 4.0% 2 8.0%<br />
Comparative Figures 22 88.0% 1 4.0% 2 8.0%<br />
Balance Sheet 21 84.0% 1 4.0% 3 12.0%<br />
Cash flow Statement 21 84.0% 1 4.0% 3 12.0%<br />
Actual versus Budget figures for the<br />
company<br />
20 80.0% 0 0.0% 5 20.0%<br />
Financial Ratios 18 72.0% 2 8.0% 5 20.0%<br />
Financial Summary 18 72.0% 4 16.0% 3 12.0%<br />
<strong>Management</strong> Report 17 68.0% 3 12.0% 5 20.0%<br />
Graphs on Financial Ratios / Budgets vs.<br />
actual of the company<br />
16 64.0% 2 8.0% 7 28.0%<br />
Trend Analysis 16 64.0% 1 4.0% 8 32.0%<br />
Exchange Rates information 15 60.0% 0 0.0% 10 40.0%<br />
Drill down to Chart of Account level 13 52.0% 3 12.0% 9 36.0%<br />
5-Year Review 12 48.0% 5 20.0% 8 32.0%<br />
Links to the JSE 12 48.0% 3 12.0% 10 40.0%<br />
On-time, real-time 12 48.0% 4 16.0% 9 36.0%<br />
Database Access 11 44.0% 2 8.0% 12 48.0%<br />
Report Writer for Formal Reports 10 40.0% 3 12.0% 12 48.0%<br />
Audit Report 10 40.0% 3 12.0% 12 48.0%<br />
Exception Reports 10 40.0% 3 12.0% 12 48.0%<br />
Interest Rates 9 36.0% 2 8.0% 14 56.0%<br />
Fixed Asset Register 7 28.0% 3 12.0% 15 60.0%<br />
Capability to do What-if-analysis 6 24.0% 3 12.0% 16 64.0%<br />
Investors Guide 6 24.0% 2 8.0% 17 68.0%<br />
VAT Reports 5 20.0% 1 4.0% 19 76.0%<br />
Taxation Enquiries 4 16.0% 1 4.0% 20 80.0%<br />
Other 3 12.0% 2 8.0% 20 80.0%<br />
389<br />
No
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Table 10 presents a rank ordered of non-financial information available on EISs. The three most<br />
important types of non-financial information that are upgraded on a regular basis are logo of the firm<br />
(60.0%), followed by the directors of the firm (52.0%), <strong>and</strong> then contact details of the firm (48.0%).<br />
Companies do make sure all their information regarding the general contact details, logo, director’s<br />
contact details <strong>and</strong> structure of the firm are all updated in order for suppliers, customers <strong>and</strong> investors<br />
to contact them at all times. Companies portray a positive image to all by upgrading all crucial<br />
information that is important to contact companies.<br />
Table 10: Type of non-financial information available on EISs<br />
Type of non-financial information<br />
available on EISs<br />
Yes, regularly<br />
upgraded<br />
Yes, but not always<br />
upgraded<br />
Count % Count % Count %<br />
Logo of Firm 15 60.0% 5 20.0% 5 20.0%<br />
Directors of the Firm 13 52.0% 2 8.0% 10 40.0%<br />
Contact details of Firm 12 48.0% 3 12.0% 10 40.0%<br />
Organisational Structure of Firm 10 40.0% 5 20.0% 10 40.0%<br />
Scheduling Meetings 10 40.0% 2 8.0% 13 52.0%<br />
Booking of Internal Venues 10 40.0% 2 8.0% 13 52.0%<br />
Internal Telephone list/E-mail of staff 10 40.0% 0 0.0% 15 60.0%<br />
Complement of Staff (Headcount) 9 36.0% 3 12.0% 13 52.0%<br />
Medical Aid for Staff 9 36.0% 4 16.0% 12 49.0%<br />
Leave Forms/ Leave Available 9 36.0% 3 12.0% 13 52.0%<br />
Pension Fund for Staff (Retirement <strong>and</strong><br />
Contributions)<br />
8 32.0% 3 12.0% 14 56.0%<br />
Products/Services 8 32.0% 4 16.0% 13 52.0%<br />
Calendar of events/meetings 8 32.0% 3 12.0% 14 56.0%<br />
Internet Banking 7 28.0% 3 12.0% 15 60.0%<br />
Mission Statement 7 28.0% 6 24.0% 12 48.0%<br />
Application form for personal loans 7 28.0% 3 12.0% 15 60.0%<br />
Links to News Agencies 6 24.0% 6 24.0% 13 52.0%<br />
Other Important Contacts, like Auditors,<br />
Consultants, Investors, <strong>and</strong> Contractors<br />
6 24.0% 5 20.0% 14 56.0%<br />
Computer <strong>and</strong> workstation assistance 6 24.0% 1 4.0% 18 72.0%<br />
IRP5 5 20.0% 0 0.0% 20 80.0%<br />
Shareholders of the Firm 5 20.0% 5 20.0% 15 60.0%<br />
Street Map for local deliveries 5 20.0% 1 4.0% 19 76.0%<br />
Multimedia <strong>and</strong> Hypermedia 5 20.0% 5 20.0% 15 60.0%<br />
Order form for Stationery <strong>and</strong> Printing 5 20.0% 0 0.0% 20 80.0%<br />
UIF 4 16.0% 2 8.0% 19 76.0%<br />
First Aid 4 16.0% 1 4.0% 20 80.0%<br />
Fire Drill 4 16.0% 1 4.0% 20 80.0%<br />
Salary <strong>and</strong> Wage<br />
Negotiations/Agreements<br />
3 12.0% 2 8.0% 20 80.0%<br />
Labour Laws 3 12.0% 3 12.0% 19 76.0%<br />
Fixed Assets per office, room or section 2 8.0% 3 12.0% 20 80.0%<br />
Travel Agencies/Accommodation 2 8.0% 3 12.0% 20 80.0%<br />
Canteen facility 2 8.0% 1 4.0% 22 88.0%<br />
390<br />
No
Type of non-financial information<br />
available on EISs<br />
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
Yes, regularly<br />
upgraded<br />
Yes, but not always<br />
upgraded<br />
Count % Count % Count %<br />
Parking bay allocation 1 4.0% 1 4.0% 23 92.0%<br />
Unions 1 4.0% 1 4.0% 23 92.0%<br />
Car Hiring information 0 0.0% 1 4.0% 24 96.0%<br />
Wine <strong>and</strong> Dine 0 0.0% 3 12.0% 22 88.0%<br />
5.2 Qualitative results<br />
Other 4 29.0% 1 7.0% 9 64.0%<br />
Face-to-face interviews are armed with a list of structured questions to the interviewees. Apart from<br />
the interviewing, other data was gathered by observation, document studies <strong>and</strong> annual reports. All<br />
the respondents to the questionnaires were categorised into two groups. The interview questions <strong>and</strong><br />
the results of the interviews are presented in two tables as Group A <strong>and</strong> B in Interview Annexure A.<br />
The stratification of the different interview groups <strong>and</strong> the number of companies interviewed were as<br />
follows:<br />
Group A: Companies with EISs – Interviews with management of five companies<br />
Group B: Companies who plan to implement EISs – Interviews with management of two<br />
companies<br />
Seven executives <strong>and</strong> upper level management across all the listed JSE companies were<br />
interviewed. The names of the companies were not disclosed for confidentiality purposes.<br />
5.2.1 Group A – Results of companies with EISs<br />
One executive of five listed JSE companies with an EIS were r<strong>and</strong>omly selected from the respondents<br />
to the questionnaire to determine how EISs are used in their companies. A successful EIS provides<br />
the executive with the necessary real-time information that is needed in decision making <strong>and</strong> solving<br />
problems under time pressure. The EIS is a trusted source of information for companies in Group A.<br />
All the companies had different software options for their EIS. All the companies have used EISs for<br />
five years plus. The number of users accessing EISs varied from twenty six to over five hundred users<br />
with the majority of users being in the range of twenty six to fifty users. All interviewees confirmed that<br />
the accountant was the main user of an EIS in their business followed by the executive. All the<br />
interviewees indicated the following motivation factors for having an EIS; improve the effectiveness<br />
<strong>and</strong> efficiency of executives, provide easier, faster access to information <strong>and</strong> interface with other<br />
software packages. Interviewees selected quality of information, availability of information regularly,<br />
response time, increase productivity <strong>and</strong> user-friendliness as crucial factors to add strategic value for<br />
<strong>using</strong> an EIS. All interviewees confirmed that an EIS assists in decision-making. According to the<br />
interviewees the following exciting IT developments are planned for the future of their company;<br />
integration to group level, as EIS is paper based <strong>and</strong> only available to group level after 15 working<br />
days, adapt to new information technology, knowledge management portal, <strong>and</strong> Improved HR MIS<br />
systems, replace general ledger, improve processes, automate functions, updating <strong>and</strong> adapting to<br />
the latest technology.<br />
5.2.2 Group B – Results of companies that plan to implement an EIS<br />
One executive of two listed JSE companies that plan to implement an EIS were r<strong>and</strong>omly selected<br />
from the respondents to the questionnaire to be interviewed to determine how EISs can used in their<br />
companies in the future. Both executives stated that an EIS: would improve the immediate availability<br />
of information; could be used to drill down to transaction level; is user-friendly; decreases the working<br />
days substantially to produce consolidated Group results <strong>and</strong> increases the strategic value for<br />
decision making <strong>and</strong> immediate problem solving. The EIS is supported <strong>and</strong> empowered by the CEO<br />
<strong>and</strong> FD. Both the interviewees seek quicker, better <strong>and</strong> more efficient ways to do their day-to-day<br />
activities <strong>and</strong> have timeous reports. In both companies the main <strong>and</strong> planned users of the EIS are<br />
executives, CEOs <strong>and</strong> accountants. Currently both companies’ management reports are paperbased.<br />
The introduction of an EIS it would enhance the communication capabilities <strong>and</strong> improve the<br />
existing database of the company.<br />
391<br />
No
6. Conclusion<br />
Elmarie Papageorgiou <strong>and</strong> Herman de Bruyn<br />
The trend towards decision-making <strong>and</strong> problem-solving at all levels of business creates a need for a<br />
specialised information system. EISs address the needs of businesses in underst<strong>and</strong>ing financial <strong>and</strong><br />
non-financial information in order to assess companies’ performances. The type of information<br />
required by executives <strong>and</strong> top management is directly related to the level of management <strong>and</strong> the<br />
degree of structure in the type of decisions they deal with daily. The higher the level of management<br />
in the business, the more unstructured the decisions become. The financial <strong>and</strong> non-financial<br />
information, that is available on listed JSE company’s Web sites <strong>and</strong> EISs are used by top<br />
management <strong>and</strong> executives, <strong>and</strong> is usually summarised for decision-making <strong>and</strong> problem-solving to<br />
create a competitive advantage. Detailed information is available for a more in-depth analysis if<br />
required. Top management needs to be committed in <strong>using</strong> EISs <strong>and</strong> the constant drive to update<br />
information to be competitive. Underst<strong>and</strong>ing financial <strong>and</strong> non-financial information was explored in<br />
detail in interviews conducted to determine: what information was collected, how it was used, <strong>and</strong><br />
what role was played by executives in the process of <strong>using</strong> EISs. The outcomes of the interviews<br />
have limited value but definitely add value to the study as interviewees shared their experiences<br />
regarding their EISs to demonstrate the strategic value of EISs <strong>and</strong> to persuade top management to<br />
support EISs. Both financial <strong>and</strong> non-financial information was collected by <strong>using</strong> EISs to access<br />
quality, reliable <strong>and</strong> real-time information. Executives <strong>and</strong> accountants were the main users of EISs<br />
<strong>and</strong> the main motivation factors for <strong>using</strong> EISs were: to improve the effectiveness <strong>and</strong> efficiency of<br />
executives, to provide easier, faster access to information, <strong>and</strong> to interface with other software<br />
packages. The findings from the interviews concluded that successful EISs not only provided<br />
executives with necessary real-time information but that they were also trusted sources of information.<br />
In conclusion, it all begins with an IT paradigm shift to influence top management to create a culture<br />
of continuous awareness to improve <strong>and</strong> recognise IT issues when introducing a business<br />
management information tool, for listed JSE companies. IT is only useful to businesses if it is<br />
managed as an integrated business function, otherwise it risks wasting valuable information for<br />
decision-making <strong>and</strong> problem-solving. The decision to integrate <strong>and</strong> re-structure IT in a business is a<br />
key feature to inform management of the consequences of their business’s operations <strong>and</strong> the<br />
impacts of past decision making processes. IT should without doubt be the core vision for businesses<br />
<strong>and</strong> should be used as a strategic tool to focus on accessing information that is relevant, accurate <strong>and</strong><br />
timeous. EISs can be used to assist businesses to exp<strong>and</strong> <strong>and</strong> develop their businesses in<br />
underst<strong>and</strong>ing financial <strong>and</strong> non-financial information.<br />
A limitation of the study was the low response rate; this was due to the following reasons: some<br />
executives were out of office for long periods of time, addresses obtained from McGregor BFA did not<br />
include all the e-mail addresses of the companies, some non-respondents had no Web sites, some<br />
listed JSE companies obtained from McGregor BFA were de-listed or suspended by the time the<br />
questionnaires were e-mailed, some companies failed to participate in the survey or were unable to<br />
complete the survey due to time constrictions, some companies were not in a position to disclose the<br />
name or e-mail addresses of top management, some company policies forbad any participation in<br />
completing questionnaires <strong>and</strong> some addressed executives had already left the company at the time<br />
of the survey. Extending the questionnaire to a larger group of interviewees would be desirable in<br />
order to enhance the outcome of the findings.<br />
Future research could be to examine businesses in similar industries that might highlight specific<br />
concerns of different companies in the same industry. Further research could also assist businesses<br />
that do not have an EIS, establish how businesses access <strong>and</strong> use their financial <strong>and</strong> non-financial<br />
information to assess their companies’ performances. This would be of great values as financial <strong>and</strong><br />
non-financial information is critical for companies to strengthen their competitiveness in a very<br />
competitive digital environment.<br />
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education of professional accountants, SA Journal of Accounting Research, 22(1), 147-172.<br />
393
Designing a Model for Evaluating the <strong>Information</strong><br />
Technology Level in Organizations <strong>using</strong> Fuzzy TOPSIS<br />
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
Science <strong>and</strong> Research Branch, Islamic Azad University, Tehran, Iran<br />
Sh.pas<strong>and</strong>ide@gmail.com<br />
toloie@gmail.com<br />
radfar@gmail.com<br />
Abstract: Implementation of information technology has a grown aspect in the modern management issues <strong>and</strong><br />
one of the important things is to evaluate the level of information technology in organization. this paper aims to<br />
present a model for evaluating the information technology (IT) level in organization by <strong>using</strong> Fuzzy TOPSIS. The<br />
criteria of information technology have been organized into four main categories <strong>and</strong> in each of them; the main<br />
<strong>and</strong> sub- criteria related to each parameter are defined. As the qualitative <strong>and</strong> quantitative criteria, due to the<br />
vague nature of IT, are not definitive, a linguistic term is employed to assess the importance of each criterion. In<br />
order to determine the weight of each parameter, a committee of experts gathered as decision makers (DMs) to<br />
consider the criteria <strong>and</strong> weights were assigned accordingly to each parameter, which leads to a decision making<br />
matrix that included the criteria <strong>and</strong> weights, <strong>using</strong> a multi-criteria-decision-making (MCDM) evaluation. The<br />
Method used to evaluate the weights was "Grouping" <strong>and</strong> for the evaluation, TOPSIS extended to a Fuzzy<br />
environment. The result of the decision making indicates the level of information technology of the organization<br />
under study <strong>and</strong> their respective rank. According to the simulation results <strong>and</strong> reviews of various experts in the<br />
field, the proposed model design was approved <strong>and</strong> can be applied to any organization which approaching<br />
information technology. The model was applied in two organizations <strong>and</strong> the results discussed about these<br />
organizations as a case study.<br />
Keywords: information technology, fuzzy set, TOPSIS, evaluation, MCDM<br />
1. Introduction<br />
Decision making related to <strong>Information</strong> technology problems is a complex issue due to its variety <strong>and</strong><br />
exp<strong>and</strong>ed area that it has many intangibles <strong>and</strong> non-financial benefits which are inherent in the<br />
implementation of IT (Gunasekaran,Love 2001). Multi criteria decision making (MCDM) methods are<br />
suitable for solving such problems that have more than one or two criteria or in many practical<br />
decision-making problems, such as the selection of a partner for an enterprise in the field of supply<br />
chain management, ranking research units of universities, Sustainable energy planning <strong>and</strong> so on<br />
(Brougha 2004, Pohekar , Ramach<strong>and</strong>ran 2004). So these criteria usually classified into two<br />
categories: subjective citeria: have linguistic/ qualitative definition, <strong>and</strong> objective criteria: are defined in<br />
quantitative terms (Liang 1999). Decision-makers usually need to provide their preferences over<br />
alternatives. TOPSIS is one of the well-known methods for multiple-criteria decision-making (MCDM),<br />
That was first developed by Hwang & Yoon (1981). This technique aids to select the best alternative<br />
which has the shortest distance from a positive ideal solution (PIS) but also has the farthest distance<br />
from the negative ideal solution (NIS) (Chen 2000). In this method the weights <strong>and</strong> rating of criteria<br />
are defined precisely (Teghem, Delhaye. & Kunsche 1989), but in a real world scenario, crisp data<br />
provided by decision-makers is usually are not reliable because of uncertainty of the situations, lack of<br />
time, knowledge or data (Atanassov,<strong>and</strong> Gargov 1989). Hence, good models for these problems<br />
should be able to accept vague values not only exact ones, so the use of fuzzy numbers <strong>and</strong> linguistic<br />
terms are suitable <strong>and</strong> adequate for this purpose (Lee 2009).<br />
There have been some papers that have used fuzzy TOPSIS in a variety of applications. Utilizing<br />
TOPSIS technique, in all of the decision problems, are considered extensively. Some of those<br />
articles, to a good extent, after introducing Fuzzy theory (Zadeh 1965), solve the difficulty of the<br />
uncertainties of the decision environment. Thus TOPSIS is extended to the fuzzy environment <strong>and</strong> a<br />
new method called FUZZY TOPSIS has been introduced. Most of the steps of TOPSIS can be easily<br />
generalized to a fuzzy environment, except max <strong>and</strong> min operations in finding the ideal solution <strong>and</strong><br />
negative ideal solution (Hwan & Yoon 1981). This new method has become a solution for the decision<br />
problems. In this section some of the researches in this have been discussed.<br />
For example, an applied this technique for modifying a framework of evaluating performance of<br />
companies based on financial ratio (Chu 2002). Boran , Genc, Kurt, & Akay 2009 have developed a<br />
model of fuzzy TOPSIS for selecting supplier. Chang <strong>and</strong> Chen 2009 have employed a similar<br />
approach <strong>using</strong> Shannon’s Entropy weighting method in their paper. Mahdavi et al. (2008) have been<br />
394
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
proposed a model of TOPSIS for the fuzzy environment with the introduction of suitable negation for<br />
acquiring ideal solutions. They have suggested a new method for measuring distances of ideals.<br />
In this paper a new method for evaluation an organization’s IT level is presented. This model is based<br />
on group decision making <strong>and</strong> multi criteria <strong>and</strong> alternatives <strong>and</strong> TOPSIS extended into a fuzzy<br />
environment is applied. The method is more suitable for human judgment where no identification<br />
metric for quantity values is present. Moreover, where quality values have no exact definition.<br />
After modifying a frame work for the model, linguistic terms are assigned to the weights <strong>and</strong> they are<br />
subsequently rated in order to evaluate the values of the criteria for each alternative(Zadeh 1975),<br />
that the concept of it was developed by Buckley (1985) <strong>and</strong> Kaufmann (1991). In next step the fuzzy<br />
Topsis model performed in IT units <strong>and</strong> finally, an expert group of decision makers evaluate these<br />
criteria <strong>and</strong> alternatives <strong>and</strong> rank them based on their final scores.<br />
2. Preliminaries<br />
2.1 Grouping decision making technique<br />
The Grouping Decision Making (GDM) technique is one of the prominent methods for evaluating<br />
importance of the weights of different criteria. Criteria are presented to the determiner simultaneously<br />
<strong>and</strong> the difference lies in the method of their presentation. It is probable that decision makers (DMs)<br />
make different decisions if they are faced with the criteria in one setting. For n decision makers, the<br />
equation is as follows:<br />
2.2 Fuzzy sets <strong>and</strong> operations<br />
In the following, some basic definitions of fuzzy sets from (Zimmermann 1996, Zadeh 1965, Chen<br />
2000) that are used in the paper are briefly.<br />
Definition 2.2.1. A fuzzy set à in a universe of discourse X is characterized by a membership function<br />
µÃ(x) which associates with elements x in X a real number in the interval [0,1]. The function value<br />
µÃ(x) is termed the grade of membership of x in Ã.<br />
Definition 2.2.2. A fuzzy set à of the universe of discourse X is convex if <strong>and</strong> only if,<br />
[λx1+(1-λ)x2] Min[µÃ(x1), µÃ(x2)] x1,x2 X where λ [0,1] (2)<br />
Definition 2.2.3. A fuzzy set à of the universe of discourse X is called a normal fuzzy set implying that<br />
Definition 2.2.4. A fuzzy number is a fuzzy subset in the universe of discourse X that is both convex<br />
<strong>and</strong> normal.<br />
Definition 2.2.5. A fuzzy set à defined on X <strong>and</strong> any number α [0,1], the α-cut à α , <strong>and</strong> the strong αcut<br />
à α+ are defined as<br />
à α ={<br />
à α+ ={ (4)<br />
The α-cut, contains all the elements of the universal set x whose membership are greater than or<br />
equal to the specified value of α.<br />
Definition 2.2.6. A triangular fuzzy number à can be defined by a triplet (a1,a2,a3).the membership<br />
function is defined as<br />
395<br />
(1)<br />
(3)
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
Definition 2.2.7. Some operations for positive fuzzy numbers described as (Zimmermann 1996)<br />
, α (6)<br />
Definition 2.2.8 Distance measurement ( ) can be calculated as (Chen 2000)<br />
3. Proposed method<br />
In this section, a fuzzy Topsis approach, with a new application for IT evaluating, will be proposed.<br />
The significance of the weights of various criteria <strong>and</strong> the ratings of qualitative criteria are considered<br />
as linguistic variables. These linguistic variables can then be expressed in positive triangular fuzzy<br />
numbers as indicated in tables 1 (Burkley Kafmann) <strong>and</strong> 2.<br />
Table 1: Linguistic variables for the importance weight<br />
Very low (VL)<br />
Low (L)<br />
Medium low (ML)<br />
Medium (M)<br />
Medium high (MH)<br />
High (H)<br />
Very High (VH)<br />
Table 2: Linguistic variables for the ratings<br />
Very poor (VP)<br />
Poor (P)<br />
Medium poor (MP)<br />
Medium (M)<br />
Medium good (MG)<br />
Good (G)<br />
Very Good (VG)<br />
In figure 1, linguistic value for importance weight is shown.<br />
(0; 0; 0:1)<br />
(0; 0:1; 0:3)<br />
(0:1; 0:3; 0:5)<br />
(0:3; 0:5; 0:7)<br />
(0:5; 0:7; 0:9)<br />
(0:7; 0:9; 1:0)<br />
(0.9;1.0;1.0)<br />
(0; 1; 10)<br />
(0; 10; 30)<br />
(10; 30; 50)<br />
(30; 50; 70)<br />
(50; 70; 90)<br />
(70;90; 100)<br />
(90;99;100)<br />
Using this method, the normalized decision matrix (X) is required typically, which allows a comparable<br />
scale for all rating in X by<br />
Where rij (0 ≤ rij ≤ 1) is defined as the normalized performance rating of alternative Ai on criteria Cj .<br />
396<br />
(12)<br />
(5)<br />
(7)<br />
(8)<br />
(9)<br />
(10)<br />
(11)
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
Considering the different significant of each criterion, the weighted normalized fuzzy decision matrix<br />
can be as<br />
1<br />
0.9<br />
0.8<br />
0.7<br />
0.6<br />
0.5<br />
0.4<br />
0.3<br />
0.2<br />
0.1<br />
0<br />
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1<br />
Figure 1: Linguistic values for importance weight<br />
Where. in which is assumed as a weighted matrix.<br />
According to the weighted normalized fuzzy decision matrix, we know that the elements , are<br />
normalized positive triangular fuzzy numbers <strong>and</strong> their ranges belong to the closed interval of zero<br />
<strong>and</strong> ne i.e. [0,1].<br />
Fuzzy positive-ideal solution (FPIS, ) <strong>and</strong> fuzzy negative-ideal solution (FNIS, ) defined as<br />
,<br />
Where <strong>and</strong> ,j= 1,2,....,n<br />
The distance of each alternative from <strong>and</strong> can be currently calculated as<br />
The proximity coefficient of each alternative is calculated as<br />
Obviously, as CCi approaches to 1, an alternative Ai is closer to the FPIS (A + ) <strong>and</strong> farther from VFIS<br />
(A - ).Therefore according to the proximity coefficient, all alternatives can be ranked <strong>and</strong> the best one<br />
will be selected from among a set of feasible alternatives.<br />
In table 3, four main factors of information technology are categorized (Lim 2001). As will be stated<br />
later on, it could be customized or changed into any organization. This table was chosen as a<br />
framework for our study.<br />
397<br />
(13)<br />
(14)<br />
(15)<br />
(16)
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
Table 3: Framework of criteria <strong>and</strong> related sub criteria<br />
factors criteria Sub-criteria<br />
IT<br />
strategy<br />
IT<br />
Resource<br />
IT<br />
Use<br />
IT<br />
Performance<br />
4. Numerical example<br />
Policy -ISP contents<br />
Organization Vision<br />
Appropriateness of implementation Plan<br />
Organization chart CIO<br />
Authority, Skill<br />
IT committee<br />
Establishment<br />
Viewpoint - president’s IT sight<br />
- CIO’s IT mind<br />
Investment IT Budget<br />
Rate of Investment(ROI)<br />
Infrastructure Network # LAN port/# total employee<br />
Hardware # PC/# total employee(#TE)<br />
#PC connected to LAN/#TE<br />
Software #installed Software/#PC<br />
Security #Virus vaccine SW/#PC<br />
Backup <strong>and</strong> Recovery<br />
facility Computer training centres<br />
Conference facility<br />
Human resource IT department #Division related<br />
Human<br />
#Individuals qualified <strong>and</strong> certified<br />
resource<br />
IT operation #Guidelines<br />
Helpdesk operation<br />
IT training #Training courses /#TE<br />
#Training/#IT resource<br />
PC PC use skill<br />
Internet Mean internet use time/day<br />
#Active Email ID/#TE<br />
Intranet #Electronic document/#total doc<br />
Internet usage<br />
<strong>Information</strong>/data sharing<br />
Functions of intranet(paperless system)<br />
User satisfaction Business Process improvement<br />
IS satisfaction<br />
Motivation<br />
Web Site Contents, <strong>Information</strong>, Interface<br />
Accessibility, design<br />
Public service<br />
Responsibility, transparency<br />
IT project #IT project(SI project)<br />
Amount of funds to IT company<br />
IT Event # IT Training for citizen<br />
# Various IT event<br />
In this section, the proposed model, in two different organizations, is applied <strong>and</strong> the simulations were<br />
carried out in MATLAB (R2008) On a Pentium IV, 2 GB RAM processor.<br />
Table 4: Importance weight for evaluating 38 sub-criteria<br />
Sub-Criteria Importance-weight<br />
C1 0.8002 0.9311 0.9791<br />
C2 0.7114 0.8670 0.9587<br />
C3 0.6598 0.8401 0.9587<br />
C4 0.6067 0.8021 0.9487<br />
C5 0.4288 0.6700 0.8435<br />
C6 0.6015 0.7905 0.9387<br />
C7 0.5964 0.7791 0.9289<br />
C8 0.5720 0.7740 0.9387<br />
C9 0.8202 0.8831 0.9345<br />
C10 0.5876 0.6431 0.6944<br />
C11 0.5805 0.6466 0.7067<br />
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Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
Sub-Criteria Importance-weight<br />
C12 0.5548 0.6086 0.6585<br />
C13 0.3387 0.4619 0.5692<br />
C14 0.4027 0.4765 0.5392<br />
C15 0.4808 0.5440 0.5951<br />
C16 0.2567 0.5165 0.7077<br />
C17 0.7870 0.9349 0.9895<br />
C18 0.4111 0.6323 0.8242<br />
C19 0.7519 0.8024 0.8445<br />
C20 0.8147 0.8650 0.9064<br />
C21 0.7508 0.8013 0.8435<br />
C22 0.7460 0.7966 0.8430<br />
C23 0.7199 0.7765 0.8285<br />
C24 0.3410 0.5574 0.7563<br />
C25 0.7289 0.8206 0.9043<br />
C26 0.8161 0.8831 0.9378<br />
C27 0.8450 0.9039 0.9519<br />
C28 0.8567 0.9157 0.9635<br />
C29 0.8537 0.9094 0.9546<br />
C30 0.8458 0.9047 0.9581<br />
C31 0.8070 0.9448 0.9895<br />
C32 0.7675 0.9251 0.9895<br />
C33 0.8139 0.9587 1.0000<br />
C34 0.7057 0.8834 0.9791<br />
C35 0.7675 0.9251 0.9895<br />
C36 0.8577 0.9135 0.9536<br />
C37 0.7833 0.8425 0.8965<br />
C38 0.8213 0.8840 0.9354<br />
Each sub-criteria is evaluated by a group which consists of 10 experts <strong>and</strong> their weights, with the<br />
contribution of Equation (1), have been calculated <strong>and</strong> the results are gathered in Table 4.<br />
Table 5: Evaluating sub-main criteria weights<br />
Criteria Fuzzy Weight Criteria Fuzzy Weight<br />
C1 0.7545 0.8985 0.9689 C11 0.5557 0.7671 0.9154<br />
C2 0.5990 0.7848 0.9338 C12 0.6357 0.7395 0.8144<br />
C3 0.6109 0.6109 0.6109 C13 0.4259 0.4259 0.4259<br />
C4 0.4289 0.4289 0.4289 C14 0.3736 0.5300 0.6204<br />
C5 0.5688 0.7689 0.9031 C15 0.8024 0.8024 0.8024<br />
C6 0.8650 0.8650 0.8650 C16 0.8013 0.8013 0.8013<br />
C7 0.7461 0.7461 0.7461 C17 0.3410 0.5574 0.7563<br />
C8 0.5467 0.5467 0.5467 C18 0.7832 0.7832 0.7832<br />
C9 0.7959 0.9428 0.9930 C19 0.7359 0.9040 0.9843<br />
C10 0.8221 0.8221 0.8221 C20 0.7117 0.7117 0.7117<br />
Table 6: Evaluating main criteria weights<br />
Criteria Fuzzy Weight Criteria Fuzzy weight<br />
C1 0.8139 0.9587 1.0000 C11 0.8346 0.9689 1.0000<br />
C2 0.7937 0.9487 1.0000 C12 0.5765 0.7756 0.9251<br />
C3 0.6062 0.7921 0.9251 C13 0.1178 0.3436 0.5792<br />
C4 0.3644 0.5894 0.7548 C14 0.6429 0.8209 0.9349<br />
C5 0.6434 0.8313 0.9587 C15 0.7870 0.9349 0.9895<br />
C6 0.6935 0.8759 0.9650 C16 0.6216 0.8005 0.9251<br />
C7 0.6997 0.8706 0.9689 C17 0.5621 0.7675 0.9251<br />
C8 0.2954 0.5165 0.7237 C18 0.5435 0.7484 0.9154<br />
C9 0.7057 0.8834 0.9791 C19 0.7740 0.9387 1.0000<br />
C10 0.7321 0.7823 0.8325 C20 0.6910 0.7413 0.7916<br />
The 38 sub-criteria by means of geometric mean, which means by <strong>using</strong> equation (1), have been<br />
transformed into 20 criteria. The results are listed in Table 5. Moreover, geometric mean of these 20<br />
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Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
criteria along with that of 20 main-criteria, which are evaluated by the group of experts, indicated in<br />
Table 6, constitutes the final weights of the main- criteria <strong>and</strong> is listed in Table 7.<br />
<strong>Information</strong> technology criteria in the IT unit of each organization, (Alternatives= A1, A2), have been<br />
evaluated by four experts of that organization (Pi; i=1, 2, 3, 4) <strong>and</strong> the evaluations are listed in Table<br />
8. Also, the linguistic terms with the contribution of Table 2 are converted into the fuzzy values <strong>and</strong> by<br />
means of agrouping technique are aggregated then in next step by <strong>using</strong> equation (1) they are<br />
transformed into the 20 values for the main- criteria. The result is shown in table 9. Moreover,<br />
considering the defined models the level of organization’s IT have been ranked.<br />
Table 7: Evaluating main <strong>and</strong> sub-criteria weights<br />
Criteria Fuzzy Weight Criteria Fuzzy Weight<br />
C1 0.7837 0.9281 0.9843 C11 0.6811 0.8621 0.9568<br />
C2 0.6895 0.8628 0.9663 C12 0.6053 0.7573 0.8680<br />
C3 0.6085 0.6956 0.7518 C13 0.2240 0.3826 0.4967<br />
C4 0.3954 0.5028 0.5690 C14 0.4901 0.6596 0.7616<br />
C5 0.6049 0.7994 0.9305 C15 0.7947 0.8661 0.8911<br />
C6 0.7745 0.8704 0.9136 C16 0.7058 0.8009 0.8610<br />
C7 0.7225 0.8059 0.8502 C17 0.4378 0.6540 0.8365<br />
C8 0.4019 0.5314 0.6290 C18 0.6525 0.7656 0.8468<br />
C9 0.7494 0.9126 0.9861 C19 0.7547 0.9212 0.9921<br />
C10 0.7758 0.8020 0.8273 C20 0.7013 0.7263 0.7506<br />
Table 8: Linguistic terms for evaluating the IT units<br />
A1 A2<br />
C P1 P2 P3 P4 P1 P2 P3 P4<br />
C1 VL VL VL VL M MH M M<br />
C2 VH MH H MH H H H H<br />
C3 VH H MH H H H H H<br />
C4 ML L ML VL M MH M MH<br />
C5 VL VL VL VL H VH H MH<br />
C6 VH H H H H H H H<br />
C7 M M M M M MH M M<br />
C8 VL L VL L H MH H H<br />
C9 VL VL L VL M M M M<br />
C10 50 50 50 50 50 50 50 50<br />
C11 55 55 55 55 50 50 50 50<br />
C12 90 90 90 90 75 75 75 75<br />
C13 65 65 65 65 55 55 55 55<br />
C14 H H H H M M M M<br />
C15 H H H H M M M M<br />
C16 VL VL L L M M M M<br />
C17 L L L ML H VH H H<br />
C18 VL L VL L M M M M<br />
C19 L L ML L M MH M M<br />
C20 VL L VL L M MH H MH<br />
C21 VL L L VL H MH M M<br />
C22 VL VL VL VL H MH H MH<br />
C23 VL ML L L H MH H H<br />
C24 L ML L L H VH MH H<br />
C25 MH H MH M M M M M<br />
C26 M M M M M VH M M<br />
C27 M M M M M MH M M<br />
C28 0 0 0 0 M M M M<br />
C29 0 0 0 0 L ML L L<br />
C30 0 0 0 0 H H H MH<br />
C31 M M M M M VH M M<br />
C32 0 0 0 0 H H H H<br />
C33 ML M ML M M M M M<br />
C34 M M MH M L ML L ML<br />
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Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
A1 A2<br />
C35 MH M M MH L L L VL<br />
C36 VL VL VL VL M M VL M<br />
C37 0 0 0 0 L L L L<br />
C38 H MH H MH M MH M M<br />
Table 9: The result of the two IT unit evaluations in fuzzy value<br />
Main-Criteria Alternative1 Alternative2<br />
C1 0.9164 0.9581 0.9746 0.9498 0.9966 1.0000<br />
C2 0.9009 0.9427 0.9646 0.9210 0.9659 0.9786<br />
C3 0.9012 0.9448 0.9616 0.9498 0.9966 1.0000<br />
C4 0.9222 0.9643 0.9808 0.9335 0.9792 0.9966<br />
C5 0.9000 1.0000 1.0000 0.9000 1.0000 1.0000<br />
C6 0.9254 1.0000 1.0000 0.9140 1.0000 1.0000<br />
C7 0.9519 1.0000 1.0000 0.9541 1.0000 1.0000<br />
C8 0.9310 0.9760 0.9871 0.9541 1.0000 1.0000<br />
C9 0.9308 0.9749 0.9871 0.8982 0.9416 0.9616<br />
C10 0.9514 0.9977 1.0000 0.9384 0.9838 0.9977<br />
C11 0.9106 0.9527 0.9745 0.9361 0.9816 0.9977<br />
C12 0.9106 0.9527 0.9745 0.9269 0.9723 0.9954<br />
C13 0.9211 0.9632 0.9797 0.8883 0.9317 0.9647<br />
C14 0.9537 1.0000 1.0000 0.9541 1.0000 1.0000<br />
C15 0.9462 0.9919 0.9989 0.9149 0.9583 0.9779<br />
C16 0 0 0 0 0 0<br />
C17 0 0 0 0.9292 0.9742 0.9852<br />
C18 0.9489 0.9943 1.0000 0.9179 0.9620 0.9808<br />
C19 0.9580 1.0000 1.0000 0.8942 0.9363 0.9683<br />
C20 0 0 0 0.9507 0.9966 1.0000<br />
In Table 10, fuzzy positive ideal solution (FPIS), fuzzy negative ideal solution (FNIS) <strong>and</strong> the proximity<br />
coefficient of each alternative( CCi )which are the results of <strong>using</strong> the mentioned models, corresponds<br />
to each unit, have been listed. Thus <strong>using</strong> this model the rank orders are as follows that A2 is bigger<br />
than A1.<br />
Table 10: Comparison results<br />
Ai FPIS FNIS CCi<br />
1 17.367 2.8487 0.1413<br />
2 15.9524 4.2181 0.2091<br />
5. Conclusion<br />
Considering the widespread dimensions of <strong>Information</strong> Technology <strong>and</strong> also its complicated nature, it<br />
is necessary to use multiple criteria decision models. Due to define the importance of respective<br />
criteria, taking advantage of various expert groups is needed, so the uses of fuzzy systems enable us<br />
to assess the importance of these criteria. In this paper the extended one MCDM model into a fuzzy<br />
environment (i.e. Fuzzy TOPSIS) is developed. Here, all criteria are assumed to be positive, thus<br />
positive triangular fuzzy numbers are assigned for assessing weights <strong>and</strong> values. The proposed<br />
model is not affiliated into the criteria <strong>and</strong> if needed, can be developed with changes in time,<br />
technology, <strong>and</strong> region simultaneously. According to the obtained results from the provided model ,<br />
which are listed in table 10, <strong>and</strong> performing it in two organizations as a case study, it has been found<br />
that in comparison CC 2 is closer to a unity than CC 1 <strong>and</strong> its distance from FINS is more far than that<br />
of the first organization. This indicates that the IT value of the second organization has a better rank<br />
order than that of the first organization. This model enable IT managers <strong>and</strong> executives to select the<br />
best among their suppliers or if different branches exist they can assess the performance of their units<br />
in ranking mode. This model can be programmed in the VISUAL software package <strong>and</strong> made<br />
401
Shabnam Pas<strong>and</strong>ide, Abbas Toloie Eshlaghi, <strong>and</strong> Reza Radfar<br />
available for units in order to facilitate the use for individuals <strong>and</strong> to make it quick <strong>and</strong> easy for the<br />
decision making process.<br />
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Zimmermann, H.J.(1996) Fuzzy set theory <strong>and</strong> its applications. Boston:Kluwer Academic Publishers.<br />
402
Can eGovernment Systems Bridge the Digital Divide?<br />
Elias Pimenidis 1 , Lazaros Iliadis 2 , <strong>and</strong> Christos Georgiadis 3<br />
1 University of East London, UK<br />
2 Democritus University of Thrace, Nea Oresteias, Greece<br />
3 University of Macedonia, Thessaloniki, Greece<br />
e.pimenidis@uel.ac.uk<br />
lIliadis@duth.gr<br />
geor@uom.gr<br />
Abstract: Electronic Government systems are often seen as panacea in the remedy of all failings of governance.<br />
With a history span of almost two decades, eGovernment implementations have often reached dead ends <strong>and</strong><br />
have regularly failed to deliver the promise that the governments that have initiated them have made to their<br />
citizens. Despite an abundance of development models <strong>and</strong> best case scenarios identified in literature,<br />
eGovernment services are continually failing to attract the citizens <strong>and</strong> to capture their trust <strong>and</strong> faith. The main<br />
reason quoted for such failures is the lack of innovation <strong>and</strong> inclusivity in the way a service is designed <strong>and</strong><br />
delivered. The digital divide is the major risk of marginalizing sectors of society or even whole continents due to<br />
lack of access to web based services. In the developing world it is mainly the lack of, or poor infrastructure that<br />
maintains <strong>and</strong> often widens the divide, while in the developed world it is lack of skills <strong>and</strong> difficulty of accessing<br />
services that leads citizens to ab<strong>and</strong>on their efforts in <strong>using</strong> services online. Whatever the reason that leads to<br />
non-access of services the effect is similar <strong>and</strong> those citizens that fall victim to it are increasingly consumed into<br />
the trap of the digital divide. Efforts <strong>and</strong> initiatives to address the divide have primarily focused on building the<br />
infrastructure <strong>and</strong> providing access to the web. However, the quality <strong>and</strong> accessibility of online services is quite<br />
often then reason why citizens distance themselves from web-based services <strong>and</strong> the internet in total. This paper<br />
attempts to explore the shortfall in criteria for evaluating a government’s efforts in planning, implementing <strong>and</strong><br />
delivering services that address the operational requirements of efficient government, but equally cater for the<br />
needs of the citizens as end users of the service.<br />
Keywords: eGovernment, digital divide, eGovernment development, eGovernment attractiveness, eGovernment<br />
evaluation<br />
1. Introduction<br />
The majority of countries on a worldwide scale have implemented or at least have a strategic plan in<br />
place for implementing eGovernment applications aiming to improve the performance of governance<br />
delivery <strong>and</strong> improving the way citizens interact <strong>and</strong> complete transactions with government<br />
organizations <strong>and</strong> departments.<br />
Although the above general aim of eGovernment systems appears inclusive of the majority of cases,<br />
the specific aims of the different eGovernment systems vary considerably. The more advanced<br />
countries in terms of eGovernment systems deployment are found amongst the group of developed<br />
countries <strong>and</strong> they usually are the basis upon which other countries form their strategies <strong>and</strong><br />
implementations (Savvas et al 2009, Shareef et al 2010).<br />
Such imitations of “successful” results often lead to problems as the countries <strong>and</strong> organizations that<br />
adopt them lack in compatibility of the application domain, the infrastructure to capitalise on the<br />
potential benefits <strong>and</strong> in most cases cannot even guarantee the accessibility of the service to its<br />
intended recepients. This creates a different notion of the digital divide, not one relating to the lack of<br />
technology <strong>and</strong> internet access, but one that relates to lack of available services that target the needs<br />
of their customers. In contrast, when citizens <strong>and</strong> businesses find available <strong>and</strong> desirable online<br />
services they’ll seek all possible routes to access them to reap the benefits <strong>and</strong> in this way the<br />
obstacles leading to the digital divide can be overcome (Pimenidis et al 2009).<br />
What constitutes appropriate <strong>and</strong> successful eGovernment services <strong>and</strong> what are the criteria upon<br />
which we can evaluate a country’s potential in delivering suitable services to its citizens are issues<br />
that have been widely explored by researchers but with the focus being primarily on technological<br />
issues. Literature is rich in papers attempting to discuss this issue, with the majority foc<strong>using</strong> on<br />
concepts such the e-readiness rankings (recently renamed digital economy rankings) <strong>and</strong> their<br />
relevant criteria as provided by the Economist Intelligence Unit (2011) <strong>and</strong> the eGovernment<br />
development rankings as provided by the eGovernment survey conducted by the United Nations<br />
Department of Economic <strong>and</strong> Social Affairs (UN 2010).<br />
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Elias Pimenidis, Lazaros Iliadis, <strong>and</strong> Christos Georgiadis<br />
2. eGovernment capacity measurement<br />
Since the dawn of online services many people believed that the power of information <strong>and</strong><br />
communications technology (ICT) could drive social change in predictable <strong>and</strong> desirable ways. The<br />
past two decades have supplied many successful examples of eGovernment services, but there is at<br />
least an equal number of those that demonstrate the triumph of hope over experience in the ability of<br />
eGovernment to drive change. The use of government portals, the shop window of many<br />
eGovernment programs, has on average attracted no more than 30% of the population, making them<br />
appear as either inefficient or in the worst case exposing the rest of the citizens to the risk of the<br />
digital divide(Millard 2010). eGovernment is promoted as a means of transforming government,<br />
empowering the citizens <strong>and</strong> ushering in a new era of deliberative democracy. In doing so though<br />
governments <strong>and</strong> related agencies do not shift the focus away from technology <strong>and</strong> towards the social<br />
<strong>and</strong> process reengineering exercises required to empower such services. Instead ICT remain at the<br />
core of a country’s “world view” of digital services <strong>and</strong> the ability to improve efficiency, effectiveness<br />
<strong>and</strong> social inclusion <strong>and</strong> equality.<br />
Since 2000, the Economist Intelligence Unit (EIU) has been assessing the world's largest economies<br />
on their ability to absorb information <strong>and</strong> communications technology (ICT) <strong>and</strong> to use it for economic<br />
<strong>and</strong> social benefit. This benchmarking exercise was originally termed the "e-readiness rankings" <strong>and</strong><br />
has evolved as the definitive guide to a country’s potential of delivering technology empowered<br />
services. Since 2010 the study has been renamed as the "digital economy rankings", to reflect the<br />
increasing influence of ICT in economic (<strong>and</strong> social) progress. Despite the social element taken into<br />
consideration for the first time, the emphasis has not shifted from its technology dominated core.<br />
Infrastructure metrics, points of access, telephone l<strong>and</strong>line density are predominant amongst the<br />
assessment criteria to rank a country as to its ability to develop <strong>and</strong> deliver online services. The digital<br />
economy rankings assess the quality of a country's ICT infrastructure <strong>and</strong> the ability of its consumers,<br />
businesses <strong>and</strong> governments to use ICT to their benefit. It is perceived that when a country uses ICT<br />
to conduct more of its activities, the economy can become more transparent <strong>and</strong> efficient. The EUI<br />
ranking allows governments to gauge the success of their technology initiatives against those of other<br />
countries, while companies that wish to invest or trade internationally can use them as an overview of<br />
the world's most promising business locations from an ICT perspective (EIU 2011).<br />
The eGovernment survey conducted by the UN addresses more issues relating to social aspects <strong>and</strong><br />
targets transparency in government <strong>and</strong> the involvement of the public in decision making. The survey<br />
attempts to benchmark technology used <strong>and</strong> the relevant investment against the effectiveness of the<br />
solutions (UN 2010).<br />
None of the above reports seeks the reasons for failure or slow progress in a country’s capacity to<br />
reflect the public’s / user’s requirements into its plans <strong>and</strong> implementations of government led online<br />
service. Instead a blanket assumption that all shareholders would benefit from the implementation of<br />
eGovernment services has been adopted, without investigating whether these reflect actual user<br />
needs as these are perceived by the public.<br />
2.1 eGovernment expectations<br />
The World Bank’s website provides an extensive definition of eGovernment as… “eGovernment refers<br />
to the use by government agencies of information technologies (such as Wide Area Networks, the<br />
Internet, <strong>and</strong> mobile computing) that have the ability to transform relations with citizens, businesses,<br />
<strong>and</strong> other arms of government. These technologies can serve a variety of different ends: better<br />
delivery of government services to citizens, improved interactions with business <strong>and</strong> industry, citizen<br />
empowerment through access to information, or more efficient government management. The<br />
resulting benefits can be less corruption, increased transparency, greater convenience, revenue<br />
growth, <strong>and</strong>/or cost reductions”… (World Bank Group, 2009).<br />
In <strong>using</strong> such a highly strategic but rather generic definition as the basis for assessing eGovernment<br />
effectiveness researchers tend to miss out on the issues that are central to the requirements of the<br />
public. Unless these issues are addressed, the public / users won’t be attracted to online government<br />
services regardless of the technology available to them. What most governments aim for can be<br />
summarised (but not limited to) in the following. From this list only the first point is directly relevant to<br />
the public in terms of addressing direct requirements, while the others are long term targets of<br />
government which may benefit the public in general on a long term basis.<br />
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Higher quality of services<br />
Elias Pimenidis, Lazaros Iliadis, <strong>and</strong> Christos Georgiadis<br />
Improved efficiency of exercising governance<br />
Reduced waste in public administration<br />
Wider inclusiveness<br />
Reduced corruption<br />
Higher government accountability<br />
The public needs / seeks services that address their problems in a direct <strong>and</strong> immediate way <strong>and</strong><br />
provide solutions that are cost effective for them. The issues of technology <strong>and</strong> access to connectivity<br />
can be overcome if the right incentives are there <strong>and</strong> if the citizens can see tangible benefits from<br />
<strong>using</strong> them. The research literature is full of examples where even in remote <strong>and</strong> poorly serviced<br />
areas in the world users utilise any technology available to reap the benefits of solutions that would<br />
provide convenience <strong>and</strong> cost savings in communicating <strong>and</strong> transacting with governments (Bolissian<br />
et al 2006, Buys et al 2008, Pimenidis et al 2009,).<br />
3. Citizen focused services<br />
For governments to evaluate their own strategies for developing <strong>and</strong> deploying online services for the<br />
use of their citizens, they need to be able to answer the following questions.<br />
Does it Work?<br />
From whose point of view is the service right?<br />
How attractive are services to citizens?<br />
Are citizens “Forced” into <strong>using</strong> eGovernment services?<br />
How do we assess the success of eGovernment services?<br />
What about those that are not computer literate or cannot access the services for other reasons<br />
(such as disability)?<br />
James, as early as 2005, claimed that eGovernment initiatives can only succeed if government<br />
information services are easy to underst<strong>and</strong> <strong>and</strong> to locate by citizens with basic access to ICT <strong>and</strong><br />
minimal computer literacy. Similarly, interacting with government must be quick <strong>and</strong> straightforward<br />
while to address the needs of people that might be otherwise restricted to accessing online services,<br />
a range of delivery modes should be offered. In such a situation people will be able to choose from a<br />
range of service delivery modes, but will prefer the added convenience <strong>and</strong> functionality of online,<br />
electronic <strong>and</strong> voice-based channels, as the quality <strong>and</strong> accessibility of those services improves.<br />
Governments must focus on continuing to ensure that people with a disability can access government<br />
information <strong>and</strong> services with ease.<br />
The Australian government included the following guidelines as part of their strategic plan towards<br />
inclusive <strong>and</strong> effective eGovernment services.<br />
Authentication <strong>and</strong> personal or business information will need to be provided only once through a<br />
simplified government sign-on, to access government information <strong>and</strong> services <strong>and</strong> for ongoing<br />
interactions, transactions <strong>and</strong> updates. This will be a single sign-on, except where circumstances<br />
require otherwise. It will be possible to group diverse transactions <strong>and</strong> complete them at the same<br />
time, without navigating the underlying structure <strong>and</strong> complexity of government. People will be able to<br />
interact with many areas of government without needing to underst<strong>and</strong> exactly which agencies deliver<br />
which services. Privacy <strong>and</strong> security rights will be paramount in all service delivery channels offered<br />
by government, <strong>and</strong> will underpin the implementation of this strategy. People will manage the integrity<br />
of <strong>and</strong> access to their own personal details. Anyone unable to do this will be able to nominate agents<br />
to manage personal details on their behalf (Department of Finance <strong>and</strong> Administration, 2006).<br />
In adopting similar strategies governments across the world <strong>and</strong> in particular in developing countries<br />
will need to increasingly manage their programs <strong>and</strong> interactions with stakeholders electronically,<br />
providing organisations <strong>and</strong> businesses with the same benefits <strong>and</strong> options of interacting<br />
electronically.<br />
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Elias Pimenidis, Lazaros Iliadis, <strong>and</strong> Christos Georgiadis<br />
Governments need to present a consistent <strong>and</strong> unified face regardless of whether approaches are<br />
made in person, over the telephone, <strong>using</strong> the Internet or any other form of technology. This<br />
consistency will address the common frustration associated with trying to underst<strong>and</strong> government<br />
structures to find the right agency. Government must also match private sector best practice for<br />
electronic interactions. This consistency will extend to non-government entities delivering government<br />
services. For example, the burden for business will be reduced by increasingly embedding<br />
government processes in the natural systems being used by the business community (Shareef et al<br />
2010).<br />
3.1 Citizen’s requirements for eGovernment services<br />
Simply converting paper bureaucracy into digital bureaucracy will not satisfy many people; in time it’ll<br />
dissuade even the most avid users of online services <strong>and</strong> would result in widening or even worse<br />
creating a wider gap in the context of the digital divide (Pimenidis et al 2009).<br />
eGovernment should focus on the use of ICT to assist in the transformation of government structures<br />
<strong>and</strong> operations for cooperative <strong>and</strong> integrated service delivery. If the technology does not result in<br />
better outcomes for citizens <strong>and</strong> agencies it will mean nothing more than an added cost to<br />
government expenses. Imitations of “successful” results often lead to problems as the countries <strong>and</strong><br />
organizations that adopt them lack in compatibility in the application domain, the infrastructure to<br />
capitalise on the potential benefits <strong>and</strong> in most cases cannot even guarantee the accessibility of the<br />
service to the its intended audience.<br />
To add further to the above, governments should use the quality of services provided as a means of<br />
reinstating trust to government <strong>and</strong> enhancing transparency of operations. The Freedom on the Net<br />
2011 report identifies that the more technological advances that appear in the use of Internet related<br />
technologies, the higher the rate of violations of citizens rights identified in terms of freedom in the use<br />
of the Internet. Such violations are not just limited to countries where democracy has been oppressed<br />
over a considerable time, but also in democratic countries such as the USA, the United Kingdom <strong>and</strong><br />
Australia (Kelly <strong>and</strong> Cook 2011). Although such violations are infrequent in the above mentioned<br />
countries when compared to those related to countries such as China, Cuba <strong>and</strong> Iran, they still<br />
undermine the potential <strong>and</strong> objectives of eGovernment services inducing or increasing mistrust to<br />
government. At the same time, the negative relation between technology <strong>and</strong> transparency in<br />
communication, as portrayed in the above report, invalidates or at least reduces the gravity of<br />
technology as the prominent <strong>and</strong> decisive factor in assessing a country’s readiness to deliver useful<br />
<strong>and</strong> reliable online services.<br />
Advanced countries in terms of use of the Internet <strong>and</strong> related ICT in conducting business <strong>and</strong><br />
government transactions such as the UK, have long accepted the need to different strategies when<br />
addressing the needs of eGovernment strategy. The UK approach to Transformational Government is<br />
about creating conditions in which government transforms itself. Its implementation plan, since 2006,<br />
draws upon best practice in the public <strong>and</strong> private sector to create that transformational environment,<br />
bringing technology <strong>and</strong> business functions together through a Service Transformation Board. The<br />
key objective of Transformational Government has been to identify barriers to change that could not<br />
be removed by individual departments but that required collective action. The implementation plan<br />
explains what the Service Transformation Board <strong>and</strong> other stakeholders should do to address these<br />
issues (HM Government 2005).<br />
The UK <strong>and</strong> Australia are only two examples amongst the technologically advanced ones where the<br />
right strategy <strong>and</strong> successful implementation exist harmoniously. However, the majority of countries<br />
are still seeking a successful blend in achieving the above <strong>and</strong> in doing so, they often risk driving a<br />
section of their citizens on the verge of the digital divide.<br />
4. The digital divide <strong>and</strong> its relevance<br />
The digital divide has been termed as the lack of / or limited access to the internet <strong>and</strong> electronic<br />
services. As access improves with improvements to infrastructure, reductions in connectivity costs<br />
<strong>and</strong> increase in b<strong>and</strong>width available, a new notion of the digital divide emerges through the lack of<br />
availability of suitable, easy to use <strong>and</strong> useful e-services for the wider public. The advent of new<br />
technologies embraced by the tech-savvy generations lead to marginalization of those who do not<br />
have access or do not have the means or the incentives to embrace them. Mobile systems appear to<br />
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Elias Pimenidis, Lazaros Iliadis, <strong>and</strong> Christos Georgiadis<br />
make the breakthrough in terms of accessibility, but the infrastructure has to be provided, services to<br />
be developed in the context of meeting the users’ / citizens’ objectives (Pimenidis et al 2009, Buys et<br />
al 2008).<br />
Internet usage numbers are most often cited to describe this divide. In the year 2000 the Millennium<br />
Declaration called upon its adherents to ‘make available the benefits of new technologies, specifically<br />
information <strong>and</strong> communications’. Three indicators were chosen to measure ICT availability in<br />
countries <strong>and</strong> the indicator pertaining to the Internet is defined as the number of users per 100<br />
inhabitants. James (2005) argued that the Internet use indicator applies poorly to the latter sector,<br />
because there it represents the illegitimate transposition of a developed-country concept to an entirely<br />
different <strong>and</strong> inappropriate institutional setting.<br />
4.1 The digital divide <strong>and</strong> eGovernment services<br />
The digital divide is discussed in academic, professional <strong>and</strong> popular writing <strong>and</strong> comments under a<br />
variety of categorizations. These include north-south, developed-developing world, urban-rural, richpoor<br />
<strong>and</strong> so on. The contemporary divide can take some unusual forms. For example there has<br />
recently been discussion of a divide between those who use the Internet <strong>and</strong> those who can use it,<br />
but choose not to do so because of the marginal opportunity cost of leisure time (Goldfarb <strong>and</strong> Prince<br />
2008). Another form of divide is between those who are highly sensitive about <strong>and</strong> those who are<br />
indifferent to personal privacy. The latter two divisions are manifestations of more fundamental<br />
factors than a shortage of time, a deficiency in technological skills or a lack of adequate access to the<br />
Internet.<br />
When a citizen has to deal with the state, such transactions have two distinct <strong>and</strong> important<br />
characteristics. First such transactions are often m<strong>and</strong>atory <strong>and</strong> second the state is the monopoly<br />
provider of the service she needs or is obliged to use. In principle, in such circumstances, key public<br />
sector values, including equity <strong>and</strong> fairness, decree that the government cannot force a citizen to use<br />
an on-line service without access to technology, the ability to use it <strong>and</strong>, perhaps as noted above,<br />
support in <strong>using</strong> it. It may be possible for businesses to offer products <strong>and</strong> services solely on-line<br />
(<strong>and</strong> this is increasingly common), but to offer a m<strong>and</strong>atory government service purely in on-line form<br />
is to discriminate against certain classes of citizens. In practice therefore even where there is top<br />
class on-line service available, as long as there continues to be a digital divide, governments will<br />
continue to be obliged to maintain at least one <strong>and</strong> possibly several alternative channels for service<br />
delivery. Beneficially though this might be in terms of bridging the digital divide, the maintenance of<br />
services across multiple channels might have considerable impact on cost, coordination <strong>and</strong><br />
consistency (Ebbers et al, 2008; Janssen et al, 2003).<br />
To aid discussion, a five way classification of digital divisions will be used. These five forms of divide<br />
can be mapped onto the EU e-inclusion categories (EU, 2006b). Each form presents a different set of<br />
socio-technical problems <strong>and</strong> requires a different set of solutions – assuming that a solution is<br />
required at all. The five categorizations together with the corresponding EU e-inclusion categories in<br />
parentheses are as follows:<br />
Structural (e-accessibility, geographic, inclusive eGovernment);<br />
Demographic (ageing, socio-cultural, inclusive eGovernment);<br />
Educational (competences, socio-cultural);<br />
Economic (social-cultural, inclusive eGovernment);<br />
Physiological (e-accessibility, socio-cultural, inclusive eGovernment).<br />
These categories are by no means mutually exclusive. A group or individual will most probably fall<br />
into several of them simultaneously.<br />
Given the above categories one can extract valid <strong>and</strong> justifiable criteria for assessing the suitability of<br />
a country’s potential to deliver useful online services that provide added value to their users <strong>and</strong><br />
promote inclusivity. E-readiness <strong>and</strong> eGovernment capability can no longer be assessed solely on the<br />
basis of a set of criteria that closely relate to the use of <strong>and</strong> availability of ICT, but should exp<strong>and</strong> to<br />
factors that relate to <strong>and</strong> address critical issues of the digital divide (Savvas et al 2009).<br />
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5. A strategy for enhanced services <strong>and</strong> inclusivity<br />
Currently, eGovernment systems aim at improving operational efficiency in governance primarily<br />
targeting cost-cutting <strong>and</strong> faster processing of taxes <strong>and</strong> other income generating activities, ignoring<br />
or not foc<strong>using</strong> in the best of cases on the citizens’ needs. One cannot help but asking the question<br />
whether governments have the capacity, the interest <strong>and</strong> the incentive to improve eGovernment<br />
systems? Only if they really mean to achieve real e-democracy, to fight corruption, to improve the<br />
level of services, to minimise citizen life disruption in receiving such services <strong>and</strong> achieve equality<br />
across society will they strive to develop such systems <strong>and</strong> services to the citizen’s advantage.<br />
Web-services <strong>and</strong> the semantic web offer an opportunity for governments to capitalise on existing<br />
services <strong>and</strong> offer citizens the choice of a variety of safe <strong>and</strong> trusted vehicles through which they can<br />
interact with government services. The wider the choice <strong>and</strong> the wider spread the mediums of delivery<br />
of such services they become, the greater the level of inclusivity will be achieved. Infrastructure<br />
problems cost of access <strong>and</strong> familiarity with emerging technologies can be overcome if the service is<br />
attractive <strong>and</strong> if it is delivered over a range of access media (Kolsaker <strong>and</strong> Lee-Kelley 2009,<br />
Pimenidis et al 2009).<br />
5.1 The case Australia<br />
Conforming to the above <strong>and</strong> aiming to promote inclusivity <strong>and</strong> equal treatment of all members of the<br />
public that interact with the government, presenting a consistent <strong>and</strong> unified face regardless of<br />
whether approaches are made in person, over the telephone, <strong>using</strong> the Internet or any other form of<br />
technology, the Australian government used the model portrayed in figure 1 below.<br />
Here the last aspect of the model is value for money shown as the bottom layer of the diagram. The<br />
location of this layer does not signify order of importance (i.e. least important) but illustrates the<br />
pathway through which it is achieved. Therefore if one were to assess the capability of such a system<br />
to deliver value for money both to the user (member of the public) <strong>and</strong> the government as owner of<br />
the system, one would have to consider aspects of connectivity <strong>and</strong> capabilities of the public sector.<br />
The reader should note that the concept of technology used is not relevant as there are multiple<br />
channels of access, but what matters most is the process integrating the four levels of service delivery<br />
shown in the middle of the government.<br />
Figure 1: Connected government - client's view – (source Department of Finance <strong>and</strong> Administration<br />
2006)<br />
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Elias Pimenidis, Lazaros Iliadis, <strong>and</strong> Christos Georgiadis<br />
The government uses the opportunities presented by connected government <strong>and</strong> technology to<br />
improve its business processes. It will reform poorly designed <strong>and</strong> redundant processes <strong>and</strong> reduce<br />
duplication by st<strong>and</strong>ardising similar processes across agencies <strong>and</strong>, where possible, combine those<br />
processes. Agencies will operate in a collaborative, connected manner, rather than in isolation from<br />
each other.<br />
The considerable benefits from a more connected approach include more agile service delivery <strong>and</strong><br />
the ability to quickly redeploy services to different sites, including temporary locations (Department of<br />
Finance <strong>and</strong> Administration 2006).<br />
A government’s ability to respond to emergencies will also be enhanced. All the parties that need to<br />
respond to an emergency situation will be linked <strong>and</strong> operating under a common framework.<br />
Connected government <strong>using</strong> new technology also offers new ways to think about policy <strong>and</strong> delivery.<br />
In this way a government can provide a seamless service to people progressing through different<br />
stages of initiatives that cross several agencies. As connected government exp<strong>and</strong>s <strong>and</strong> a whole of<br />
government approach to systems is adopted, more opportunities like these will arise. In doing so the<br />
government achieves efficiency in its own processes <strong>and</strong> appears more attractive <strong>and</strong> potentially<br />
more trustworthy to the citizen.<br />
In following the above approach the government is able to review <strong>and</strong> consolidate its websites, so that<br />
it is easier for people to find what they want. A simpler, more streamlined government online presence<br />
will be easier to promote, enhancing awareness <strong>and</strong> use. User accounts will address the growing<br />
diversity of people interacting with government. Each user will be able to construct a personalised<br />
view of government highlighting the services <strong>and</strong> information most relevant to their needs.<br />
Providing multiple points of access the government addresses the risk of inducing more acute forms<br />
of digital divide of the types discussed in section three above. Citizens feel the benefits of equal<br />
treatment, do not feel marginalized <strong>and</strong> will gradually be attracted by the simplicity of the process in<br />
<strong>using</strong> technology that already is available in everyday devices that are in their possession, i.e. mobile<br />
phones, television sets, etc.<br />
The emphasis shifts away from technology <strong>and</strong> moves towards processes which reflect educational<br />
<strong>and</strong> cultural diversity, as well as the need to support people with disabilities.<br />
Systems that address all of the above requirements will most probably be able to address the digital<br />
divide whether this of international or transnational extent. The objectives upon which such efforts are<br />
centred should also form the basic (along with access to ICT) criteria in assessing a country’s ability<br />
to offer effective services to its public (Janssen et al, 2003).<br />
6. Conclusion<br />
The sole reliance of a country’s effort on improving access to ICT in improving the way the public<br />
interacts with the government is a rather flawed approach. The wider the choice <strong>and</strong> the wider spread<br />
of the mediums of delivery of e-services, the greater the level of inclusivity will be achieved <strong>and</strong> wider<br />
inclusivity will yield better interaction <strong>and</strong> satisfaction.<br />
Problems with infrastructure, cost of access <strong>and</strong> familiarity with emerging technologies can be<br />
overcome if the service is attractive <strong>and</strong> if it is delivered over a range of access media.<br />
The Digital Divide can be overcome if the now mature technologies are put to the right effect to<br />
contribute to process reengineering, transforming government to a more effective <strong>and</strong> public friendly<br />
entity, delivering value for money to its citizens.<br />
A key question that remains unanswered <strong>and</strong> could provide the scene for further research is the<br />
availability of an evaluation framework for assessing a government’s strategy <strong>and</strong> its resulting<br />
implementation in terms of their ability to address both governmental <strong>and</strong> end user requirements.<br />
References<br />
Bolissian J., Pimendis E., liadis L., <strong>and</strong> Andreopoulou Z. (2006) E-Readiness or Digital Exclusion – Evaluating a<br />
Country’s Status, Proceedings of the 2nd E-Democracy National Conference with International<br />
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Participation, 16-17 March 2006, Athens Bar Association <strong>and</strong> the Scientific Council for the <strong>Information</strong><br />
Society, Athens, Greece, pp. 87-96<br />
Buys, P., Dasgupta, S., Thomas, T. <strong>and</strong> Wheeler, D. (2008) Determinants of a Digital Divide in Sub-Saharan<br />
Africa: A Spatial Econometric Analysis of Cell Phone Coverage, The World Bank Development Research<br />
Group, Sustainable Rural <strong>and</strong> Urban Development Team, Washington DC, USA.<br />
Department for Business,Innovation <strong>and</strong> Skills (BIS) <strong>and</strong> Department for Culture, Media <strong>and</strong> Sport (dcms) (2009),<br />
Digital Britain – Final Report, The Stationery Office Limited.<br />
Department of Finance <strong>and</strong> Administration (2006) Responsive Government A New Service Agenda 2006<br />
eGovernment Strategy, Australian Government <strong>Information</strong> <strong>Management</strong> Office<br />
Ebbers W., Pieterson W. <strong>and</strong> Noordman H. (2009). Electronic government: Rethinking channel management<br />
strategies, Government <strong>Information</strong> Quarterly, 25, 181–201.<br />
EU (2006). e-Inclusion, European Commission, Brussels. Retrieved January 18, 2011 from:<br />
http://ec.europa.eu/information_society/policy/accessibility/index_en.htm<br />
Goldfarb A. <strong>and</strong> Prince, J. (2008.) Internet adoption <strong>and</strong> usage patterns are different: Implications for the digital<br />
divide, <strong>Information</strong>, Economics <strong>and</strong> Policy, 20(1), 2-15.<br />
HM Government (2005) Transformational Government Implementation Plan, UK Cabinet Office<br />
James J. (2005) The global digital divide in the Internet: developed countries constructs <strong>and</strong> Third World<br />
Realities, Journal of <strong>Information</strong> Science, Vol. 31, No. 2, pp 114–123<br />
Janssen M. Wagenaar R. <strong>and</strong> Beerens J. (2003) Towards a Flexible ICT-Architecture for Multi-Channel<br />
EGovernment Service Provisioning, In R. Sprague (ed.), Proceedings of the 36th Annual Hawaii<br />
International Conference on System Sciences, Track 5, 148-157.<br />
Kelly S. <strong>and</strong> Cook S. (eds) (2011) Freedom on the Net 2011 A Global Assessment of Internet <strong>and</strong> Digital Media,<br />
Freedom House, NewYork<br />
Kolsaker A. <strong>and</strong> Lee-Kelley L. (2009) Singing from the Same Hymnsheet? The Impact of Internal Stakeholders<br />
on the Development of e-Democracy, Electronic Journal of eGovernment Vol. 7 No. 2 pp155 – 162<br />
Milliard, J. (2010). Government 1.5 – is the bottle half full or half empty? European Journal of ePractice, 9.3.<br />
Retrieved January 26, 2011 from: www.epractice.eu/files/European Journal epractice Volume 9.3_1.pdf<br />
Pimenidis E, Sideridis A.B, Antonopoulou E (2009) Mobile Devices <strong>and</strong> Services: Bridging the Digital Divide in<br />
Rural Areas, International Journal of Electronic Security <strong>and</strong> Digital Forensics (IJESDF), Vol. 2, No. 4, pp.<br />
424-434<br />
Savvas I, Pimenidis E, Sideridis A. (2009) Mapping eGovernment stakeholder requirements to public<br />
administration operational needs , IADIS International Journal on WWW/Internet, Vol. 7, No. 1, pp 152-165<br />
Shareef S, Pimenidis E, Arreymbi J <strong>and</strong> Jahankhani H (2010) ‘Vision of Electronic Government Implementation in<br />
the Kurdistan Region of Iraq’, Proceedings of the 10th European Conference on eGovernment, University of<br />
Limerick, Irel<strong>and</strong>, 17-18 June 2010, pp 575-584.<br />
Sipior J <strong>and</strong> Ward B (2005) Bridging the Digital Divide for eGovernment inclusion: A United States Case Study,<br />
Electronic Journal of eGovernment Vol. 3, No 3, pp 137-146<br />
The Economist Intelligence Unit (2010) Digital economy rankings 2010-Beyond e-readiness, The Economist<br />
United Nations Department of Economic <strong>and</strong> Social Affairs (2010) United Nations EGovernment Survey 2010 -<br />
Leveraging eGovernment at a time of financial <strong>and</strong> economic crisis, The UN Publishing Section, New York<br />
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Contributions to the Measurement <strong>and</strong> <strong>Management</strong> of<br />
Intellectual Capital – an Accounting Perspective<br />
Rui Alex<strong>and</strong>re Pires 1 <strong>and</strong> Maria do Céu Gaspar Alves 2<br />
1<br />
University of Minho, Portugal<br />
1<br />
EsACT - Polytechnic Institute of Bragança, Mir<strong>and</strong>ela, Portugal<br />
2<br />
NECE / University of Beira Interior, Covilhã, Portugal<br />
rucapires@ipb.pt<br />
mceu@ubi.pt<br />
Abstract: intellectual capital (IC) represents a set of strategic assets, with an intangible nature, which contributes<br />
to the creation of competitive advantages <strong>and</strong> sustainable value, <strong>and</strong> therefore should be identified, measured,<br />
managed <strong>and</strong> published by organizations. The research carried out has shown the importance of IC for a<br />
sustainable success of an organization but also the paucity <strong>and</strong> the poverty of means to measure IC <strong>and</strong> to<br />
efficiently manage these important resources. The paper reviews the theoretical <strong>and</strong> empirical IC literature <strong>and</strong><br />
has as main purpose to obtain an enhanced underst<strong>and</strong>ing of the contributions of management control <strong>and</strong><br />
accounting systems for IC measurement <strong>and</strong> management, <strong>and</strong> particularly about the relationship between<br />
strategic management accounting practices (SMAP) <strong>and</strong> IC. Thus, specific objectives of this study are:<br />
addressing the definition of intellectual capital, identifying the main components of IC; underst<strong>and</strong>ing the role of<br />
management control <strong>and</strong> accounting in the measurement <strong>and</strong> management of IC <strong>and</strong>, addressing the<br />
relationship between IC <strong>and</strong> SMAP. The literature review was done <strong>using</strong> different sources. First, we used the<br />
ProQuest search keys on “Intellectual capital”, “Intangible assets” <strong>and</strong> “Strategic management accounting<br />
practices”. Then a manual search was done covering some of the major journals in the field. Next, we searched<br />
the sites FASB <strong>and</strong> IASB concerning statements <strong>and</strong> reporting relative to IC. Finally, we conducted a world-wide<br />
web search. In the particular case of SMAP it is visible that they enable the identification <strong>and</strong> management of<br />
some IC resources as the ability of innovation, production structures (with e.g. target costing), management of<br />
quality systems (with e.g. quality costing) <strong>and</strong> relationships with suppliers <strong>and</strong> customers (with e.g. the value<br />
chain costing).<br />
Keywords: intellectual capital; human capital; structural capital; relational capital; management control <strong>and</strong><br />
accounting; strategic management accounting practices<br />
1. Introduction<br />
The organizational environment has recently suffered several changes. Among them are the<br />
globalization of business, the increased physical mobility (people <strong>and</strong> products) <strong>and</strong> financial (capital),<br />
the continuous innovation, the increased competition, the increased customer dem<strong>and</strong>s <strong>and</strong><br />
sophistication of information technologies <strong>and</strong> communication (Haldma <strong>and</strong> Lääts, 2002; Bukh et al.<br />
2005; Löfsten <strong>and</strong> Lindelöf, 2005; Cuganesan et al., 2007, Tayles et al., 2007; Ferreira, 2008).<br />
These changes have forced organizations to constantly change <strong>and</strong> adapt to their surroundings in<br />
order to maintain competitive positions. To this purpose, they have turned to new sources of value<br />
creation, including research <strong>and</strong> development, innovation, competence <strong>and</strong> employees skills,<br />
information technology, development of processes based on knowledge <strong>and</strong> the ability to attract <strong>and</strong><br />
retain business partners (Cañibano et al., 2000; Starovic <strong>and</strong> Marr, 2003; Zambon, 2003, RICARDIS,<br />
2006; García-Meca <strong>and</strong> Martinez, 2007).<br />
For while the traditional competitive advantages result from the collection <strong>and</strong> use of tangible<br />
resources, such as long-term heavy machinery, competitive advantages are now associated with<br />
intangible assets based on knowledge (Bontis, 2001; Widener, 2006; Cuganesan et al., 2007; Marr,<br />
2008).<br />
In the literature these resources based on knowledge, <strong>and</strong> of an intangible nature, are recognized by<br />
the name of intellectual capital (IC) (Starovic <strong>and</strong> Marr, 2003; Abeysekera <strong>and</strong> Guthrie, 2005;<br />
Abeysekera, 2006; Jørgensen, 2006; Beattie <strong>and</strong> Thomson, 2007; Tan et al., 2008; Cleary, 2009;<br />
Kasztler <strong>and</strong> Leitner, 2009). Thus, the term IC is the set of strategic resources such as knowledge,<br />
information, know-how, intellectual property, reputation of products <strong>and</strong> organization, <strong>and</strong> relations<br />
with business partners that contribute to the achievement of competitive advantages <strong>and</strong> to create<br />
sustainable value (Bukh et al., 2005; Cuganesan et al., 2007). Or, more simplistically, the IC<br />
represents all of the intangible assets of an organization (Cleary, 2009).<br />
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Several authors (Zambon, 2003; Abeysekera, 2006; Marr, 2008) therefore consider that the IC has<br />
become increasingly important for organizations since it represents the set of resources essential to<br />
achieve strategic competitive advantages <strong>and</strong> thus determinant in the creation of value <strong>and</strong> in the<br />
success of organizations. “Success <strong>and</strong> value creation of any organization in today’s economy is<br />
driven by intellectual capital” (Marr, 2008:29). It is therefore essential to identify, measure, manage,<br />
recognize <strong>and</strong> report IC. Since traditional accounting systems fail to recognize it (they just recognize<br />
some intangibles in the balance, so the book value of an organization tends to be different from its<br />
market value) (Cañibano et al., 2000; Cuganesan et al., 2007; Abeysekera, 2008), it is the MCA<br />
function to contribute to the identification, measurement, reporting <strong>and</strong> management of resources that<br />
constitute the IC (MERITUM, 2001; Daum, 2003; Marr, 2008).<br />
It is especially strategic management accounting role to analyze aspects related to the IC, since it<br />
mainly aims at providing information to support strategic decisions that enhance the achievement of<br />
competitive advantages, <strong>and</strong> these features contribute to this end (Tayles et al., 2002; Abeysekera,<br />
2006; Beattie <strong>and</strong> Thomson, 2007). However, there is little literature that relates MCA to the IC or to<br />
intangibles (Tayles et al., 2007). And “although IC <strong>and</strong> the measurement of IC by organizations has<br />
been an emerging area of substantial research interest, research efforts to date have led to mixed<br />
<strong>and</strong> inconclusive outcomes” (Shang <strong>and</strong> Lin, 2010:15)<br />
In this context, the main objective of this study is to underst<strong>and</strong> in general terms, the contributions of<br />
accounting <strong>and</strong> management control for measuring <strong>and</strong> managing IC, <strong>and</strong> specifically to identify the<br />
relationships between IC <strong>and</strong> SMAP. Thus, the specific objectives of this study are: addressing the<br />
definition of IC, identifying the main components of IC, underst<strong>and</strong> the role of MCA in the<br />
measurement <strong>and</strong> management of IC <strong>and</strong>, addressing the relationship between IC <strong>and</strong> SMAP.<br />
Nowadays IC resources are crucial <strong>and</strong> “it is a critical part in IC management to identify the required<br />
resources <strong>and</strong> select a suitable strategy to reduce resource gaps in response to the complicated <strong>and</strong><br />
changing environment” (Shang <strong>and</strong> Lin, 2010:16). Thus, while studying the relationship between MCA<br />
<strong>and</strong> IC, our study makes a contribution to the existing knowledge by offering some insights about how<br />
to make IC measurable through SMAP. In addition, the analysis of the relationship between SMAP<br />
<strong>and</strong> IC resources has novelty nature <strong>and</strong> contributes to a better strategic management of IC.<br />
Given the proposed objectives, this work is structured as follows: section 2 deals with the definition of<br />
IC <strong>and</strong> some models of IC measurement are discussed. The third section highlights the importance of<br />
MCA for the measurement <strong>and</strong> management of IC <strong>and</strong> the key tools identified in the literature as<br />
useful for measuring <strong>and</strong> managing IC. In the following section a connection is established between<br />
IC <strong>and</strong> SMAP. Finally, in section 5, we present the main findings, the limitations of the study <strong>and</strong><br />
some suggestions for future research.<br />
2. Intellectual capital<br />
According to Bontis (2001) the first use of the term “Intellectual Capital” is attributed to John Kenneth<br />
Galbraith, who in a letter to the economist Michael Kalecki in 1969 wrote: “I wonder if you realize how<br />
much those of us in the world around have owed to the intellectual capital you have provided over<br />
these past decades.”<br />
In general, the IC is recognized in the literature as a set of key resources for achieving competitive<br />
advantage <strong>and</strong> value creation in an era of globalization, constant technological changes <strong>and</strong><br />
processes based on knowledge (Widener, 2006; García-Mecca <strong>and</strong> Martinez, 2007). These strategic<br />
resources, intangible in nature are related to people <strong>and</strong> can be more or less dependent on them<br />
(RICARDIS, 2006). However there are various definitions of IC contained in many studies, <strong>and</strong> there<br />
is a lack of a st<strong>and</strong>ard definition of IC (Chong, 2008). In this context, <strong>and</strong> to underst<strong>and</strong> with some<br />
precision what constitutes IC, in this section, the definition <strong>and</strong> components of IC are discussed.<br />
2.1 Definition of intellectual capital<br />
The term IC is used in literature to represent a set of strategic assets, based on knowledge, with an<br />
intangible nature, (Abeysekera <strong>and</strong> Guthrie, 2005; Bukh et al., 2005; Abeysekera, 2006; Jørgensen,<br />
2006; RICARDIS, 2006; Ferreira, 2008; Tan et al., 2008; Cleary, 2009; Kasztler e Leitner, 2009).<br />
“Together with physical <strong>and</strong> financial capital, intellectual capital is one of the three vital resources of<br />
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organizations” (Marr, 2008:5). However, there is still no consensus on IC concept (Starovic <strong>and</strong> Marr,<br />
2003; Tayles et al., 2007; Abeysekera, 2008).<br />
The project MERITUM (2001) considers that IC represents all kinds of intangible assets either<br />
formally owned or used or informally established <strong>and</strong> mobilized. According to this project, the<br />
organization’s IC is more than the sum of human, structural <strong>and</strong> relational resources; IC is also about<br />
how these resources are used together to create value (Marr, 2008). Thus, this definition considers<br />
some important aspects. First <strong>and</strong> foremost IC consists of intangible assets (nonphysical).<br />
Additionally, IC resources do not have to be owned by the organization, being enough that they are<br />
used by it. For example, the human resources who are working for the company are not its property<br />
(Bontis, 2001). Finally, the definition presented in the project MERITUM (2001) establishes that IC is<br />
composed by three groups of resources (human, structural <strong>and</strong> relational) <strong>and</strong> argues that beyond the<br />
individual functioning of resources it is important that they operate as a whole (to the extent that the<br />
whole is worth more than the sum of its parts) (Marr, 2008).<br />
Based on MERITUM (2001), the project RICARDIS (2006) defines IC as the combination of human,<br />
organizational <strong>and</strong> relational resources, including intangible activities of an organization (Bontis,<br />
2001). It is here assumed that the IC includes the knowledge, competences, experience <strong>and</strong><br />
employees skills (human resources); the research <strong>and</strong> development activities, routines, procedures,<br />
the organization's systems <strong>and</strong> databases <strong>and</strong> intellectual property rights (activities <strong>and</strong> organizational<br />
resources); <strong>and</strong> resources related to external relations with customers, suppliers <strong>and</strong> partners in<br />
research <strong>and</strong> development (relational resources). It follows that the combination of intangible<br />
resources <strong>and</strong> activities allows an organization to transform a set of material, financial <strong>and</strong> human<br />
resources into a system capable of creating value for stakeholders (Bontis, 2001; Marr, 2008).It can<br />
be achieved when an adequate connection of the resources is established through appropriate<br />
intangible activities (MERITUM, 2002). In the project RICARDIS (2006) it is considered that for the<br />
intangibles to be considered part of the IC of an organization they have to be internalized in a lasting<br />
<strong>and</strong> efficient way <strong>and</strong>/or appropriated by the organization. This definition, which is a little more<br />
extensive than those presented in other studies, considers that the IC consists of several components<br />
(as will be outlined in the next section), <strong>and</strong> presents a set of illustrative examples of the IC. In<br />
addition, while analyzing this definition it appears that the IC is only part of the intangibles, as it<br />
indicates that only the intangibles that are internalized <strong>and</strong>/or appropriated by an organization belong<br />
to the IC.<br />
Other authors (Bukh et al., 2005; Cuganesan et al., 2007) present more specific definitions. However,<br />
these definitions, based on illustrative examples, have the disadvantage of not covering all resources<br />
that can be part of the IC. Bukh et al. (2005), for example, define IC as knowledge resources in the<br />
form of employees, customers, processes or technology that an organization can mobilize in its<br />
processes in order to create value.<br />
There is a diversity of IC definitions <strong>and</strong> the only common aspect in the definition of IC is related to<br />
the fact that the resources allow the creation of value <strong>and</strong> that the benefits are not extinguished in a<br />
given time (Abeysekera, 2006). In fact, these resources of strategic nature when identified <strong>and</strong><br />
properly managed enable the acquisition of competitive advantages <strong>and</strong> a sustainable creation of<br />
value (Ferreira, 2008). Beattie <strong>and</strong> Thomson (2007) even consider that IC is now recognized as a<br />
resource that contributes most to the market value of the organizations operating in industries based<br />
on knowledge.<br />
Apart from the lack of a consensus definition for IC, the terms "IC" <strong>and</strong> "intangibles" are still used in<br />
the literature, quite often, in an indifferent form (Beattie <strong>and</strong> Thomson, 2007). This may occur because<br />
the IC is studied in various fields of knowledge such as accounting, strategic management, <strong>and</strong><br />
human resources management, among others (Starovic <strong>and</strong> Marr, 2003).<br />
Thus, while in accounting research the term "intangibles" is generally used (MERITUM, 2001) in<br />
management research the term "IC" is more used. In this sense, Beattie <strong>and</strong> Thomson (2007)<br />
consider that the definitions of intangibles made by traditional accounting are limited as they only<br />
include items such as intellectual property <strong>and</strong> patents, which are recognized in the balance. So, the<br />
traditional concept of "intangible asset" refers to the set of intangibles or IC elements that may be<br />
recognized as assets in the current model of st<strong>and</strong>ard accounting (Starovic <strong>and</strong> Marr, 2003).<br />
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Therefore, intangibles such as relationships with customers or employees skills are excluded since<br />
these are resources that can’t be controlled by the company in an accounting sense (Marr, 2008).<br />
In this context, Beattie <strong>and</strong> Thomson (2007) argue the need for a thorough debate in order to<br />
st<strong>and</strong>ardize the definition of IC, which will build a more coherent body of theory (Abeysekera, 2006,<br />
2008). In a way, Krist<strong>and</strong>l <strong>and</strong> Bontis (2007) have already initiated this debate by building a common<br />
definition for IC <strong>and</strong> intangibles (<strong>using</strong> the definitions of studies in which intangibles <strong>and</strong> IC are used<br />
as synonyms), <strong>using</strong> the approach based on resources.<br />
As for the components of the IC it seems that there is a broad consensus about the existence of three<br />
main components (human capital, structural capital or internal, <strong>and</strong> external or relational capital)<br />
(Beattie <strong>and</strong> Thomson, 2007; Cuganesan et al., 2007, Tayles et al., 2007).<br />
2.2 Intellectual capital measurement<br />
Organizations try to create <strong>and</strong> recreate tools to measure the IC <strong>using</strong> for this purpose, several<br />
models of measurement. Some are more generic, since they are used by different organizations, <strong>and</strong><br />
others are more specific <strong>and</strong> are designed for a particular sector or organization (Bontis, 2001;<br />
MERITUM, 2001; Starovic <strong>and</strong> Marr, 2003).<br />
Accordingly, various models of IC measurement are reported <strong>and</strong> analyzed in the literature. Some<br />
more holistic <strong>and</strong> other more analytical, some money related <strong>and</strong> others not (Zambon, 2003). Among<br />
these instruments the Market-to-book Value, the Hidden Value, the Tobin’s Q, the Economic Value<br />
Added (EVA TM ), the Balanced Scorecard, the Sk<strong>and</strong>ia Navigator, the IC-Index, the Technology<br />
Broker, the Intangible Asset Monitor, the Value Added Intellectual Coefficient, <strong>and</strong> the Value Chain<br />
Scoreboard st<strong>and</strong> out (Mouritsen, 1998; Starovic <strong>and</strong> Marr, 2003; Tan et al., 2008). Measurement<br />
models such as the Market-to-Book Value, the Tobin's Q, EVA TM <strong>and</strong> the Hidden Value are more<br />
holistic <strong>and</strong> money related, while the Balanced Scorecard, the Sk<strong>and</strong>ia Navigator, the Intangible<br />
Asset Monitor <strong>and</strong> the Value Chain Scoreboard are more analytical (atomistic ) <strong>and</strong> non-monetary.<br />
The Technology Broker despite being an analytical model has monetary expression. The IC-Index, in<br />
turn, is a holistic model, non-monetary, <strong>and</strong> the Value Added Intellectual Coefficient is presented as a<br />
holistic model but with monetary <strong>and</strong> non-monetary expression (Zambon, 2003).<br />
While the Balanced Scorecard, the Sk<strong>and</strong>ia Navigator, the IC-Index, the Intangible Asset Monitor <strong>and</strong><br />
the Value Chain Scoreboard are instruments that use indicators (scoreboards) related to IC <strong>and</strong><br />
provide an alternative view of performance, the EVA TM <strong>and</strong> Value Added Intellectual Coefficient are<br />
related to the return on assets methods (ROA). Models such as the Market-to-Book Value, the Tobin's<br />
Q <strong>and</strong> the Hidden Value are related to the market capitalization methods <strong>and</strong> the Technology Broker,<br />
in turn, is a direct method of IC (Zambon, 2003; Ferreira, 2008).<br />
Some studies (Mouritsen, 1998, Tayles et al., 2007, Huang <strong>and</strong> Wang, 2008) analyze the use of<br />
these tools by organizations to measure <strong>and</strong> manage intangible assets. Interestingly, they conclude<br />
that tools developed for IC measurement are not always used in organizations with intensive IC <strong>and</strong>,<br />
sometimes, they do not respond adequately to the information needs (Huang <strong>and</strong> Wang, 2008). For<br />
example, Tayles et al. (2007) find that measures based on value, as for example EVA TM , are strongly<br />
associated with high levels of IC, while instruments such as the Intangible Asset Monitor <strong>and</strong> the<br />
Sk<strong>and</strong>ia Navigator (specific models of performance evaluation which are considered useful for<br />
evaluating the intangible resources) are not correlated with the IC degree. The authors also believe<br />
that it is important to use financial <strong>and</strong> non financial measures to capture the influence of intangible<br />
resources on organizational performance. This view is also shared by Daum (2003) <strong>and</strong> Marr (2008),<br />
who warn that the selected measures should take into account the organizational strategy <strong>and</strong> the<br />
value creation system. Usually, the non financial measures are more commonly associated with<br />
intangible assets (Starovic <strong>and</strong> Marr, 2003) <strong>and</strong> financial measures are more associated with physical<br />
resources, although financial measures also appear associated with intangible assets (Widener,<br />
2006).<br />
But beyond the IC measurement, it is essential to make its management. The identification <strong>and</strong> IC<br />
measurement without their proper IC management makes no sense (MERITUM, 2001). So, possible<br />
contributions of MCA for the IC management <strong>and</strong> measurement will be examined in the next section.<br />
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3. <strong>Management</strong> control <strong>and</strong> accounting<br />
The traditional accounting system does not consider information on IC (Zambon, 2003; Abeysekera<br />
<strong>and</strong> Guthrie, 2005; Widener, 2006; García-Meca <strong>and</strong> Martinez, 2007; Huang <strong>and</strong> Wang, 2008) nor<br />
shows in the balance sheet the value of various intangible assets (Cañibano et al., 2000). This is<br />
because there are several problems related to identification, measurement <strong>and</strong> recognition of IC<br />
elements as human resources, innovation, customers <strong>and</strong> technology (Bontis, 2001; García-Meca et<br />
al., 2005; Marr, 2008). For this reason, the traditional accounting does not comply, in the whole, the<br />
main aim of showing the true economic situation of an organization <strong>and</strong> financial statements lose<br />
some usefulness (Abeysekera, 2008; Huang <strong>and</strong> Wang, 2008). The restrictive accounting rules do not<br />
allow many of the intangibles to be recognized in financial statements, especially the internally<br />
generated intangibles (Starovic <strong>and</strong> Marr, 2003; Marr, 2008). Instead many of the costs associated<br />
with IC development are traced directly to costs <strong>and</strong> reflected in the income statement (Abeysekera,<br />
2008).<br />
In this sense, alternative forms are needed for the accounting treatment of IC resources (Cuganesan<br />
et al., 2007). Especially since this is a set of resources that allows us to obtain competitive advantage<br />
<strong>and</strong> sustainable value, intangible assets must be properly identified, measured <strong>and</strong> managed<br />
(MERITUM, 2001; Tayles et al., 2007). It is essential to make informed decisions, test <strong>and</strong> revise the<br />
organizational strategy, manage the risks associated with IC (Marr, 2008), to underst<strong>and</strong> how value is<br />
created for proper allocation of resources, <strong>and</strong> provide information on IC value so that investors can<br />
evaluate the potential of organizations (Daum, 2003; Starovic <strong>and</strong> Marr, 2003). In this context, several<br />
authors (Johanson et al., 2001; Mouritsen <strong>and</strong> Larsen, 2005; Widener, 2006, Tayles et al., 2007)<br />
consider that for the identification, measurement <strong>and</strong> management of IC, management control <strong>and</strong><br />
accounting (MCA) assumes a particular relevance. Tayles et al., (2002) also consider that SMAP may<br />
have an essential role in providing IC information to support decision-making. For strategic decisionmaking<br />
purposes managers need information related to the strategic resources that contribute to the<br />
creation of competitive advantages <strong>and</strong> sustainable value. In order to contribute to this goal,<br />
Johanson et al., (2001) <strong>and</strong> Mouritsen <strong>and</strong> Larsen (2005) find that the MCA system, sometimes<br />
through the adoption of SMAP, is adequate.<br />
In this context, the next section establishes a connection between SMAP <strong>and</strong> IC, demonstrating the<br />
SMAP contribution to the identification <strong>and</strong> management of some resources that form the IC.<br />
4. Strategic management accounting practices <strong>and</strong> intellectual capital<br />
In developing its activities organizations use intangible assets that are essential to achieve its<br />
strategic objectives <strong>and</strong> to create sustainable value (Widener, 2006). It is therefore essential to<br />
identify, first, the strategic objectives of an organization <strong>and</strong> then the intangible resources <strong>and</strong><br />
activities that affect these objectives, <strong>and</strong> finally to develop a set of monitoring activities <strong>and</strong><br />
management (MERITUM, 2001; Marr, 2008). According to Marr (2008:4) “identifying <strong>and</strong> managing<br />
the right intellectual capital is <strong>and</strong> will increasingly be the key differentiator between successful,<br />
mediocre, <strong>and</strong> failing enterprises”. Since the monitoring of these activities <strong>and</strong> the strategic<br />
management of intangible assets that make up the IC is necessary to supply <strong>and</strong> use of financial <strong>and</strong><br />
non financial information, related for example with customers <strong>and</strong> efficiency of operations (Bontis,<br />
2001; Starovic <strong>and</strong> Marr, 2003), the question that arises is whether the SMAP contribute to the<br />
identification <strong>and</strong> IC management.<br />
Tayles et al. (2002, 2007) consider that if the decision of having intensive IC is a strategic decision of<br />
an organization, the SMAP as tools to aid strategy can contribute to their management. This is<br />
because they can contribute to the provision of adequate information for the organizations to maintain<br />
or improve their resources <strong>and</strong> to carry out their activities in a suitable way.<br />
According to Guilding et al. (2000) <strong>and</strong> Cadez <strong>and</strong> Guilding (2008), SMAP provide the information<br />
oriented to strategy, oriented to future <strong>and</strong> on the outside of the organization, also including the<br />
provision of financial <strong>and</strong> non financial information. These authors, taking into account the work of<br />
Guilding et al. (2000) <strong>and</strong> Cravens <strong>and</strong> Guilding (2001) identify 16 SMAP which are classified into five<br />
categories: costing, planning, control <strong>and</strong> performance measurement, strategic decision making,<br />
competitors’ accounting, <strong>and</strong> customers' accounting.<br />
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The paper then presents in some detail SMAP (life cycle costing, quality costing, target costing, value<br />
chain costing, benchmarking, <strong>and</strong> competitor cost assessment, competitive position monitoring <strong>and</strong><br />
customer profitability analysis) with the purpose to identify possible links between these practices <strong>and</strong><br />
the resources that constitute the SMAP. Table 1 presents the SMAP identified <strong>and</strong> defined by Cadez<br />
<strong>and</strong> Guilding (2008) <strong>and</strong> the connection to some features of IC associated to them is established.<br />
Table 1: Strategic management accounting practices <strong>and</strong> intellectual capital<br />
Practice Definition IC Resources<br />
Attribute<br />
costing<br />
Life cycle<br />
costing<br />
It costs the product attributes that are appealing to<br />
customers. These attributes that are the subject of<br />
costing include variables of the product performance,<br />
reliability, repairs during the product assurance<br />
period, reliability of supply <strong>and</strong> after sales service.<br />
It evaluates the costs based on the phases of the<br />
lifecycle of the product or service, which are the<br />
design, introduction, growth, maturity, decline <strong>and</strong><br />
eventual ab<strong>and</strong>onment.<br />
Quality costing It considers that quality costs are associated with the<br />
creation, identification, <strong>and</strong> prevention <strong>and</strong><br />
remedying of faults.<br />
Target costing It is a practice used during the design process <strong>and</strong><br />
product design, which involves the cost estimate for<br />
a target by subtracting the profit margin from the<br />
market price. Subsequently, the product is projected<br />
to the determined cost taking into account the costs<br />
of engineering <strong>and</strong> marketing.<br />
Value chain<br />
costing<br />
It defines the allocation of costs for activities<br />
necessary to create, acquire, produce, sell <strong>and</strong><br />
provide services in respect of a product or service.<br />
Benchmarking It consists of a continuous <strong>and</strong> systematic process of<br />
comparing products, services <strong>and</strong> processes in order<br />
to identify best practices that lead to superior<br />
Integrated<br />
performance<br />
measurement<br />
Strategic<br />
costing<br />
Strategic<br />
pricing<br />
performance.<br />
Evaluation system of the performance usually<br />
focused on acquiring performance knowledge related<br />
to the requirements of customers, possibly including<br />
non financial measures. This system involves the<br />
monitoring of the critical factors to ensure customer<br />
satisfaction.<br />
It uses data related costs based on strategic <strong>and</strong><br />
marketing to identify <strong>and</strong> develop strategies that<br />
enhance the achievement of sustainable competitive<br />
advantages.<br />
It is the analysis of strategic factors in the process of<br />
setting prices. These factors include the reaction of<br />
competitors to price, elasticity, market growth, <strong>and</strong><br />
economies of scale <strong>and</strong> experience.<br />
Br<strong>and</strong> valuation It consists of the financial valuation of the br<strong>and</strong><br />
through the assessment of its strengths such as<br />
leadership, stability, market, internationalization, <strong>and</strong><br />
support trend, combined with historical results of the<br />
br<strong>and</strong>.<br />
Customer’s knowledge<br />
Customer’s assistance<br />
Customer’s satisfaction<br />
Trust in the organisation<br />
Innovation<br />
Research <strong>and</strong> development<br />
Relationship with customer<br />
Quality management <strong>and</strong><br />
improvement<br />
<strong>Management</strong> systems<br />
Customer’s satisfaction<br />
Capacity to innovate<br />
Structure <strong>and</strong> production<br />
processes<br />
Organizational flexibility<br />
Product functionality<br />
Customer’s satisfaction<br />
Marketing capacity<br />
Innovation<br />
Research <strong>and</strong> development<br />
Relationship with suppliers <strong>and</strong><br />
customers<br />
Competitiveness<br />
Functionality <strong>and</strong> product quality<br />
Internal processes<br />
Customer’s satisfaction<br />
Customer’s knowledge<br />
Customer’s satisfaction<br />
Strategy<br />
<strong>Management</strong> capacities<br />
Capacities <strong>and</strong> marketing<br />
activities<br />
Market intensity<br />
Competition in the market<br />
Experience of the organisation<br />
Br<strong>and</strong>s<br />
Market leadership<br />
Systems of information (historical<br />
results)<br />
Competitor cost It consists in providing regular estimates of the costs Capacity to develop estimates<br />
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Rui Alex<strong>and</strong>re Pires <strong>and</strong> Maria do Céu Gaspar Alves<br />
of competitors in order to permit know competitors<br />
investments, cost structure, <strong>and</strong> contribute to a more<br />
efficient competition.<br />
<strong>Management</strong> capacity<br />
Competitiveness<br />
Practice Definition IC Resources<br />
Competitive<br />
position<br />
monitoring<br />
Competitor<br />
performance<br />
appraisal<br />
Customer<br />
profitability<br />
analysis<br />
Lifetime<br />
customer<br />
profitability<br />
analysis<br />
Valuation of<br />
customers as<br />
assets<br />
5. Final remarks<br />
It analyzes the positions of competitors in the<br />
business sector through evaluation <strong>and</strong> monitoring of<br />
sales trends of competitors, market share, sales<br />
volume <strong>and</strong> costs, unit costs <strong>and</strong> return on sales.<br />
The information provided by this practice can serve<br />
as a basis for evaluating the marketing strategy of a<br />
competitor.<br />
It consists in the analysis of statements published by<br />
a competitor as part of the evaluation of the main<br />
sources of competitive advantages that belong to<br />
that competitor.<br />
It consists in the analysis of sales <strong>and</strong> costs that can<br />
be assigned to a specific customer in order to<br />
determine the outcome by customer.<br />
It considers the extension of the timeframe in the<br />
analysis of results by customers in order to foresee<br />
the following years. This practice therefore turns on<br />
the set of future revenue flows <strong>and</strong> costs involved in<br />
maintaining a specific client.<br />
It consists in determining the value of customers for<br />
the company. To determine this value we can, for<br />
instance, calculate the present value of future income<br />
flows accredited to a specific customer.<br />
Relationships with the competitors<br />
Strategy<br />
Research <strong>and</strong> development<br />
Patent<br />
Image <strong>and</strong> reputation<br />
Competitor’s knowledge<br />
Customer’s knowledge<br />
Relationships with customers<br />
Marketing activities<br />
Capacity to develop estimates<br />
Customer’s knowledge<br />
Customer’s knowledge<br />
Market knowledge<br />
Organizations today face new challenges related to globalization of businesses, increased<br />
competitiveness, <strong>and</strong> constant innovation, adoption of new technologies, increased customer<br />
dem<strong>and</strong>s <strong>and</strong> networking. In this context <strong>and</strong> in order to maintain its competitive position they have to<br />
tap into new sources of value creation, since the traditional sources of value related to tangible assets<br />
have lost some importance.<br />
The knowledge resources of intangible nature, within such circumstances are strategic assets that<br />
enable organizations to meet new challenges. These knowledge resources are recognized in the<br />
literature as IC <strong>and</strong>/or intangible. Through the analysis of some definitions it is proved that there is still<br />
no consensus as to what represents the IC. However, the authors agree that the resources that are<br />
part of the IC contribute to the achievement of competitive advantages <strong>and</strong> to create sustainable<br />
value. In literature there is also some consensus on the division of IC into three components: human<br />
IC, structural IC <strong>and</strong> relational IC.<br />
Regarding the contributions of accounting <strong>and</strong> management control for IC measurement <strong>and</strong><br />
management, it appears that the main usefulness of these systems relates to the provision of<br />
information about resources that are part of the IC to enable its management <strong>and</strong> exploitation to<br />
achieve competitive advantages <strong>and</strong> the creation of sustainable value. In this context, several tools<br />
are used to identify, measure, manage <strong>and</strong> report IC. In the particular case of SMAP, as practice<br />
oriented to strategy, the study suggests that these practices contribute to the identification <strong>and</strong><br />
management of some intangible assets such as innovation, research <strong>and</strong> development, production<br />
processes, management tools, customer satisfaction <strong>and</strong> analysis of relationships with customers,<br />
competitors <strong>and</strong> suppliers.<br />
Nowadays, it is a critical part in IC management to identify the required resources <strong>and</strong> select a<br />
suitable strategy to reduce resource gaps, thus, by studying the relationship between SMAP <strong>and</strong> IC<br />
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Rui Alex<strong>and</strong>re Pires <strong>and</strong> Maria do Céu Gaspar Alves<br />
resources, this study makes a contribution to the existing knowledge, has novelty nature <strong>and</strong>,<br />
contributes to a better strategic management of IC. This paper also extends previous literature by<br />
<strong>using</strong> a different approach in the study of IC.<br />
For the completion of this work it matters to draw attention to some limitations that should be taken<br />
into consideration. The main limitation is related to the limited review carried out, since all works of<br />
literature review <strong>and</strong> empirical studies were not thoroughly analyzed.Moreover the analyzed studies<br />
were not collected systematically over a period of time <strong>and</strong> there is the probability that some major<br />
work might have been left out.<br />
In this sense, this work results in some clues to future developments. The first task to be done is<br />
related to a deeper literature review that encompasses a set of reference journals in the accounting<br />
field, within a limited period of time, <strong>and</strong> that allows a relationship between the SMAP <strong>and</strong> IC. Another<br />
future development is linked to the achievement of an exploratory study, through case studies,<br />
allowing the identification of the intangible assets that are related <strong>and</strong> can be identified <strong>and</strong> managed,<br />
by different practices identified in the strategic management accounting literature by Cadez <strong>and</strong><br />
Guilding (2008). That said, a third development relates to the realization of a quantitative study, data<br />
collection through questionnaire, which permits the establishment of wider relations between the<br />
different SMAP <strong>and</strong> the resources that are part of IC.<br />
Acknowledgements<br />
The authors would like to thank the financial support from Portuguese Foundation for Science <strong>and</strong><br />
Technology (FCT – Fundação para a Ciência ea Tecnologia - Programa de Financiamento<br />
Plurianual das Unidades de I&D) <strong>and</strong> the Research Unit NECE – Núcleo de Estudos em Ciências<br />
Empresariais, University of Beira Interior, Portugal. The authors also thank the valuable comments<br />
<strong>and</strong> suggestions made by an anonymous reviewer on an earlier version of this paper.<br />
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Executive <strong>Information</strong> Systems (EIS) Implementation for<br />
Education <strong>Management</strong> – a Conceptual Framework<br />
Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
Universiti Kebangsaan Malaysia, Selangor Darul Ehsan, Malaysia<br />
rozila@ftsm.ukm.my<br />
siatus09@gmail.com<br />
Abstract: Education management is a social process to identify, maintain, stimulate <strong>and</strong> unite human resources<br />
<strong>and</strong> physical assets in a comprehensive way in order to meet educational aspirations. Education management of<br />
a country in general involves several layers of management that requires different types of information from<br />
various operational units. As the units are mainly scattered all around the country <strong>and</strong> managed individually, most<br />
education information are isolated <strong>and</strong> disintegrated. On the other h<strong>and</strong>, the strategic planning <strong>and</strong> direction for<br />
education has to be centralised where it originates from the authority body, namely the Ministry of Education<br />
(MOE). MOE is responsible for planning, managing <strong>and</strong> monitoring the administration of those units so that they<br />
align with the national educational goals. These tasks are not straightforward to accomplish for a huge business<br />
like education, especially when the information are not easily <strong>and</strong> readily accessed. Fortunately, information age<br />
offers computer technology <strong>and</strong> applications as a powerful means to assist people in managing their businesses.<br />
The issues of education management above can be resolved, for instance, by having an Executive <strong>Information</strong><br />
System (EIS). EIS is capable of not only retrieving <strong>and</strong> storing information in a repository, it can also consolidate<br />
isolated information <strong>and</strong> perform comparative analyses through its mapping <strong>and</strong> merging feature. This paper<br />
aims to discuss how EIS can be applied in education domain. A conceptual framework that consists of critical<br />
success factors <strong>and</strong> characteristics of EIS implementation, particularly for education management is included in<br />
the paper. The framework was proposed based on literature reviews as well as field study that uses Malaysia<br />
context as a case. The results indicate that EIS can become a potential <strong>and</strong> feasible solution for addressing<br />
education management issues. The framework can act as a guideline to education’s stakeholders for introducing<br />
<strong>and</strong> implementing EIS in managing their respective education businesses.<br />
Keywords: Executive <strong>Information</strong> System (EIS), EIS for education management, critical success factors of EIS<br />
1. Introduction<br />
Education management can be defined as a social process to identify, maintain, stimulate, <strong>and</strong><br />
consolidate resources to meet educational aspirations. It involves various top management tasks<br />
such as planning, arranging, managing, directing <strong>and</strong> controlling as well as acquiring co-operation<br />
from individuals involved in education. It is influenced by specific plans <strong>and</strong> policies that contain<br />
strategic formulation <strong>and</strong> directions for education business in a country.<br />
Education management is very critical to any nation as it determines the future of the young citizens.<br />
It involves various community levels <strong>and</strong> background, <strong>and</strong> its execution covers a wide range of<br />
geographical areas. Education in most countries comprises different types of operational units that<br />
are distributed all around the country. It normally has four distinct hierarchical levels; federal, state,<br />
district <strong>and</strong> school. The planning <strong>and</strong> direction is centralised where it originates from the federal<br />
authority body, namely the Ministry of Education (MOE). Besides planning, MOE is also responsible in<br />
managing <strong>and</strong> monitoring the administration of education business across units. MOE needs to<br />
monitor actions <strong>and</strong> status as well as coordinate measures <strong>and</strong> perform comparative analysis as a<br />
benchmark in measuring achievements in education. These tasks are not so straightforward to<br />
perform as the units are mainly scattered <strong>and</strong> managed individually. This is one of the reasons why<br />
most education information are isolated <strong>and</strong> disintegrated.<br />
In the era of information <strong>and</strong> communication technology (ICT), computer applications offer a powerful<br />
means to assist people in managing their businesses. The ability to asses a variety of information is<br />
an important asset for any organisation to improve productivity (Diez & Macintosh 2009). The<br />
management of an organisation only needs to know what information it requires. The technology in<br />
general has the capacity to get the information for them <strong>and</strong> maximise its use. The management later<br />
uses the information to make important decisions <strong>and</strong> establish new knowledge to improve the<br />
organisation’s services <strong>and</strong> performance. With ICT, these managerial tasks are very much feasible.<br />
One possible option is by having an Executive <strong>Information</strong> System (EIS).<br />
Executive <strong>Information</strong> System (EIS) is a specialised information system that allows executives to<br />
monitor the management of an organisation. EIS can also be used to support organisational planning<br />
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Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
where it assists in developing options <strong>and</strong> strategies for future actions for the organisation (Ikart<br />
2005). One interesting feature of EIS is it offers a method of merging <strong>and</strong> mapping information from<br />
various sources. This enables executives to view <strong>and</strong> analyse internal <strong>and</strong> external information as a<br />
whole. The issues of isolated <strong>and</strong> disintegrated education information mentioned above can perhaps<br />
be resolved by EIS through this feature. To become a successful EIS, its implementation should be<br />
carried out efficiently <strong>and</strong> effectively (Hoffer 2007). This situation raises a concern about the<br />
contributing factors that are necessary to ensure the success of EIS implementation for education<br />
management.<br />
The potential of EIS in supporting education management however has yet to be explored. This paper<br />
aims to discuss how EIS can be implemented <strong>and</strong> used for managing education matters. Critical<br />
success factors (CSF) <strong>and</strong> characteristics of EIS implementation for education management are<br />
included in the paper. Those elements were identified through literature reviews as well as field study<br />
that uses Malaysia context as a case. The field study involved several key players in EIS development<br />
projects, which was conducted by <strong>using</strong> semi-structured interviews. Based on these factors, the paper<br />
proposes a framework of EIS implementation for education management.<br />
This paper is organised as follows: Section 2 provides some background information on EIS <strong>and</strong> CSF.<br />
Section 3 elaborates the study that includes both reviews <strong>and</strong> field work. Section 4 discusses the<br />
findings <strong>and</strong> describes the proposed framework. Section 5 discusses how to apply the proposed<br />
framework. Finally, Section 6 concludes the paper with a summary of the main findings <strong>and</strong> future<br />
work.<br />
2. Background<br />
The integration of computer technology to information is seen as a strategic platform that can support<br />
a variety of management tasks. One instance of such integrations is Executive <strong>Information</strong> System<br />
(EIS). An Executive <strong>Information</strong> System (EIS) is a sophisticated information system that enables<br />
executives to plan, monitor <strong>and</strong> control business processes through computer technology. EIS has<br />
been introduced since 1970 <strong>and</strong> it is now widely used in almost every domain (Armine 2005). EIS<br />
improves the ability of decision makers to formulate solutions by providing access to internal <strong>and</strong><br />
external organisational information (Anita 2006). This enables executives to view a situation from<br />
different perspectives <strong>and</strong> thus formulate appropriate action strategies (McLeod 2007). Furthermore, it<br />
can help to develop the leadership credibility by assisting executives in developing options <strong>and</strong> action<br />
plans for future strategy by providing systematic information searching <strong>and</strong> retrieval features. EIS is<br />
able to not only capture <strong>and</strong> store information but also merge <strong>and</strong> map isolated data as well as<br />
generate comparative analysis. Besides being an information-based system, EIS also contains<br />
Business Intelligence (BI) elements (Rasmussen et al. 2009). BI offers the use of dashboard or<br />
scoreboard that allows executives to analyse a situation from several different viewpoints. As a high<br />
potential system, many studies investigated <strong>and</strong> discussed EIS. Some examples are summarised in<br />
Table 1 below.<br />
Table 1: Studies related to Executive <strong>Information</strong> Systems (EIS)<br />
Author Description<br />
Porrawatpreyakorn et al. (2009) <strong>Knowledge</strong> transfer in EIS development<br />
Nurul et al. (2008) Integration of extraction agent <strong>and</strong> profiling user agent in data<br />
management module of EIS development<br />
Arnott et al. (2007) Cultural fit factor in EIS implementation<br />
Hwang et al. (2007) EIS framework for petrochemical industry<br />
Ong et al. (2004) Agent-based approach in EIS database design model<br />
Waiman & Gilbert (2006) Meta database implementation for EIS data analysis<br />
Ikart (2005), Poon & Wagner (2001),<br />
Success factors of EIS implementation<br />
Armine (2005)<br />
Salmeron & Herrero (2005) AHP technique implementation on CSFs of EIS<br />
DeVries et al. (2004) Schematic faces to visual EIS output<br />
Bruce et al. (2003) EIS internal <strong>and</strong> external information<br />
Walters et al. (2003) <strong>Information</strong> sources to EIS for strategic decision making<br />
Azlinah (2001) Intelligent agent in EIS database management<br />
Liang & Mir<strong>and</strong>a (2001) Dashboard <strong>and</strong> scorecard approach on web-based EIS for public<br />
agency<br />
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Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
Relying on the technology solely cannot guarantee the implementation of EIS can be successful.<br />
Studies on EIS should focus on the contributing elements that can influence the success of EIS<br />
implementation (Ikart 2005). Those important success elements are known as Critical Success<br />
Factors (CSF) (Caralli 2004). CSF for EIS in essence is a set of elements that must be fulfilled by the<br />
activities involved in EIS implementation process (Salmeron & Herrero 2005). In other words, CSF is<br />
a relatively small number of significant elements that must go right for the process to succeed. As EIS<br />
supports business process, the fulfillment of CSF is necessary for not only the EIS implementation but<br />
also the organisation as a whole.<br />
Due to its importance, organisations from various domains including education continue to invest in<br />
EIS projects as a way to strengthen <strong>and</strong> improve the efficiency of their management. The ability of<br />
EIS to generate a variety of information <strong>and</strong> illustrates the performance of educational programmes to<br />
education managers has been seen as an advantage that can help in addressing issues in education<br />
management. The potential of EIS to support education management has not been fully explored.<br />
Moreover, studies on CSF for EIS in education domain are almost non-existent. This indicates that<br />
such studies must be established.<br />
3. The study<br />
The study described in this paper encompasses two phases: Phase 1 <strong>and</strong> Phase 2. Phase 1 involved<br />
the identification of CSF through literature reviews. On the other h<strong>and</strong>, Phase 2 concerned the<br />
identification <strong>and</strong> confirmation of CSF through a field work. The phases worked complementarily<br />
where the former provided the theoretical background whereas the latter confirmed the phenomenon<br />
from empirical perspective.<br />
The study aimed to answer the following questions:<br />
What are the necessary elements to ensure the success of EIS implementation for education<br />
management?<br />
How the elements identified in (i) can be categorised into several distinct critical success factors<br />
(CSF) for EIS?<br />
Based on the identified CSF in (ii), what would be the possible framework of EIS implementation<br />
for education management?<br />
Phase 1 was accomplished by reviewing previous studies concerning EIS implementation whereas<br />
Phase 2 employed a field study as the means to gather viewpoints from industrial EIS experts. The<br />
field study used semi-structured interviews with open-ended questions. The data gathered from both<br />
phases were analysed by <strong>using</strong> content analysis. In essence, content analysis is the systematic<br />
description of behaviour asking who, what, where, where <strong>and</strong> how questions within formulated orderly<br />
rules to limit the effects of analyst bias (Fraenkel & Wallen 2008). It normally describes the contents of<br />
interviews <strong>and</strong> related documents systematically (Krippendorff 2004). The approach was chosen as it<br />
analyses data in an organised way, which is particularly necessary for answering “what” <strong>and</strong> “how”<br />
questions. The important step in content analysis is the identification of categories that comprise a set<br />
of related elements. The categories are then used as the bases for the proposed framework. Figure 1<br />
illustrates the research design employed in this study.<br />
The following paragraphs describe briefly the process involved <strong>and</strong> the methodology used in each<br />
phase:<br />
3.1 Phase 1: Reviews<br />
The reviews were made on the published articles concerning the CSF for EIS implementation. The<br />
searching was done through online sources for both conference <strong>and</strong> journal articles that were<br />
published within fifteen years since 1996. The keywords used in the searching were “critical success<br />
factors” <strong>and</strong>/or “executive information system” as well as “education management”. A number of<br />
articles emerged but only five papers covered both CSF <strong>and</strong> EIS, which was the interest of the study:<br />
(Abdullah 1997; Bajwa et al. 1998; Srivihok 1999; Poon & Wagner 2001; Salmeron & Herrero 2005).<br />
These papers however discussed CSF for general EIS implementation, particularly for profit-based<br />
businesses. None of the articles investigated CSF for EIS implementation in education management<br />
context. This phase also involved the construction of questionnaire for the inteviews, which were<br />
formulated based on CSF themes proposed by Kaniklides & Kimbles (1995) <strong>and</strong> Salmeron & Herrero<br />
(2005).<br />
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Figure 1: Research design<br />
3.2 Phase 2: Field study<br />
Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
Phase 1<br />
Phase 2<br />
The main objective of the field study was to capture the necessary elements for a successful EIS<br />
implementation for education management. The field study was qualitative in nature where the data<br />
collection was accomplished through interviews <strong>and</strong> the analysis was mainly interpretive. The field<br />
study questions were constructed based on organisational-technological aspects, which were<br />
identified based on literature <strong>and</strong> document reviews. The sessions were conducted individually, one<br />
at a time within a period of three months. Each session took about two hours. Prior to execution, the<br />
validity <strong>and</strong> accuracy of the questions were reviewed by two EIS experts. As the study concerned<br />
education management <strong>and</strong> EIS, the subjects were selected based on their knowledge <strong>and</strong> familiarity<br />
on both aspects. There were four officers from the Ministry of Education (MOE) <strong>and</strong> one government<br />
agency officer participated in the study. Those officers were selected because they were involved in<br />
EIS projects at their respective organisations. Moreover, MOE officers can be considered as experts<br />
<strong>and</strong> stakeholders in education management. The selection was based on relevance (purposive)<br />
sampling <strong>and</strong> the number of participation was small. Nevertheless, the participation was seen as<br />
sufficient for a qualitative study. The participation was voluntary in order to adhere to the ethical<br />
policies. The participants were aware that the field study was intended for research purposes.<br />
4. Results <strong>and</strong> analysis<br />
The content analysis was used to identify common categories (CSF) of EIS implementation for<br />
education management from both literature <strong>and</strong> field study. The analysis started with a theory or<br />
relevant research findings as guidance for initial codes (Shieh & Shannon 2005). The analysis was<br />
supported by triangulation technique, which is one of the methods to confirm qualitative findings<br />
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Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
(Miles & Huberman 1994). The triangulation concerned about moving from case (field study) to crosscase<br />
(reviews) <strong>and</strong> vice-versa to determining how many items share similar characteristics. The<br />
analysis was a deductive directed approach where key categories of CSF were identified. On the<br />
other h<strong>and</strong>, each article <strong>and</strong> the outcome of each interview session were considered as a transcript<br />
respectively. The significant elements from those transcripts were analysed individually <strong>and</strong><br />
comprehensively through inductive approach. Later, these elements were compared across<br />
transcripts <strong>and</strong> grouped into a set of distinct categories. Any new element emerged from the<br />
transcripts was constantly compared with those already encountered until no new insights could be<br />
gained. Therefore, these steps were iterative. The analysis process was executed by <strong>using</strong> Nvivo<br />
software.<br />
From the analysis, four common categories were discovered: People, Process, Product <strong>and</strong><br />
Environment. Each category comprises several elements, as shown in Table 2. These categories are<br />
indeed CSF of EIS implementation for education management. People are human resources who are<br />
involved directly or indirectly in executing EIS implementation initiatives. Process is defined as<br />
activities performed during system development, including the upgrading or maintenance process.<br />
Product refers to artifacts that are used <strong>and</strong> produced by the process. Environment refers to<br />
organisational <strong>and</strong> managerial factors such as plan/policy, management practices as well as politics<br />
<strong>and</strong> culture.<br />
Table 2: CSF for education EIS development<br />
Factors Items Field<br />
study<br />
1 2 3 4 5<br />
People<br />
Executives / top management (managerial)<br />
Support <strong>and</strong> involvement<br />
Development team (operational)<br />
⁄ ⁄ ⁄ ⁄ ⁄<br />
Technical skills<br />
Education personnel (managerial <strong>and</strong> operational)<br />
⁄ ⁄ ⁄ ⁄ ⁄<br />
<strong>Information</strong> management<br />
⁄ ⁄<br />
Process<br />
Development activities (planning)<br />
Development methodology<br />
System requirements ⁄ ⁄ ⁄<br />
System maintenance<br />
Data extraction (execution)<br />
⁄ ⁄<br />
Periodically<br />
Adequate*<br />
⁄<br />
Correct ⁄ ⁄<br />
Updated ⁄<br />
Data management (execution)<br />
Data analysis (execution)*<br />
⁄<br />
Hardware <strong>and</strong> software infrastructure (planning) ⁄ ⁄ ⁄<br />
Product Integrated features, functions, etc. ⁄ ⁄ ⁄ ⁄ ⁄<br />
Environment<br />
Plan/Policy<br />
Education strategic plan*<br />
Key performance indicators (KPI) *<br />
St<strong>and</strong>ard Operating Procedure (SOP) *<br />
Project management<br />
<strong>Management</strong> best practices<br />
⁄<br />
Financial<br />
⁄<br />
System awareness ⁄ ⁄ ⁄<br />
IS sources<br />
Politics <strong>and</strong> culture<br />
⁄ ⁄ ⁄ ⁄<br />
Cooperation to information sharing<br />
⁄ ⁄ ⁄ ⁄<br />
Attitude towards projects ⁄ ⁄<br />
Organisation culture towards projects ⁄<br />
Note: 1 – Abdullah, 2 – Bajwa et al., 3 – Poon & Wagner, 4 – Salmeron & Herrero, 5 – Srivihok.<br />
The following paragraphs explain the interrelationships among the elements <strong>and</strong> factors identified<br />
above:<br />
To ensure successful EIS implementation for education management, management <strong>and</strong> operational<br />
personnel (people) have to be brought together into the planning <strong>and</strong> execution of the development<br />
424<br />
⁄<br />
⁄<br />
⁄<br />
⁄
Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
activities (process) to produce an integrated <strong>and</strong> collaborative EIS (product), which is supported by<br />
plan/policy/procedure, management best practices, reasonable politics <strong>and</strong> culture values<br />
(environment).<br />
The EIS players (executives, development team <strong>and</strong> educational personnel) must be given adequate<br />
support <strong>and</strong> commitment towards EIS initiatives. They should be given the authority to plan <strong>and</strong><br />
coordinate EIS implementation. This means they should be allowed to manage EIS implementation<br />
project attributes (financial, system awareness <strong>and</strong> IS sources). During the planning of EIS<br />
implementation, they certainly have to consider education KPI <strong>and</strong> KRA, organisation’s strategic plans<br />
<strong>and</strong> SOP as well as project management policies. A good plan can only be formulated if the<br />
information received during the planning is accurate <strong>and</strong> complete. This depends on the co-operation<br />
given by personnel <strong>and</strong> units in the organisation. This is difficult to accomplish unless the organisation<br />
imposes information sharing culture where every personnel is encouraged to share “what they know,<br />
have <strong>and</strong> need” with others across the units. Such an environment can be introduced if every<br />
personnel has right attitude <strong>and</strong> culture towards EIS <strong>and</strong> practises positive working values. The<br />
planning must also include software <strong>and</strong> hardware requirements (infrastructure) as well as the<br />
identification of suitable development methodology to be used including system requirements <strong>and</strong><br />
maintenance (development activities). During the execution of the project, those elements are used to<br />
develop EIS that integrates internal isolated information periodically (data integration module) so that<br />
the information is updated, adequate <strong>and</strong> correct to be used by executives in decision making<br />
process. The information is then organised properly for easy access (data management module).<br />
Besides information capturing <strong>and</strong> retrieving, EIS should also be able to perform comparative<br />
analyses <strong>and</strong> generate useful reports (data analysis module). This is achieved by mapping <strong>and</strong><br />
merging internal information with external information. As a result, an integrated <strong>and</strong> collaborative EIS<br />
can be produced for education users. The users encompass personnel from MOE, state <strong>and</strong> district<br />
education departments. Figure 2 below illustrates the proposed framework based on the elements<br />
discussed above.<br />
Figure 2: The proposed framework<br />
5. Applying the framework<br />
The framework may not be conclusive as it needs to be confirmed <strong>and</strong> refined further through other<br />
empirical settings. It however provides a conceptual overview of CSF for EIS implementation<br />
concerning education management. Education stakeholders <strong>and</strong> practitioners can use the framework<br />
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Rozilawati Razali <strong>and</strong> Mahamsiatus Kamaruddin<br />
as a guideline for the development of EIS for education management. They are now aware of the<br />
necessary CSF for a successful EIS implementation. To researchers, the framework triggers the<br />
needs to identify the suitable mechanism that can help practitioners in executing the implementation<br />
process.<br />
6. Conclusion <strong>and</strong> future work<br />
This paper discussed CSF of EIS implementation for educational management. The CSF has been<br />
identified through literature reviews as well as field study. The CSF includes people, process, product<br />
<strong>and</strong> environment aspects. Each of these factors comprises a set of related elements. The CSF <strong>and</strong><br />
their respective elements are integrated to form a conceptual framework of EIS implementation for<br />
educational management. The framework can act as a guideline to education’s stakeholders for<br />
introducing <strong>and</strong> implementing EIS in managing their respective education businesses. The proposed<br />
framework may not be conclusive. As the study focused on subjects at federal level, future studies<br />
should be conducted on subjects at other education units such as state <strong>and</strong> district. In addition, the<br />
elements in each CSF should be investigated more closely in order to underst<strong>and</strong> how they affect EIS<br />
development <strong>and</strong> influence each other.<br />
Acknowledgements<br />
The authors thank the respondents participated in the study. This work was funded by the Ministry of<br />
Education Malaysia.<br />
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Arnott, D., Jirachiefpattana, W., O’Donnell, P. (2007). “Executive information systems development in<br />
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427
The ISD Process as a Live Routine<br />
David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
University College Cork, Irel<strong>and</strong><br />
dsammon@afis.ucc.ie<br />
t.nagle@ucc.ie<br />
j.mcavoy@ucc.ie<br />
Abstract: The objective of this exploratory study is to view an ISD process as an organisational routine in an<br />
effort to identify the inefficiencies in the process. To meet this objective we present the findings from a sixteen<br />
month case study of an ISD organisation, examining the ISD process the starting point of which is the<br />
requirements elicitation (RE) phase. A variety of data gathering techniques are used across two phases of data<br />
collection. The case data is organised as a narrative network (NN) of the organisational routine (ISD process)<br />
allowing us to underst<strong>and</strong> the ISD process as a collection of functional events/narrative fragments, generated by<br />
the enactment of the organisational routine. The NN is showing itself to be a very powerful device to appreciate<br />
the knock-on impacts of vague <strong>and</strong> incomplete requirements (poor requirements elicitation) on downstream<br />
ISD process ’patterns of action’. In the findings of this research we generate an ‘ostensive’ rule that defines a<br />
valid sequence of action in the ISD process. As a case study, the methods <strong>and</strong> results provide a means of<br />
comparison to additional cases of ISD organisations.<br />
Keywords: routines, <strong>Information</strong> Systems Development (ISD), narrative network, case study<br />
1. Introduction<br />
<strong>Information</strong> Systems Development (ISD) organisations are faced with increasing dem<strong>and</strong>s to deliver<br />
high quality information systems more efficiently. However, irrespective of the strategies or<br />
methodologies adopted to organise an organisation’s ISD process, requirements elicitation (RE) still<br />
remains a critical phase, having significant impacts on software quality <strong>and</strong> costs (c.f. Chakraborty et<br />
al., 2010). In fact, it is widely reported that incomplete <strong>and</strong> inaccurate user requirements collection,<br />
during a RE phase, can lead to failed ISD projects (Mathiassen et al., 2007, Chakraborty et al., 2010)<br />
(Byrd et al., 1992).<br />
Invariably, organisations are continually looking to improve the process of [1] gathering <strong>and</strong><br />
documenting user requirements, <strong>and</strong> [2] developing solutions around what the customer<br />
wants. However, while there is a substantial body of knowledge around RE, enumerating factors,<br />
tools, <strong>and</strong> techniques focused on creating an effective RE process (c.f. Benbasat et al., 1987, Byrd et<br />
al., 1992, Mathiassen et al., 2007, Chakraborty et al., 2010); the intricacies of the process of RE have<br />
been under researched. Furthermore, as argued by (Chakraborty et al., 2010) there are very few<br />
studies examining how the social process associated with RE unfolds. However, ISD has been<br />
viewed as a ‘social process rather than a merely technical one’ (Hansen <strong>and</strong> Rennecker, 2010),<br />
p.450) enacted by various development team members (human actors) (e.g. project managers (PM),<br />
business analysts (BA), developers, testers, etc.). In an effort to address this paucity of research<br />
around viewing RE as a social process, we propose that the ISD process should be viewed as an<br />
‘organisational routine’ (c.f. Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008), the first phase of which is RE. Therefore,<br />
the objective of this exploratory research study is to view an ISD process as an organisational routine<br />
in an effort to identify the inefficiencies in the ISD process.<br />
The remainder of this paper is organised as follows. The next section describes organisational<br />
routines <strong>and</strong> the use of a narrative network (NN) to represent ‘live routines’. This is followed by a<br />
description of the research design. The case analysis is then presented where the ISD process is<br />
visualised as a NN <strong>and</strong> four ‘patterns of action’ are highlighted (reflecting the inefficiencies in the ISD<br />
process). The paper concludes with a rule to address the ISD process inefficiencies.<br />
2. Organisational routines<br />
Organisational routines are a foundation for underst<strong>and</strong>ing business processes <strong>and</strong> are defined as<br />
repetitive <strong>and</strong> recognisable ‘patterns of action’ carried out by multiple actors (Pentl<strong>and</strong> <strong>and</strong> Feldman,<br />
2007; 2008). The theory of organisational routines emphasises the participation of multiple actors<br />
(human <strong>and</strong> non-human) <strong>and</strong> ‘this is what distinguishes a routine as organisational rather than<br />
individual’ (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007p. 787). Indeed, if organisational routines are viewed as a<br />
‘generative system’, multiple human actors suggests multiplicity of perspective <strong>and</strong> underst<strong>and</strong>ing;<br />
therefore, different actions may be taken <strong>and</strong> different actors may be used (e.g. non-human –<br />
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computer-based artefacts) at various points in accomplishing the same routine (Pentl<strong>and</strong> <strong>and</strong><br />
Feldman, 2007; 2008). This view of organisational routines promotes the concept of ‘live routines’<br />
over ‘dead routines’, where ‘live routines’ involve people, who are capable of ‘learning from<br />
experience’ <strong>and</strong> ‘dead routines’ are artefacts that are ‘rigid, mundane, mindless’, <strong>and</strong> can be explicitly<br />
stored (c.f. Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008). Therefore, ‘live routines’ are not fixed patterns; they are<br />
‘generative systems’ that can produce ‘patterns of action’ based on local judgement <strong>and</strong> improvisation<br />
by actors.<br />
Any social system that satisfies the definition of an organisational routine must consist of two<br />
complementary aspects: the ‘ostensive’ <strong>and</strong> the ‘performative’ (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007; 2008).<br />
While the ‘ostensive’ aspect consists of the abstract, generalised underst<strong>and</strong>ings of the human actors<br />
regarding enacting a routine (a model of) <strong>and</strong> the steps involved in accomplishing the task (a model<br />
for), the ‘performative’ aspect consists of the concrete, specific performances/enactment of the routine<br />
(Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007). However, in the realities of an organisational environment, while<br />
“performances are often filled with improvisations – adjustments <strong>and</strong> variations that make it possible<br />
to get things done in diverse situations” (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007, p.787) there is a need for an<br />
effective representation of the ‘patterns of action’ that define the ‘performances’ of organisational<br />
routines.<br />
Within the context of this research study viewing the ISD process as an organisational routine has<br />
significant value, for example, irrespective of the methodology adopted for ISD there will always be an<br />
associated recognisable pattern of repetitive actions (e.g. requirements gathering, coding, testing) to<br />
be carried out by multiple actors (e.g. business analyst, developer, tester). However, while the<br />
‘ostensive’ aspects of the organisational routine may be captured in the design of the organisational<br />
artefact (e.g. the adopted ISD methodology), <strong>and</strong> while this may constrain the performances in some<br />
desirable way, it is the actual performances (‘performative’ aspects) inherent in the execution of the<br />
ISD process that are of most interest in an effort to underst<strong>and</strong> how the routine actually lives in the<br />
organisational environment.<br />
2.1 A narrative network of an organisational routine<br />
A narrative network (NN) is a new methodological device that provides ‘an explicit representation of<br />
an organisational routine as a pattern of action’ <strong>and</strong> provides ‘a way to describe patterns of action, as<br />
well as the actions’ (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008, p.244). The NN is an appropriate conceptual tool<br />
when examining ‘live routines’, where it is expected that different ‘patterns of action’ will emerge over<br />
time, therefore, the NN ensures a dynamic <strong>and</strong> longitudinal focus on organisational practices (c.f.<br />
Yeow <strong>and</strong> Faraj, 2011; Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008). The NN is founded on key principles emerging<br />
from a synthesis of research on: structuration theory, actor-network theory, <strong>and</strong> organisational<br />
routines (c.f. Yeow <strong>and</strong> Faraj, 2011; Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008).<br />
The NN is defined as “a collection of functional events related by their sequential occurrence in a<br />
story or set of stories” (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008, p.244). Therefore, the “functional event is the<br />
building block of a narrative; it is a fragment that advances the story” (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008,<br />
p.244). A functional event is similar to the structure of a simple sentence, two actors (human <strong>and</strong> nonhuman)<br />
connected by some action, ‘subject-verb-object’ <strong>and</strong> uncovers ‘important information about<br />
who does what’ (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008, p.244). In the context of this research study, typical<br />
functional events for an ISD process include: a customer requests a system, a business analyst<br />
gathers customer requirements, a developer writes code, <strong>and</strong> a tester evaluates the system.<br />
Therefore, the NN perspective represents the functional events (narrative fragments) of an<br />
organisational routine as ‘nodes’ in the network <strong>and</strong> the sequence of functional events as ‘ties’ in the<br />
network (c.f. Yeow <strong>and</strong> Faraj, 2011; Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008). As a result, the NN perspective<br />
facilitates the explicit ‘capture of actors, artefacts <strong>and</strong> actions as well as the process by which work is<br />
currently or potentially done’ (Yeow <strong>and</strong> Faraj, 2011). The NN perspective facilitates the examination<br />
of actual ‘patterns of action’ that emerge from the living routines <strong>and</strong> not just a limited view of<br />
expected/idealised patterns reflected in a process design (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008).<br />
Furthermore, the NN perspective facilitates foc<strong>using</strong> on the tasks that actors engage in when enacting<br />
a ‘live routine’ in all its variations, as opposed to just simply foc<strong>using</strong> on one version of the process<br />
<strong>and</strong> its decision points, as provided by process flowcharts (Yeow <strong>and</strong> Faraj, 2011).<br />
In the research design section we provide a commentary on how to construct the NN of the ISD<br />
process. Using a NN perspective to analyse an organisation’s ISD process, <strong>and</strong> the associated<br />
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internal interactions between the multiple human actors, will provide new insights through viewing the<br />
ISD process as a ‘live routine’. In the next section we now present the case study research design.<br />
3. Research design<br />
In the context of this research study, a ‘freshness in perspective’ (c.f. Eisenhardt, 1989 p.548) is<br />
required on the topic despite the fact that the ISD process <strong>and</strong> the associated methodologies<br />
themselves have received considerable attention in past research. Therefore, in light of the lack of<br />
theoretical maturity around the viewing an ISD process as an organisational routine, this exploratory<br />
research sought to build theory <strong>using</strong> a single instrumental case study design. While an ‘instrumental<br />
case study’ research strategy was adopted for this study, it allowed the researchers to pursue a deep<br />
underst<strong>and</strong>ing of an issue as a primary focus, while the ‘case itself was of secondary interest’ (Stake,<br />
2000). Therefore, to fulfil the objective of this research, studying a single instrumental case facilitated<br />
uncovering <strong>and</strong> teasing out the diverse organisational stories of those ‘living the case’ (Stake, 2000).<br />
See Table 1 for a detailed outline of the case study research protocol.<br />
3.1 Case study<br />
The objective of this exploratory study is to view an ISD process as an organisational routine in an<br />
effort to identify the inefficiencies in the ISD process. Considering the ISD process as an<br />
organisational routine, organised as a NN, will provide a fresh perspective to underst<strong>and</strong>ing an<br />
organisation’s ISD lifecycle. For this exploratory case study research, the organisation is referred to<br />
as DevCo. DevCo has established itself on the global market as a trusted service provider of webbased<br />
data management applications, serving a range of government, healthcare <strong>and</strong> private sector<br />
organisations. Coupling geographical location with specific segments of the ISD lifecycle, the<br />
organisations structure is defined as follows: (i) London (UK) – incorporates business analysis, project<br />
management <strong>and</strong> business development, (ii) Cork (Irel<strong>and</strong>) – incorporates call centre operations, after<br />
sales service <strong>and</strong> first line support, (iii) Moscow (Russia) - incorporates software development,<br />
technology infrastructure maintenance <strong>and</strong> software testing.<br />
DevCo values long term relationships with its clients, to meet <strong>and</strong> exceed their evolving expectations,<br />
which is evident in the long term contracts they hold with their clients. From a process perspective<br />
DevCo demonstrate continuing commitment to developing its software products to the highest quality<br />
st<strong>and</strong>ards (e.g. e-GIF (UK e-Government Interoperability Framework) st<strong>and</strong>ards of best practice,<br />
Royal National Institute of Blind People (RNIB) (See it Right st<strong>and</strong>ard) <strong>and</strong> W3C-WAI (up to AAA)<br />
usability st<strong>and</strong>ards). Furthermore, DevCo offices are certified to the ISO 27001 st<strong>and</strong>ard for<br />
information management <strong>and</strong> security by the British St<strong>and</strong>ards Institute (BSI), ensuring that all<br />
information h<strong>and</strong>led conforms to best practices in a highly secure <strong>and</strong> audited data management<br />
environment.<br />
Emerging from a strong organisational necessity, the research objective was in line with the CEO’s<br />
requirement for an external analysis of DevCo’s ISD lifecycle <strong>and</strong> his belief that it could be more<br />
efficient. As a result, this was the point of departure for the three person research team from which the<br />
case study research protocol was developed (see Table1).<br />
Table 1: Case study research protocol (after: (Kelliher, 2005)<br />
Research Activity Description<br />
Objective To identify the inefficiencies in an ISD process<br />
Approach Case Study (October 2009 – January 2011)<br />
Motivation CEO’s interest in achieving ISD process efficiencies.<br />
Case Selection Process A software development organisation where the CEO sought improvements in the<br />
ways of working<br />
Case Access A unique openness to share information <strong>and</strong> a willingness to make personnel<br />
available for the research, to the extent that operations were suspended for three<br />
days to enable workshops to be carried out<br />
Instrument The research team (three researchers) were the primary research instruments in<br />
the application of the data gathering techniques<br />
Boundary Device ISD lifecycle, the first phase of which is requirements elicitation (RE)<br />
Data Gathering On-site observations by research team; Semi-structured interviews; Round table<br />
Techniques<br />
Data Organisation &<br />
Analysis Techniques<br />
discussions; Intensive on-site workshops with global project team participants<br />
The NN perspective was used to organise the case data <strong>and</strong> facilitate the data<br />
reduction <strong>and</strong> analysis process to build a logical chain of evidence for the case.<br />
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David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
3.2 Data gathering, organisation <strong>and</strong> analysis<br />
The sixteen month exploratory research project was broken into two phases for the purposes of data<br />
gathering. The data gathering was conducted over a seven month period (October-April) <strong>using</strong> a<br />
variety of techniques, as presented in Table 1. Table 2 now presents that data gathering conducted in<br />
chronological order. In total, 25 hours of interview data recorded, <strong>and</strong> 24 hours of workshop data<br />
recorded across the three workshops.<br />
Table 2: Chronology of data gathering<br />
Phase/Date Technique Focus<br />
1/October- Interviewing / Round Preliminary group-based interviews/discussions on organisational<br />
December Table Discussion<br />
requirements<br />
2/March-<br />
workshops with participants organised around ISD process for core<br />
On-Site Workshop<br />
April<br />
organisational projects<br />
2/March- Interviewing /<br />
Interviews with BAs/PMs/developers around assessment of<br />
April Observation<br />
communication tool effectiveness within ISD process<br />
Phase 1 data gathering involved preliminary group based interviews <strong>and</strong> discussions that provided a<br />
detailed background description of the organisation <strong>and</strong> its ISD process at a high level. Following on,<br />
Phase 2 of the research strategy set out to provide qualitative richness <strong>and</strong> to develop a deeper<br />
underst<strong>and</strong>ing of the organisation’s ISD process. In particular, after phase 1, themes were identified<br />
from the preliminary group-based interviews/discussions <strong>and</strong> areas of interest were highlighted. This<br />
provided the research team with the opportunity to focus their attentions for phase 2 data gathering. It<br />
was important that phase 2 data gathering was effective as the organisation made a significant<br />
commitment to the research both financially <strong>and</strong> in terms of disruption to operations during the three<br />
workshops. Two of the workshops took place in Moscow (Russia) <strong>and</strong> employees from the London<br />
(UK) <strong>and</strong> Cork (Irel<strong>and</strong>) offices were also made available for participation over a three day period. The<br />
third workshop took place in Cork (Irel<strong>and</strong>) <strong>and</strong> several London (UK) employees were also made<br />
available for participation.<br />
Furthermore, phase 2 data gathering workshops were organised around the projects which defined<br />
the fabric of the ISD organisation to date. For the most part these projects are revenue generating for<br />
external customers (predominantly long-term public sector contracts), with a growing number of<br />
internal customer projects initiated in more recent years – to introduce efficiencies through technology<br />
enhanced processing. Workshop participants were challenged on aspects of requirements elicitation<br />
(RE), development, test <strong>and</strong> release activities currently undertaken by various organisational actors<br />
as part of the existing ISD process execution. Also, due to the globally distributed nature of the<br />
organisation, attention was focused on the effectiveness of the communication tools used (specifically<br />
by business analysts/project managers <strong>and</strong> developers in the absence of face-to-face<br />
communication) in support of various activities in the ISD process.<br />
Analysing the data collected in phase 2, the case data is organised as a narrative network (NN) of the<br />
organisational routine, which provides an insight into the ‘patterns of action’ (c.f. Pentl<strong>and</strong> <strong>and</strong><br />
Feldman, 2008) that define the ISD process. The steps associated with constructing a NN are now<br />
presented in Table 3.<br />
Table 3: Construction of a narrative network (after: Pentl<strong>and</strong> <strong>and</strong> Feldman, 2008)<br />
Step Description This Research Study<br />
1. define boundary<br />
of focal<br />
phenomenon<br />
2. choose a point of<br />
view<br />
3. collect narratives<br />
<strong>and</strong> code the<br />
fragments<br />
4. relate codes by<br />
sequence<br />
The NN is defined by a generic storyline that defines some<br />
sphere of activity. Organisational research uses purpose as an<br />
important part of a boundary.<br />
Fieldwork data will contain data from someone’s point of view,<br />
so we never know the whole story. The researcher can pick a<br />
single point of view or aggregate several different ones.<br />
Gather data <strong>using</strong> methods that seem appropriate to ensure<br />
that narrative fragments are complete <strong>and</strong> that the researcher<br />
can uncover the connections that informants are making<br />
Narrative fragments need to be related in ordered sequence –<br />
a ‘what happens next’?<br />
431<br />
ISD process<br />
Aggregate of views<br />
from BAs/PMs,<br />
developers, testers<br />
Face-to-Face<br />
Interviews; Intensive<br />
Workshops;<br />
Observation<br />
All events were<br />
connected in<br />
sequence
4. Case analysis<br />
David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
In this section, for the purposes of clarity, we present one aggregated ‘performance’ (c.f. Pentl<strong>and</strong> <strong>and</strong><br />
Feldman, 2008) of the functional events associated with the organisational routine (ISD process). It is<br />
worth noting that for the purposes of this paper, we are documenting what can be<br />
considered the ‘worst-case scenario’ within the ISD process. It is not to say that these<br />
’patterns of action’ always occur within DevCo but they do at times define the fabric of the<br />
organisation’s approach to the ISD process <strong>and</strong> by the organisation’s own admission are<br />
unacceptable <strong>and</strong> need to be changed. The NN is now presented in the next section.<br />
4.1 A narrative network of the ISD process<br />
For the purposes of this paper we are interested in representing the ’patterns of action’ of the DevCo<br />
personnel for the requirements elicitation (RE) <strong>and</strong> development efforts only. Therefore, we have<br />
excluded representing ISD testing for simplicity. The NN is illustrated in Figure 1, while Table 4<br />
contains a list of the functional events/narrative fragments associated with the ISD process.<br />
Figure 1: Narrative network of the ISD process<br />
Table 4: Functional events (narrative fragments) of the ISD process<br />
NN Label Functional Event/Narrative Fragment<br />
ISD1 BAs/PMs gather customer requirements<br />
ISD2 BAs/PMs create tickets (requirements) with a ‘pending status’ on in-house ticketing system<br />
ISD3 Lead developers spend time cleaning the specification (tickets) with BAs/PMs<br />
ISD4<br />
Lead developers flag incomplete requirements with ‘in discussion’ status on in-house ticketing<br />
system<br />
ISD5 Lead developers assign tickets to developers<br />
ISD6 Developers conduct technical research on requirements<br />
ISD7 Developers seek clarification on tickets (requirements) from lead developers<br />
ISD8 Lead developers clarify issues for developers<br />
ISD9 Lead developers seek clarification of issues from BAs/PMs<br />
ISD10 BAs/PMs clarify issues for lead developers<br />
ISD11 Developers write code based on requirements<br />
ISD12 Developers email BAs/PMs about ‘in discussion’ status tickets<br />
ISD13 BAs/PMs send requirements clarifications by email to developers<br />
As can be seen in Figure 1, the ISD process (organisational routine) begins with the BAs/PMs in the<br />
London office gathering the customer requirements (ISD1) <strong>and</strong> structuring the ISD project<br />
requirements as a set of tickets on the in-house ticketing system (ISD2). The lead developers in the<br />
Moscow office then clean the requirements specification with the BAs/PMs (ISD3) <strong>and</strong> categorise<br />
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David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
some of the tickets, that have incomplete/vague requirements, with an ’in discussion’ status (ISD4). At<br />
this point the lead developers assign the ’high priority’ fully specified requirements to developers<br />
(ISD5). The developers then undertake research on the technical aspects required to fulfil each<br />
requirement (ISD6) <strong>and</strong> in 100% of all requirements the developers seek some form of<br />
simple/complex clarification for the lead developers (ISD7). Depending on the nature of the<br />
clarification being sought, lead developers either provide the information to the developers directly<br />
(ISD8) at which time the developers then write code based on the requirement (ISD11), or the lead<br />
developers seek clarification on the issues from the BAs in the London office (ISD9). When the<br />
BAs/PMs provide clarification on the issues (ISD10), the lead developers pass the information onto<br />
the developers (ISD8), at which time the developers either commence writing code (ISD11) or<br />
undertake technical research (ISD6) before coding the requirement (ISD11).<br />
As time progresses through the release of the project (a release usually lasting 3 months on average<br />
for most projects) some of the ’in discussion’ status tickets remain incomplete <strong>and</strong> the developers<br />
email the BAs/PMs for clarification on these requirements (ISD12) in an effort to complete the release<br />
on time. This necessitates the BAs/PMs to urgently gather requirements from the customer (ISD1)<br />
<strong>and</strong> once the required information is gathered the BAs/PMs send the updates by email to the<br />
developers (ISD13) to complete the release. On receipt of this requirements clarification information,<br />
the developers undertake further technical research (ISD6) before coding the requirement (ISD11).<br />
4.2 The ISD process inefficiencies as ‘patterns of action’<br />
Based on the storytelling of the organisational actors (PMs/BAs/lead developers/developers) <strong>and</strong><br />
appreciating the narrative fragments generated from their representation of the ISD process (see<br />
Figure 1), four defining ’patterns of action’ emerged which represented a macro perspective on the<br />
functional events of the ISD process. The four ’patterns of action’ were referred to as: BA/PM<br />
Helplessness, Awaiting Communication, Buffer Time Erosion, <strong>and</strong> Pressure Cooker Development by<br />
DevCo personnel. Table 5 provides detail of the narrative fragments from Table 4 associated with<br />
each of the four ’patterns of action’.<br />
Table 5: ISD process ‘patterns of action’<br />
Functional Event/Narrative Fragment Pattern of Action<br />
ISD1 ISD2 ISD3 ISD4 BA/PM Helplessness<br />
ISD4 ISD12 / ISD7 ISD8 / ISD7 ISD9 ISD10 Awaiting Communication<br />
ISD12 ISD1 ISD13 Buffer Time Erosion<br />
ISD13 ISD6 ISD11 Pressure Cooker Development<br />
4.2.1 ‘BA/PM helplessness’ pattern of action<br />
Within DevCo the BAs <strong>and</strong> PMs, based in the London office, are the first points of contact with their<br />
customers. Therefore, the BAs/PMs are responsible for gathering the system requirements from these<br />
end-users; however, managing these customers is a problem for the BAs/PMs <strong>and</strong> as one PM<br />
described the situation “we often feel helpless when determining the requirements of the customer”.<br />
Based on our analysis it is obvious that this sense of helplessness comes from the customers’ lack of<br />
appreciation of the immediate nature of requirements elicitation (RE) as part of an efficient ISD<br />
process. However, this lack of immediacy is linked to the organisation’s willingness to accommodate<br />
the customer <strong>and</strong> the nature of the customer themselves. While this willingness is a unique selling<br />
point for DevCo, in the market for attracting <strong>and</strong> retaining business, it is the root cause of<br />
inefficiencies to their internal downstream ISD processes, due to the fact that the RE process cannot<br />
be completed in an expeditious fashion <strong>and</strong> with the required completeness of information.<br />
As can be seen from the narrative fragments in Table 5, the defining characteristic of the ’BA/PM<br />
Helplessness’ pattern of action, worryingly, is the fact that the RE process ends up with high priority<br />
requirements ’in discussion’ due to incompleteness (ISD4). Therefore, DevCo often find that they are<br />
commencing the development of the customer solution with incomplete, vague <strong>and</strong> in some cases<br />
missing system requirements; where some of the missing requirements are identified later in the ISD<br />
process as being extremely critical to the functionality of the system overall. These incomplete, vague<br />
<strong>and</strong> missing requirements create what is referred to as the ‘Awaiting Communication’ pattern of<br />
action.<br />
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4.2.2 ‘Awaiting communication’ pattern of action<br />
David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
Three differing ’Awaiting Communication’ patterns of action are observed within the DevCo ISD<br />
process, caused directly by the ineffective RE process (see Table 5). Two of the patterns of action<br />
(ISD7 ISD8 / ISD7 ISD9 ISD10) ca<strong>using</strong> inefficiency relate directly to the way in which<br />
customer requirements are communicated to the developers, by the BA/PM, <strong>using</strong> their in-house<br />
ticketing system. It emerged during the case that BAs/PMs document requirements by going into a<br />
level of overcomplicated technical detail that is not required by the developers. As suggested by one<br />
of the developers “we want to know what to do, not how to do it, therefore, the BA should better define<br />
the problem, not the solution”. In one extreme case an example was made of a requirements ticket<br />
where four to five years of data history was captured but contained ‘zero useful information for the<br />
developers’. This scenario has led to a situation where developers seek clarification, within their office<br />
or externally from the BA/PM, on 100% of requirements captured on the ticketing system for a project<br />
release. This excess clarification is a waste of time for both developers <strong>and</strong> BAs/PMs themselves <strong>and</strong><br />
links directly to the ineffective representation of the customer requirements by the BA/PM in the first<br />
instance, not to mention if the requirements are also vague/incomplete.<br />
The remaining <strong>and</strong> most challenging of the ’Awaiting Communication’ patterns of action (ISD4 <br />
ISD12) triggers what developers (Moscow office) refer to as the ‘fire-fighting stage’ <strong>and</strong> relates to the<br />
number of vague/incomplete requirements remaining to be developed at the end of a project release<br />
to the customer. The key point of this example is the fact that these requirements are considered ‘high<br />
priority’ for the release by the BA/PM <strong>and</strong> the customer, but remain incomplete in terms of<br />
specification. Based, on our analysis, it is the developers who flag the existence of these<br />
vague/incomplete requirements to the BA/PM coming toward the end of the release. This creates<br />
what is referred to as ‘Buffer Time Erosion’ pattern of action by the BAs/PMs.<br />
4.2.3 ‘Buffer time erosion’ pattern of action<br />
From the BA/PM perspective the term ‘Buffer Time Erosion’ suggests that the end of the release is<br />
close for the specific project <strong>and</strong> as one PM suggests “the developers have nothing to do on the<br />
project <strong>and</strong> are awaiting responses on the high priority requirements that are still vague/incomplete in<br />
terms of specification”. It is important to note that the incompleteness of the requirements is a BA/PM<br />
problem <strong>and</strong> dem<strong>and</strong>s an additional execution of the RE process by the BAs/PMs. Therefore, the<br />
BA/PM gets the customer to provide a complete specification for the outst<strong>and</strong>ing requirements <strong>and</strong><br />
passes the details to the developers in the Moscow office. As a result, an ineffective RE process at<br />
the outset of the release (the ’BA/PM Helplessness’ pattern of action) creates the ‘Buffer Time<br />
Erosion’ pattern of action at a later stage in the release (ISD process) requiring a further attempt at<br />
RE by the BA/PM. However, this revisited completion of the specification of requirements triggers the<br />
’Pressure Cooker Development’ pattern of action.<br />
4.2.4 ‘Pressure cooker development’ pattern of action<br />
The ’Pressure Cooker Development’ pattern of action (ISD13 ISD6 ISD11) exists due to the<br />
incorporation of vague/incomplete requirements into an existing system release which will need to be<br />
researched by developers, prior to writing the code, to avoid technical inconsistencies with existing<br />
functionality. As a result, the collective development workload required by developers to complete the<br />
release is greater than the time period remaining (see example in ’Awaiting Communication’ pattern of<br />
action). Therefore, in an effort to complete the project release for the customer, additional developers<br />
may need to be seconded to the development efforts to ensure that the release date is not missed. It<br />
was reported by developers that this has an impact on the progress made in other projects at that<br />
point in time but is a necessary step to ensure customer satisfaction in terms of the delivery of<br />
expected functionality. Other issues are caused by this reassignment of developers but they are<br />
beyond the scope of what is being specifically addressed in this paper; for example, the late testing of<br />
the functionality contained in the release.<br />
5. Summary: ISD as a ‘live routine’<br />
Based on our observations <strong>and</strong> analysis it is obvious that DevCo need a more efficient ISD process.<br />
Therefore, the ‘performative’ aspect of the organisational routine needs to be improved without<br />
constraining the enactment of the routine. A set of rules could be suggested to model a partial<br />
representation of the ‘ostensive’ aspect of the organisational routine (ISD process) in an effort to<br />
express a “potentially infinite set of performances with a finite set of rules” (Pentl<strong>and</strong> et al., 2010),<br />
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David Sammon, Tadhg Nagle <strong>and</strong> John McAvoy<br />
p.929). It is worth reiterating that the ‘ostensive’ aspect of a routine is a ‘generative resource’ where<br />
actors ‘draw on their underst<strong>and</strong>ing of a routine to reproduce it, to plan, guide, <strong>and</strong> account for their<br />
actions with respect to the routine’ (Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007, p.787). This is similar to the<br />
concept of sense making (c.f. (Weick et al., 1999) where the ‘ostensive’ aspects of routines allow<br />
actors to recognise <strong>and</strong> organise diverse parts of a performance (story) as a coherent whole (c.f.<br />
Pentl<strong>and</strong> <strong>and</strong> Feldman, 2007).<br />
Table 6: Ostensive rule to address ISD process inefficiencies<br />
Pattern of Action Process Inefficiency Ostensive Rule<br />
BA/PM Helplessness<br />
Awaiting Communication<br />
Buffer Time Erosion<br />
Pressure Cooker<br />
Development<br />
‘High priority’ customer requirements are not<br />
completely specified by BAs/PMs<br />
Developers seek clarification on ‘high priority’<br />
customer requirements<br />
BAs/PMs return to customer to gather ‘high<br />
priority’ requirements before eminent end of<br />
release<br />
Developers work under pressure to complete<br />
‘high priority’ requirements for customer release<br />
Every customer requirement<br />
that is gathered, if of a ‘high<br />
priority’, should be<br />
completely specified<br />
regarding ‘what the customer<br />
wants’ - otherwise its priority<br />
is dropped until complete<br />
specification is available<br />
In the context of our exploratory case study research a rule could be suggested that defines a valid<br />
sequence of action in the ISD process. However, it is important to appreciate that for whatever reason<br />
this hypothesised rule (see Table 6), no matter how simple, will not always be attainable in practice.<br />
Therefore, while a future failure to completely specify requirements could be generated by<br />
expedience, time pressure, customer uncertainty, etc., the organisational actors may be more<br />
equipped to appreciate the implications of such a failure <strong>and</strong> the improvisations that are needed to be<br />
made as a result of having a partial representation of the ‘ostensive’ aspect of the organisational<br />
routine (ISD process). While we have suggested generating a rule, that defines a valid sequence of<br />
action in the ISD process, it is not suggested as imposing structure on the ‘performative’ aspect of the<br />
organisational routine, but more to highlight the ‘ostensive’ aspect. As argued by (Fiol <strong>and</strong> O'Connor,<br />
2003) actions can become routinised if excessively governed by rules <strong>and</strong> procedures, while more<br />
room can be allowed for individual discretion if structures are less specified, allowing for a more fluid,<br />
flexible, <strong>and</strong> adaptive performance (‘performative’ aspect of the organisational routine).<br />
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For Patterns Of Action. <strong>Information</strong> And Organization, 18, 235-250.<br />
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Action. Organization Studies, 31, 917-940.<br />
Stake, R. E. (Ed.) 2000. Case Studies, London: Sage.<br />
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435
Using Geographic <strong>Information</strong> to Assess Urban<br />
Environmental Indicators in the City of Lisbon<br />
Teresa Santos, Ségio Freire <strong>and</strong> José António Tenedório<br />
e-GEO, FCSH, Universidade Nova de Lisboa, Portugal<br />
teresasantos@fcsh.unl.pt<br />
sfreire@fcsh.unl.pt<br />
ja.tenedorio@fcsh.unl.pt<br />
Abstract: Cities are complex <strong>and</strong> dynamic systems that reproduce the interactions between socio-economic <strong>and</strong><br />
environmental processes at a local <strong>and</strong> global scale. This complexity constitutes a significant challenge for urban<br />
planning. One effective source of information about the urban environment is remote sensing data. Sealed<br />
surfaces generate intense rainwater run-off which the drainage network cannot accommodate, thus promoting<br />
flooding events. Mapping urban flood risk implies knowing the spatial distribution <strong>and</strong> extent of the pervious <strong>and</strong><br />
impervious areas in the city. These are important variables for planning, mitigation, preparedness <strong>and</strong> response<br />
to potential events. Green areas are an important l<strong>and</strong> use in urban areas, performing relevant environment<br />
functions, such as improving urban climate, reducing atmospheric pollution, providing amenities, aesthetical<br />
benefits <strong>and</strong> a good environment for urban populations. However, the urbanization process generally occurs at<br />
the expense of agricultural or forested areas, thus contributing to degrade the urban environment quality. The<br />
present case study addresses the quantification of impervious l<strong>and</strong> at the city scale through remote sensing data.<br />
A methodology for generating a large-scale L<strong>and</strong> Cover Map for the city of Lisbon, Portugal is proposed. The<br />
data source is Very-High Resolution (VHR) IKONOS pansharp image, from 2008, with a spatial resolution of 1 m,<br />
<strong>and</strong> a normalized Digital Surface Model (nDSM) from 2006. The methodology was based on the object-based<br />
extraction of features of interest, namely: vegetation, soil <strong>and</strong> impervious surfaces. After deriving the l<strong>and</strong> cover<br />
information from remote sensing data, several applications can be implemented. Indicators on l<strong>and</strong> sealing area,<br />
quantification of green area, or the available vacant soil in the city, are ecological measures that can be used as<br />
tools for cities to assess <strong>and</strong> communicate different environmental risks, <strong>and</strong> promote strategies <strong>and</strong> measures of<br />
sustainable urban development <strong>and</strong> disaster risk management. It is demonstrated that <strong>using</strong> a methodology<br />
based on large-scale geographic information, quick updating of detailed l<strong>and</strong> cover information is possible <strong>and</strong><br />
can be used to support decisions in a crisis situation where official maps are generally outdated, or to evaluate<br />
the quality of the urban environment.<br />
Keywords: very-high resolution satellite image, impervious mapping, soil sealing, Lisbon, IKONOS, LiDAR<br />
1. Introduction<br />
Regular updates of l<strong>and</strong> cover status <strong>and</strong> l<strong>and</strong> cover condition are required to improve our<br />
underst<strong>and</strong>ing of nearly every aspect of the changing environment, including fluxes of water, carbon<br />
dioxide <strong>and</strong> other trace gases, changing coastlines <strong>and</strong> their influence on marine resources,<br />
biodiversity, l<strong>and</strong> <strong>and</strong> soil resources use intensity, or urban patterns of environmental significance<br />
(CEOS 2010). The present study demonstrates that automatic classification of remote sensing data<br />
allows creating spatial knowledge, which can be implemented to support decision-making, identifying<br />
major areas for policy intervention. Integrated environmental information based on urban indicators<br />
allows for policy monitoring <strong>and</strong> evaluation.<br />
L<strong>and</strong> impermeabilization is a direct result of urban development. The occurrence of surfaces<br />
impenetrable by water like roads, buildings or sidewalks, induces changes on the natural environment<br />
like the decrease in water quality, fish\animal populations or groundwater reserves, <strong>and</strong> increase in<br />
habitat fragmentation, flooding events or urban heat isl<strong>and</strong> effects. Consequently, the amount of<br />
impervious surface area is a good measure of environmental quality.<br />
Several methods can be used to estimate the percentage of impervious l<strong>and</strong> at different l<strong>and</strong>scape<br />
levels. Maps with the spatial distribution of the city’s l<strong>and</strong> cover can be very helpful in reporting areas<br />
which are more vulnerable <strong>and</strong> where negative impacts of urbanization should be minimized.<br />
One obvious source of information about the urban environment is remote sensing data. The<br />
constantly increasing availability <strong>and</strong> accessibility of modern remote sensing technologies has<br />
provided new opportunities for a wide range of urban applications such as mapping <strong>and</strong> monitoring of<br />
the urban environment (l<strong>and</strong> cover, l<strong>and</strong> use, morphology, urban structural types), socio-economic<br />
estimations (population density), characterization of urban climate (microclimate, human health<br />
conditions), analysis of regional <strong>and</strong> global impacts – (ground water <strong>and</strong> climate modeling, urban heat<br />
isl<strong>and</strong>s) or urban security <strong>and</strong> emergency preparedness (sustainability, vulnerability) (Esch 2010).<br />
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Teresa Santos, Ségio Freire <strong>and</strong> José António Tenedório<br />
Remote sensing imagery due to its spectral, temporal <strong>and</strong> geographic characteristics, can be used in<br />
monitoring processes, as a source for related information like l<strong>and</strong> use <strong>and</strong> l<strong>and</strong> cover, surface<br />
roughness, terrain relief or soil moisture. Sawaya et al. (2003) explored the potential of VHR IKONOS<br />
<strong>and</strong> QuickBird satellite imagery for mapping <strong>and</strong> analysis of urban impervious surface area <strong>and</strong> water<br />
resources at local scales. Bauer et al. (2004) mapped <strong>and</strong> quantified the degree of impervious surface<br />
area over a large geographic area <strong>and</strong> over time, <strong>using</strong> a multi-temporal L<strong>and</strong>sat imagery data set.<br />
Yuan <strong>and</strong> Bauer (2006) compared the normalized difference vegetation index (NDVI) <strong>and</strong> percent<br />
impervious surface as indicators of surface urban heat isl<strong>and</strong> effects in L<strong>and</strong>sat imagery. Aponte<br />
(2007) used a QuickBird image in order to detect different types of impervious surfaces, <strong>and</strong> studied<br />
the relationship between the rainfall-infiltration-runoff rates, the l<strong>and</strong> cover <strong>and</strong> the geomorphologic<br />
susceptibility. Zhang et al. (2009) extracted vegetation <strong>and</strong> impervious surface as indicators of urban<br />
l<strong>and</strong> surface temperature from IKONOS imagery.<br />
The present work details the development of an updated <strong>and</strong> detailed map of imperviousness for the<br />
city of Lisbon <strong>using</strong> IKONOS-2 satellite imagery. The Vegetation-Impervious-Soil (VIS) model,<br />
developed by Ridd (1995), was used as the basis for extracting l<strong>and</strong> cover information at the cityscale.<br />
It is a conceptual representation that allows simplifying the analysis of urban surfaces by<br />
decomposing it in three basic l<strong>and</strong> cover components: vegetation, impervious surface <strong>and</strong> soil.<br />
After collecting data on l<strong>and</strong> cover from remote sensing data, several indicators can be assessed.<br />
Indicators on l<strong>and</strong> sealing area, quantification of green area, or the vacant l<strong>and</strong> available in the city,<br />
are ecological measures that can be used for monitoring <strong>and</strong> analyzing trends over the territory.<br />
Studies on impacts of urbanization, responses to natural <strong>and</strong> man-made disasters, vulnerability<br />
analysis or ho<strong>using</strong> conditions, all require l<strong>and</strong>-based indicators. The geographical data constitute the<br />
base of the spatial representation of the indicators. Urban indicators are designed to measure the<br />
quality of life <strong>and</strong> the nature of development of an urban area. These indicators can be used to make<br />
policy <strong>and</strong> planning decisions, to identify whether policy goals <strong>and</strong> targets are being met, <strong>and</strong><br />
sometimes to predict change.<br />
2. Data set <strong>and</strong> study area<br />
The dataset explored in this paper includes spectral data, acquired by the IKONOS-2 satellite. The<br />
IKONOS image was acquired in June, 30, 2008, <strong>and</strong> has a spatial resolution of 4 m in the<br />
multispectral mode (visible <strong>and</strong> near-infrared b<strong>and</strong>s) <strong>and</strong> 1 m in the panchromatic mode, <strong>and</strong> a<br />
radiometric resolution of 11 bits.<br />
The study area is the city of Lisbon (Figure 1). The municipality occupies an area of 84 Km 2 , <strong>and</strong> is a<br />
typical European capital city, with a very diverse l<strong>and</strong> use dynamics, varying from historical<br />
neighborhoods where the street-network is dense <strong>and</strong> the most of the area is built-up, to modern<br />
residential ones, with on-going construction of roads <strong>and</strong> multi-family buildings. Between these two<br />
situations, there are more heterogeneous places with l<strong>and</strong> uses such as residential, parks,<br />
agriculture, vacant l<strong>and</strong>, industrial, utilities, <strong>and</strong> schools.<br />
3. Methodology<br />
The cartographic workflow based on remote sensing data, begins with the pre-processing stage<br />
where the images are orthorectified. Afterwards, the digital processing takes place to produce a map<br />
with the location of the l<strong>and</strong> cover features.<br />
The nomenclature is organized in two levels of detail, following the VIS model. The 1 st level includes<br />
the classes “Vegetation”, “Impervious Surfaces”, <strong>and</strong> “Soil”. On the 2 nd level, seven classes were<br />
defined: “Trees”, “Low Vegetation”, “Buildings”, “Roads”, “Other impervious surfaces”, “Soil”, <strong>and</strong><br />
“Shadows <strong>and</strong> Water” (Table 1).<br />
Green areas are an important l<strong>and</strong> use in urban areas which perform relevant environment functions,<br />
such as improving urban climate, reducing atmospheric pollution, providing amenities, aesthetical<br />
benefits <strong>and</strong> a good environment for urban population. Green l<strong>and</strong> cover includes trees, shrubl<strong>and</strong>,<br />
herbaceous <strong>and</strong> agriculture fields.<br />
Impervious surfaces can generally be defined as anthropogenic features, such as roads, buildings,<br />
sidewalks <strong>and</strong> parking lots, through which water cannot infiltrate into the soil. The artificial surface<br />
cover can be used to evaluate the quality of urban streams, <strong>and</strong> to study effects of runoff. Impervious<br />
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Teresa Santos, Ségio Freire <strong>and</strong> José António Tenedório<br />
surface is increasingly recognized as a key indicator for assessing the sustainability of l<strong>and</strong> use<br />
changes due to urban growth.<br />
Figure 1: Study area <strong>and</strong> data set used for building Lisbon’s impervious surface map<br />
Table 1: L<strong>and</strong> cover nomenclature<br />
Level 1 Level 2<br />
Vegetation Trees<br />
Low vegetation<br />
Impervious surface Buildings<br />
Roads<br />
Other impervious surfaces<br />
Soil Soil<br />
Shadow <strong>and</strong> Water Shadow <strong>and</strong> Water<br />
Soil is vacant l<strong>and</strong> <strong>and</strong> is usually comprised of soil with little vegetation, thin soil, s<strong>and</strong> or rocks.<br />
Shadows occur in remotely sensed imagery when objects totally or partially occlude the direct light<br />
from a source of illumination, which include cast shadows (shadows cast on the ground, or on other<br />
objects, by high-rise objects), <strong>and</strong> self-shadows (the part of the object that is not illuminated)<br />
(Salvador et al. 2001). Great difficulty arises in classification <strong>and</strong> interpretation of shaded objects in an<br />
image due to the reduction or total loss of spectral information of those shaded objects (Dare 2005).<br />
This issue is particularly significant in urban environments where tall buildings are often present.<br />
Water is included in the same class as shadow, since both are dark objects in the image that will not<br />
be used for producing urban indicators.<br />
3.1 Pre-processing<br />
Based on the original IKONOS-2 imagery, a pansharp image of the visible <strong>and</strong> panchromatic b<strong>and</strong>s<br />
was produced, <strong>using</strong> the method available at PCI Geomatica. This new pansharp image has a spatial<br />
resolution of 1 m. The IKONOS-2 pansharp image was then orthorectified in order to reduce the<br />
geometric distortions introduced by the relief <strong>and</strong> to attribute a national coordinate system (ETRS89).<br />
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Teresa Santos, Ségio Freire <strong>and</strong> José António Tenedório<br />
The orthorectification was performed based on the Rational Polynomial Coefficients (RPCs) available<br />
with the image, <strong>and</strong> a set of 48 ground control points retrieved from the 1:1 000 planimetry <strong>and</strong><br />
altimetric cartography of 1998 (a Digital Terrain Model - DTM). Furthermore, 55 check points were<br />
selected to evaluate the transformation. The obtained Root Mean Square Error (RMSE) was less than<br />
one pixel, as desired. Afterwards, a Normalized Difference Vegetation Index (NDVI) (Rouse et al.<br />
1973) image was produced to integrate the dataset for feature extraction.<br />
The images selected to be used in the next processing stages were the IKONOS pansharp image (1<br />
m resolution) <strong>and</strong> the NDVI image (1 m resolution).<br />
3.2 Feature extraction<br />
Current <strong>and</strong> future VHR satellite imagery provides an advantageous alternative to traditional methods<br />
in detecting <strong>and</strong> mapping urban features. However, their effective use requires the development of<br />
novel approaches that enable a timely <strong>and</strong> consistent discrimination, classification <strong>and</strong> delineation of<br />
these specific l<strong>and</strong> uses with quality indices that match the corresponding map scale. In this context,<br />
Geographic Object Based Image Analysis (GEOBIA) approaches are the recent response to this<br />
emerged sophisticated user needs <strong>and</strong> expectations on geographic information products (Hay <strong>and</strong><br />
Castilla 2008).<br />
All feature extraction was performed in Feature Analyst (FA) v4.2 (by VLS) for <strong>ArcGIS</strong> (ESRI). The<br />
classification is based on a supervised approach <strong>and</strong> aims at extracting the three main components of<br />
l<strong>and</strong> cover: “Vegetation”, “Impervious Surfaces” <strong>and</strong> “Soil”. The first step is the manual digitizing of<br />
training areas for each class, followed by the definition of parameters like the number of b<strong>and</strong>s to be<br />
classified, the type of input representation, <strong>and</strong> aggregation. The classifier uses feature<br />
characteristics such as spectral response/color, size, shape, texture, pattern, shadow, <strong>and</strong> spatial<br />
association, for feature classification. After an initial classification, there is the possibility to remove<br />
clutter or add missing areas. This hierarchical learning adaptive process allows to iteratively improve<br />
the image classification. The classified map can then be post-processed to aggregate <strong>and</strong><br />
geometrically generalize the features.<br />
The first class to be extracted was “Shadow <strong>and</strong> Water”. Dark objects, that include both water <strong>and</strong><br />
shadows, were extracted with a histogram thresholding method. A synthetic brightness image was<br />
initially computed though the mean value of the near-infrared, red <strong>and</strong> green b<strong>and</strong>s <strong>and</strong> then a pixelbased<br />
histogram of brightness was analyzed to determine an optimum threshold value for shadows<br />
<strong>and</strong> non-shadows (a threshold value of 170 was set). As mentioned by Zhou et al. (2009), this<br />
histogram is bimodal, with the lower part being occupied by the darker features (shadows <strong>and</strong> water).<br />
In our case study, the selected threshold included shadows <strong>and</strong> deep water bodies.<br />
After extracting shadows <strong>and</strong> water elements, the next steps explored the possibility of classifying the<br />
study area in two major classes - “Vegetation”, “No-vegetation” – <strong>and</strong> in the subsequent stages, each<br />
individual class of the nomenclature was extracted independently.<br />
The vegetation extraction was conducted for the unclassified areas (i.e., no shadow or water<br />
elements). In order to separate vegetated from non-vegetated surfaces in the urban environment, the<br />
NDVI was used, based on the pansharp image. A threshold of 0.22 was determined depending on the<br />
intensity values to mask the vegetated regions. This layer st<strong>and</strong>s for the level 1 class “Vegetation”<br />
<strong>and</strong> includes the city’s green surface. In the 2 nd level of the nomenclature, two classes were<br />
distinguished: “Trees” <strong>and</strong> “Low Vegetation”. The first class identifies trees <strong>and</strong> tall bushes, whereas<br />
the other identifies lawns <strong>and</strong> other herbaceous vegetation. The “Trees” were extracted with FA <strong>using</strong><br />
8 training areas, the pansharp <strong>and</strong> the NDVI image, Bull Eye’s 3 for the input representation, width 5,<br />
masking in the level 1 class “Vegetation”, <strong>and</strong> 5 pixels of aggregation. After training the classifier, the<br />
final map was obtained after one ‘add missing areas’ process. The low vegetation class was the<br />
remaining vegetation.<br />
The next major class to be extracted was “Soil”, <strong>and</strong> was applied in the unclassified areas (i.e., no<br />
shadow, no water, <strong>and</strong> no vegetation). The dataset included the pansharp image <strong>and</strong> the nDSM. The<br />
classifiers’ learning was done in two independent extractions, considering two types of soil classes:<br />
bare l<strong>and</strong> with some earth, <strong>and</strong> thin soil. Bare l<strong>and</strong> was extracted with the Manhattan algorithm, width<br />
3, <strong>and</strong> 100 pixels of aggregation, <strong>and</strong> the other class with the same algorithm, but considering 50<br />
pixels for aggregation. The bare soil was subject to an iteration of removing clutter. The final step was<br />
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Teresa Santos, Ségio Freire <strong>and</strong> José António Tenedório<br />
the generalization of the soil polygons <strong>using</strong> the aggregate polygons tool from <strong>ArcGIS</strong>. The<br />
parameters were merging polygons that distance 2 m, <strong>and</strong> considering areas grater or equal to 100<br />
m 2 .<br />
The map of impervious areas includes a wide range of materials, some of which have very different<br />
spectral properties (e.g., pavement, concrete, roof tiles, etc.). The 1 st level class “Impervious Surface”<br />
corresponds to the l<strong>and</strong> surface after masking out the “Vegetation”, “Soil”, “Shadow”, <strong>and</strong> “Water”<br />
classes. In the 2 nd level of the nomenclature, three classes were distinguished: “Buildings”, “Roads”<br />
<strong>and</strong> “Others”, based on the pansharp image <strong>and</strong> the nDSM.<br />
“Buildings” were extracted in three stages, considering different roof materials. For the red tiles, the<br />
parameters used were Manhattan representation, width 7, <strong>and</strong> 75 pixels of aggregation. For the<br />
darker roof materials <strong>and</strong> for the brighter ones, Manhattan representation, width 7, <strong>and</strong> 100 pixels of<br />
aggregation were the selected parameters. All learning’s were followed by remove clutter or add<br />
missing data iterations to reach the final “Buildings” class. The last step included generalizing the<br />
building polygons <strong>using</strong> the same parameters as for the “Soil” class: merging polygons that distance 2<br />
m, <strong>and</strong> considering areas grater or equal to 100 m 2 .<br />
The class “Roads” was extracted in three independent processes, <strong>using</strong> different parameters. For the<br />
larger roads, Bull’s Eye 2, width 25, <strong>and</strong> 1100 pixels of aggregation were considered. For the narrow<br />
roads, Bull’s Eye 2, width 19, <strong>and</strong> 500 pixels of aggregation were considered. The remaining asphalt<br />
pavement was extracted with Bull’s Eye 2, width 25, <strong>and</strong> 500 pixels of aggregation. These three<br />
layers were then merged to produce the “Roads” class. The final layer was obtained by<br />
generalization, <strong>using</strong> 2 m as merging distance <strong>and</strong> 100 m 2 as minimum area.<br />
The “Other impervious surfaces” (like sidewalks or railroads), were the remaining areas within the<br />
“Impervious surface” class, after masking out the “Buildings” <strong>and</strong> “Roads” classes.<br />
Figure 2 shows the final L<strong>and</strong> Cover Map produced for 2008 (LCM2008), for the city of Lisbon, <strong>using</strong><br />
satellite data.<br />
3.3 Accuracy assessment<br />
The thematic accuracy of the LCM2008 was evaluated based on a stratified r<strong>and</strong>om sampling. For<br />
each strata (i.e., each level 2 l<strong>and</strong> cover class), 100 r<strong>and</strong>om points were analyzed through visual<br />
analysis of the imagery <strong>and</strong> ancillary data. From the 700 samples, 2 were excluded from the<br />
evaluation because it was not possible to correctly identify the class. The samples were then used to<br />
build the error matrix <strong>and</strong> to derive thematic accuracy indexes. From this analysis, we conclude that<br />
the LCM2008 has an Overall Accuracy of 89% <strong>and</strong> a KHAT statistic of 87%, in the most detailed level.<br />
These values indicate great agreement between the reference data <strong>and</strong> the classified map.<br />
4. Building urban indicators<br />
Studies on impacts of urbanization, responses to natural <strong>and</strong> man-made disasters, vulnerability<br />
analysis or ho<strong>using</strong> conditions, all require updated l<strong>and</strong> cover information. In this case study, we<br />
propose a set of indicators, strictly assessed from VHR imagery.<br />
From LCM2008, two variables are extracted for building the proposed urban indicators: the area<br />
(Table 2) <strong>and</strong> the spatial distribution of each l<strong>and</strong> cover class in the city (Figure 2). Using the area of<br />
each l<strong>and</strong> cover, urban environmental indicators strictly based on VHR imagery can be assessed<br />
(Table 3).<br />
5. Conclusions<br />
The LCM2008 provides a detailed <strong>and</strong> cost-effective digital map of the city of Lisbon. This case study<br />
demonstrates the utility of l<strong>and</strong> cover mapping for building urban indicators for monitoring planning<br />
actions. The mapping methodology presented, ensures that urban planners have updated data on<br />
l<strong>and</strong> cover at a regular basis. This tool can be used for monitoring the incidence of l<strong>and</strong> cover change<br />
within the city, decide on which areas of priority intervention, or assess natural resource sites for<br />
preservation <strong>and</strong> restoration.<br />
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Figure 2: L<strong>and</strong> cover map of 2008 derived from IKONOS imagery for the city of Lisbon<br />
Table 2: Areas of the level 1 <strong>and</strong> 2 l<strong>and</strong> cover classes in the city of Lisbon<br />
Level 1 Area Level 2 Area<br />
Vegetation 2428 Trees 1101<br />
Low vegetation 1327<br />
Impervious surface 4907 Buildings 1213<br />
Roads 1352<br />
Other impervious surfaces 2342<br />
Soil 839 Soil 839<br />
Shadow <strong>and</strong> Water 299 Shadow <strong>and</strong> Water 299<br />
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Table 3: Urban indicators based on VHR data, in the city of Lisbon<br />
Acknowledgements<br />
Indicator based on VHR data Value<br />
Green area available in the city 29 %<br />
Tree area available in the city 13 %<br />
Bare soil available in the city 101 %<br />
Impervious area available in the city 58 %<br />
Building area available in the city 14 %<br />
Impervious area that is occupied by Building 4<br />
Green area vs. impervious area 0.5<br />
Pervious area vs. impervious area 0.7<br />
This work was conducted in the framework of project GeoSat - Methodologies to extract large scale<br />
GEOgraphical information from very high resolution SATellite images, funded by the Portuguese<br />
Foundation for Science <strong>and</strong> Technology (PTDC/GEO/64826/2006).<br />
References<br />
Aponte, A.G.P. (2007) “Runoff coefficients <strong>using</strong> a quickbird image for mapping flood hazard in a Tropical<br />
Coastal City, Campeche, Mexico”, Geoscience <strong>and</strong> Remote Sensing Symposium, 2007. IGARSS 2007.<br />
IEEE International, pp 4702 – 4706.<br />
Bauer, M.E., Heinert, N., Doyle, J. (2004) “Impervious Surface Mapping <strong>and</strong> Change Monitoring <strong>using</strong> L<strong>and</strong>sat<br />
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ASPRS, Denver, Colorado.<br />
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Urban Environments?” REAL CORP 2010 Cities for Everyone. Liveable, Healthy, Prosperous, Vienna,<br />
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Hay, G. J., <strong>and</strong> Castilla, G. (2008) “Geographic Object-Based Image Analysis (GEOBIA): A new name for a new<br />
discipline?”, Object-Based Image Analysis – spatial concepts for knowledge-driven remote sensing<br />
applications, Eds: T. Blaschke, S. Lang, G. J. Hay, Springer-Verlag., pp 75-89.<br />
Ridd, M.K. (1995) “Exploring a V-I-S (Vegetation-Imperious Surface-Soil) Model or Urban Ecosystem Analysis<br />
Through Remote Sensing: Comparative Anatomy of Cities”, International Journal of Remote Sensing, Vol.<br />
16, pp 2165-2185.<br />
Rouse, J.W., Hass, R.H., Schell, J.A., <strong>and</strong> Deering, D.W. (1973) “Monitoring vegetation systems in the great<br />
plains with ERTS, Third NASA ERTS Symposium, Vol. 1, pp 309-317.<br />
Salvador, E., Cavallaro, A., Ebrahimi, T. (2001) “Shadow identification <strong>and</strong> classification <strong>using</strong> invariant color<br />
models”, IEEE International Conference on Acoustics, Speech <strong>and</strong> Signal Processing, Vol. 3, pp<br />
1545−1548.<br />
Sawaya, K., Olmanson, L., Heinert, N., Brezonik, P., Bauer, M. (2003) ”Extending Satellite Remote Sensing to<br />
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Environment, Vol. 88, pp 144-156.<br />
Yuan, F., Bauer, M.E. (2006) “Mapping impervious surface area <strong>using</strong> high resolution imagery: a comparison of<br />
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Sensing ASPRS Annual Conference, Reno, Nevada.<br />
Zhang, X., Zhong, T., Wang, K., Cheng, Z. (2009) “Scaling of impervious surface area <strong>and</strong> vegetation as<br />
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Zhou, W., Huang, G., Troy, A., Cadenasso, M.L. (2009). “Object based l<strong>and</strong> cover classification of shaded areas<br />
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Reflections on the Role of the Lecturer as Teacher,<br />
Researcher <strong>and</strong> Mentor in a Project-Based Approach for<br />
IS/IT Majors at Three Different Academic Institutions<br />
Elsje Scott 1 , Peter Weimann 2 <strong>and</strong> Nata van der Merwe 3<br />
1<br />
University of Cape Town, South Africa<br />
2<br />
Beuth Hochschule, Berlin, Germany<br />
3<br />
Cape Peninsula University of Technology, Cape Town, South Africa<br />
elsje.scott@uct.ac.za<br />
weimann@beuth-hochschule.de<br />
nata@smartsearch.co.za<br />
Abstract: This paper focuses on the role of the lecturer embarking on a project-based approach to teaching in<br />
the IS/IT environment. An initial literature survey provides an underst<strong>and</strong>ing of the project-based approach, how<br />
it helps to prepare students for a changing business environment, <strong>and</strong> the expertise required of lecturers<br />
embarking on this approach. The authors then reflect on their own experiences in <strong>using</strong> the project-based<br />
approach to prepare students for future careers in IT. The paper explores their roles as teachers, mentors <strong>and</strong><br />
researchers, discusses the challenges that were encountered, <strong>and</strong> identifies some critical success factors. From<br />
the lecturer’s point of view, the project-based approach offers a win-win scenario for both students <strong>and</strong> lecturers:<br />
it gives students the competencies required by industry, while at the same time it gives lecturers the opportunity<br />
to keep up with industry expectations, <strong>and</strong> creates opportunities for sharing experiences with professional<br />
practitioners as well as fellow academics.<br />
Keywords: <strong>Information</strong> systems, project-based approach, lecturer skills, teaching <strong>and</strong> learning strategies<br />
1. Introduction<br />
<strong>Information</strong> technology (IT) has become an integral part of almost all the business activities of modern<br />
organisations, making it essential for IT to be aligned with business on the strategic, tactical <strong>and</strong><br />
operational levels (White, 2004). This alignment between business <strong>and</strong> IT is a dynamic one, which<br />
should respond to changes in technology as well as changes in the business environment. The<br />
literature confirms that employees who can continuously align technology to the organisation’s needs<br />
constitute vital resources for achieving a sustained competitive advantage (Peppard <strong>and</strong> Ward, 2004).<br />
In a previous paper (Van der Merwe, Scott <strong>and</strong> Weimann, 2010) we argued that a project-based<br />
teaching approach can enhance the development of the competencies required for IS/IT students to<br />
succeed in a modern, complex business environment. We then derived a model to show how projectbased<br />
learning can help students to acquire the necessary experience <strong>and</strong> knowledge, the flexibility<br />
to learn new skills, the agility needed to adapt to a fast-changing environment, <strong>and</strong> the ability to fulfil<br />
specific roles in an organisation (van der Merwe et al., 2010).<br />
This paper focuses on the role of the lecturer, for whom the project-based approach presents a twofold<br />
challenge. Firstly, teaching <strong>and</strong> learning strategies that promote the integration of theoretical <strong>and</strong><br />
practical knowledge must be introduced into the classroom. Secondly, the lecturer must stay in tune<br />
with changing business requirements <strong>and</strong> expectations. This paper presents the reflections of<br />
lecturers from three academic institutions, two in South Africa <strong>and</strong> one in Europe, on their<br />
experiences of <strong>using</strong> the project-based approach. In doing so, it describes the strategies employed at<br />
the three institutions to engage <strong>and</strong> motivate their students, <strong>and</strong> discusses the critical success factors<br />
that emerged <strong>and</strong> the difficulties that were encountered.<br />
2. The project-based approach<br />
In the project-based approach, students work in small collaborative groups to explore <strong>and</strong> solve realworld<br />
business problems. Lecturers must carefully plan, manage <strong>and</strong> assess the projects to ensure<br />
that students learn relevant academic concepts, while at the same time developing key skills required<br />
in the modern business environment, such as collaboration, communication <strong>and</strong> critical thinking.<br />
According to Gerogiannis <strong>and</strong> Fitsilis (2005), the project-based approach is a powerful <strong>and</strong> widely<br />
adopted tool that provides students with the opportunity to actively develop their knowledge through<br />
practical experience. Active participation in challenging projects also improves students’ cognitive,<br />
collaborative, methodological <strong>and</strong> technical skills. Yam <strong>and</strong> Rossini (2010) believe that students who<br />
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Elsje Scott, Peter Weimann <strong>and</strong> Nata van der Merwe<br />
are exposed to experiential learning through the project-based approach, develop a ‘feel’ for the<br />
activities involved.<br />
The relationship between the kinds of knowledge honoured in academia, <strong>and</strong> the kinds of<br />
competence valued in professional practice, is a challenging one (Schön, 1983). Traditional skills <strong>and</strong><br />
abilities are no longer sufficient for students entering the modern job market (Barron <strong>and</strong> Darling-<br />
Hammond, 2008); they must be able to gather, synthesise, <strong>and</strong> analyse information, <strong>and</strong> work with<br />
others to make use of the newly acquired knowledge, while responding to a continuously changing<br />
technical, economic <strong>and</strong> social environment. Baron <strong>and</strong> Darling-Hammond (2008) assert that<br />
students learn more deeply if they have engaged in activities that require the application of<br />
classroom-gathered knowledge to real-world problems, as in the project-based approach.<br />
Thomas (2000) points out that the project-based learning model distinguishes itself from traditional<br />
teaching by emphasising the learner <strong>and</strong> the project, with the focus on how information is processed<br />
<strong>and</strong> used. Students discover their ability to acquire the knowledge <strong>and</strong> skills needed to accomplish<br />
project tasks, which instils <strong>and</strong> reinforces the habit of life-long learning. According to Norman, Rose<br />
<strong>and</strong> Lehmann (2004), student-centered learning fosters a creative environment that offers increased<br />
opportunity for students to develop skills in areas such as oral <strong>and</strong> written communication, critical<br />
thinking, personal relationships, <strong>and</strong> the ability to work in diverse groups.<br />
Baron <strong>and</strong> Darling-Hammond (2008) claim that project-based learning is superior to traditional<br />
methods of instruction in supporting flexible problem solving, reasoning skills, <strong>and</strong> generating<br />
accurate theories <strong>and</strong> sound explanations. While project-based learning is not the only strategy with<br />
which to achieve effective learning in complex areas, it has been considerably more successful than<br />
traditional methods in training competent <strong>and</strong> skilled practitioners <strong>and</strong> promoting long-term retention<br />
of knowledge <strong>and</strong> skills (Strobel <strong>and</strong> van Barneveld, 2008).<br />
According to Mergendoller, Markham, Ravitz, & Larmer (2006), project-based learning differs from<br />
more traditional teaching strategies in that teachers provide students with suggestions for further<br />
study or inquiry rather than assigning preset learning activities. This appeals to students, since<br />
instead of reading or hearing about facts <strong>and</strong> concepts, they are personally involved in solving<br />
realistic problems that reflect the day-to-day decisions <strong>and</strong> dilemmas of the business world<br />
(Mergendoller et al, 2006). In turn this leads to higher student engagement <strong>and</strong> motivation (Tech,<br />
2010).<br />
Unlike the frequently competitive nature of the traditional teaching approach, the project-based<br />
approach calls for sharing of ideas <strong>and</strong> collaboration, with students having to work together to reach a<br />
common goal (Gerogiannis <strong>and</strong> Fitsilis, 2005; Messmer,1999). Experience of teamwork <strong>and</strong> the<br />
project environment is a vital learning experience for IS/IT graduates, who will be entering a business<br />
environment that has evolved from being functionally organised or process driven, to what is currently<br />
referred to as a project-driven environment (Crawford, Morris, Thomas, & Winter, 2006).<br />
The role of the lecturer as a teacher is very different from the role of the lecturer as a mentor (Shaw,<br />
Woodford <strong>and</strong> Benwell, 2007). The teacher provides clarity <strong>and</strong> direction; while the mentor acts as a<br />
sounding board, providing guidance <strong>and</strong> support without telling students what to do (Shaw et al.,<br />
2007). Grant (2009) finds the lecturer to be an important determinant of the success of the projectbased<br />
approach, since although students control their own use of resources <strong>and</strong> the artifacts they<br />
produce, they still rely heavily on the lecturer for guidance when faced with choices <strong>and</strong> challenges.<br />
Mergendoller et al. (2006) ascribe the successful implementation of project-based teaching to how<br />
well lecturers adopt the role of mentor in their classrooms, which encourages students to become<br />
motivated independent learners (Wurdinger <strong>and</strong> Rudolph, 2009).<br />
It remains a challenge for a lecturer to implement project-based teaching in such a way that students<br />
receive the full benefit of this approach. We believe that to accomplish this, the lecturer must fulfil<br />
three roles: those of teacher, researcher <strong>and</strong> mentor. As a teacher, the lecturer must ensure that the<br />
core syllabus is covered; the researcher must stay abreast of developments in teaching pedagogy as<br />
well as in technology <strong>and</strong> business; <strong>and</strong> the mentor must encourage attitudes of enquiry <strong>and</strong><br />
independence in their students.<br />
444
3. Reflective practice<br />
Elsje Scott, Peter Weimann <strong>and</strong> Nata van der Merwe<br />
For the successful implementation of project-based teaching, we subscribe to the notion of <strong>using</strong><br />
reflection to explore the roles of teacher, mentor <strong>and</strong> researcher. Confucius (551 BC - 479 BC) stated:<br />
”by three methods we may learn wisdom: first, by reflection, which is noblest; second, by imitation,<br />
which is easiest; <strong>and</strong> third by experience, which is the bitterest”. The value of reflection in the pursuit<br />
of knowledge remains relevant today.<br />
Schön (1983) proposes that reflection enables professional practitioners to criticise the implicit<br />
underst<strong>and</strong>ings that have developed around repetitive experiences, <strong>and</strong> encourages them to make<br />
new sense of situations. This reflection can occur in two ways: practitioners can reflect on a situation<br />
<strong>and</strong> explore their underst<strong>and</strong>ing of how they h<strong>and</strong>led it; or they can use reflection-in-action while they<br />
are in the midst of a situation (Schön, 1983).<br />
According to Argyris (1991) reflection gives us an underst<strong>and</strong>ing of learning through experience <strong>and</strong>,<br />
by engaging in collective dialogue about our experience, we build our underst<strong>and</strong>ing of it. Argylis<br />
(1991) states that to continue learning, we should critically reflect on our own behaviour, <strong>and</strong><br />
advocates that people at all levels of an organisation should reflect critically on their organisational<br />
practices to enable change.<br />
Jordi (2010) describes reflection as an activity where people recapture their experience, think about it,<br />
<strong>and</strong> evaluate it to extract new knowledge from it. He argues that reflective practice should not just be<br />
a cognitive exercise; it should help us get in touch with dissonances, like fear <strong>and</strong> stress, that cause<br />
mind-body disunity. Reflective practices facilitate integrated experiential learning by including the<br />
richness <strong>and</strong> complexity of human experience <strong>and</strong> the increased awareness that accompanies the<br />
knowledge creation process.<br />
In light of the above, we deem it important to reflect on our experiences as they have played out in the<br />
three case studies described in this paper. The next section gives an account of our reflections on<br />
the role of the lecturer as teacher, mentor <strong>and</strong> researcher <strong>using</strong> the project-based approach at three<br />
academic institutions: University of Cape Town (UCT) <strong>and</strong> Cape Peninsula University of Technology<br />
(CPUT), both in Cape Town, South Africa, <strong>and</strong> Beuth Hochschule (BHT) in Berlin, Germany. All three<br />
institutions offer a bachelor degree in <strong>Information</strong> Systems.<br />
4. Reflections on the use of the project-based approach at three different<br />
institutions<br />
The project-based approach is being used at all three institutions for teaching project management to<br />
third-year students. At UCT <strong>and</strong> CPUT the courses are taught on campus through face-to-face<br />
contact time, while the BHT course is taught as an online blended course.<br />
4.1 Reflections on course design<br />
At UCT a systems development group project is the major deliverable of the third year capstone<br />
course of the IS undergraduate curriculum. The course includes topics like requirements planning,<br />
software design, software construction, <strong>and</strong> testing. Templates, checklists, patterns <strong>and</strong> guides are<br />
custom designed <strong>and</strong> support the creation of the relevant artefacts (Scott, 2006). A comprehensive<br />
assessment strategy uses a range of instruments to conduct formal summative assessment, formal<br />
continuous assessment <strong>and</strong> an informal formative assessment (Scott & van der Merwe, 2003). The<br />
course content adheres to international curriculum st<strong>and</strong>ards as specified in the IS Model Curriculum<br />
(Gorgone, et al., 2003) <strong>and</strong> the Computing Curricula 2005 (Shackelford, et al., 2006). The main<br />
objective of the course is to give students a real world experience of the diverse <strong>and</strong> complex nature<br />
of the <strong>Information</strong> Systems profession <strong>and</strong> provide them with adequate skills for the global<br />
marketplace. Mitigation strategies <strong>and</strong> a reflective approach have been applied to the course design<br />
over a number of years, resulting in the development of a framework that has been used to achieve a<br />
highly sophisticated project-based learning experience.<br />
At UCT, lecturer skills are developed through a collaborative mentorship program. New lecturers are<br />
teamed with experienced lecturers when teaching the project-based approach for the first time, to<br />
gather experience <strong>and</strong> share the necessary knowledge <strong>and</strong> skills.<br />
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At CPUT an integrated systems development project is central to the project management course<br />
taken by third year students studying towards either a National Diploma in Financial <strong>Information</strong><br />
Systems or a bachelor degree in Financial <strong>Information</strong> Systems. Both students <strong>and</strong> prospective<br />
employers attach great value to the integration of practical <strong>and</strong> theoretical knowledge <strong>and</strong> skills that is<br />
achieved through this real-world learning experience. The curriculum focuses on the underst<strong>and</strong>ing of<br />
the project management life-cycle <strong>and</strong> processes, the project team <strong>and</strong> teamwork, as well as the<br />
importance of communication in the project <strong>and</strong> business environment. Life skills needed in the<br />
complex work environment are also incorporated.<br />
The lecturer involved at CPUT worked in the IT industry in a project environment <strong>and</strong> also attended<br />
courses whilst working in the private sector. A number of years of lecturing experience <strong>and</strong> learning<br />
through trial-<strong>and</strong>-error helped develop the necessary teaching <strong>and</strong> mentoring skills. However, there is<br />
no involvement of other lecturers, no formal skills transfer strategy, <strong>and</strong> no succession or contingency<br />
plans exist.<br />
The course “<strong>Information</strong> Systems Project” at BHT is taken by undergraduate students in their third<br />
year of an online Bachelor of <strong>Information</strong> Systems degree. This course comprises a major capstone<br />
project through which students must demonstrate their ability to integrate the theoretical <strong>and</strong> practical<br />
knowledge acquired during the previous two years of studying information systems. Prior to this<br />
project, students have completed courses adhering to the national German curriculum guideline<br />
(Wissenschaftliche Kommission (WK) Wirtschaftsinformatik im Verb<strong>and</strong> der Hochschullehrer, 2007),<br />
<strong>and</strong> have participated in a project management course taught according to the PMBOK of the PMI<br />
(Project <strong>Management</strong> Institute (PMI), 2004).<br />
At BHT the lecturer draws on personal experience in systems development <strong>and</strong> project management<br />
gained prior to his assignment at the university. In Germany, lecturers must have at least three years<br />
industry experience, in addition to appropriate academic qualifications, to apply for a lecturing post at<br />
a University of Applied Sciences.<br />
4.2 Reflections on Industry involvement<br />
For the capstone course at UCT, the business problem is usually a comprehensive web-based<br />
information management system with a particular focus or theme for each year. A list of<br />
specifications <strong>and</strong> functionality guidelines related to this generic theme is provided, <strong>and</strong> each student<br />
team is required to communicate with an industry sponsor who will provide them with an appropriate<br />
business problem. The sponsors are available for meetings <strong>and</strong> queries, provide guidance to the<br />
teams regarding user requirements <strong>and</strong> business processes, <strong>and</strong> review some project deliverables,<br />
but no monetary assistance is provided. At the end of each year UCT holds an exposition of the final<br />
systems for sponsors <strong>and</strong> other industry partners. This exposure has led to organisations<br />
approaching UCT to host student projects, creating a pool of project requests that already exists at<br />
the onset of the course.<br />
Many students at CPUT come from disadvantaged backgrounds <strong>and</strong> do not have access to<br />
computers at home. To level the playing field, all groups are given the same business problem, which<br />
is provided by a sponsor in the Financial Services industry. The system requirements are such that it<br />
can be developed in the university computer labs. Contact time on the lecturing time-table is<br />
sacrificed for dedicated team meetings <strong>and</strong> lab time, <strong>and</strong> for interaction with the sponsor.<br />
At BHT, it is felt that industry involvement in student projects might limit the opportunity for teams to<br />
make their own mistakes, which is an important element in developing knowledge by reflecting on<br />
experience. It would also restrict the ability of the lecturer to put teams under deliberate stress by<br />
introducing artificially constructed problems into their project (such as a change of requirements or a<br />
quality audit).<br />
4.3 Reflections on student mentoring<br />
At UCT, the three lecturers participating in the course act as project managers (PM) <strong>and</strong> provide<br />
guidance to their allocated project teams based on their own experience. Project teams must<br />
manage their own work, adhere to strict deadlines <strong>and</strong> meet their PM on a regular basis for<br />
discussions <strong>and</strong> the reviewing of deliverables. Fourth year students with excellent technical skills<br />
assist as technical mentors in workshops <strong>and</strong> tutorials. Masters students act as quality managers,<br />
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assisting in most of the project management tutorials. Students also benefit from an optional<br />
additional mentorship program driven by IS graduates working in industry. In collaboration with the<br />
course co-ordinator, these alumni have compiled a series of advanced topics addressing areas that,<br />
due to time constraints, might not otherwise receive sufficient attention during the course.<br />
At CPUT, all mentoring is done by the course co-ordinator, who has a formal meeting with each<br />
project team every second week. Students are encouraged to make additional appointments when<br />
needed. Teams submit weekly reports that are used by the course co-ordinator to monitor progress<br />
<strong>and</strong> individual participation, <strong>and</strong> to intervene <strong>and</strong> approach individuals or teams when needed.<br />
BHT students participate in two face-to-face meetings with their project mentor; apart from this, they<br />
communicate through internet technology. The teams meet the lecturer once a week online via Skype<br />
or Adobe Connect. Email is used for asynchronous communication <strong>and</strong> document exchange, together<br />
with Moodle, BHT’s web-based open-source learning, collaboration <strong>and</strong> research content<br />
management system.<br />
4.4 Reflections on teaching <strong>and</strong> learning strategies<br />
The teaching <strong>and</strong> learning strategies implemented at UCT focus on the development of awareness<br />
<strong>and</strong> underst<strong>and</strong>ing which, together with the acquisition of competence, facilitates transcendence<br />
(Cockburn, 2002). A wide range of interventions that integrate theory <strong>and</strong> practice ensure that<br />
students progress through Cockburn’s (2002) stages of following, detaching <strong>and</strong> fluency. Selected<br />
readings are used as sensitising devices to aid underst<strong>and</strong>ing <strong>and</strong> give meaning to phenomena<br />
occurring in the capstone environment. For both students <strong>and</strong> lecturers, reflection gives rise to<br />
“involvement <strong>and</strong> mattering” which according to Dreyfus (1999) nurtures transcendence through<br />
different stages of skills acquisition to grow competence, underpin life-long learning <strong>and</strong> finally to<br />
empower students.<br />
The teaching methods used at CPUT aim to actively engage students as much as possible, by<br />
encouraging them to learn from their own experiences, enhance their critical thinking ability, link<br />
theoretical concepts to their practical application, integrate new information with prior knowledge <strong>and</strong><br />
apply this in real-life situations. The teaching methods are learner-centred, <strong>and</strong> enabled through<br />
constructive <strong>and</strong> reflective learning. Care is taken that students do not passively receive new<br />
information, but become actively involved in internalising it, <strong>and</strong> they are encouraged to reflect on<br />
their learning experiences.<br />
Students at BHT experience the problems of working <strong>and</strong> communicating in a team <strong>and</strong> meeting the<br />
challenges of the magic triangle: in time, in budget, <strong>and</strong> in scope with high quality deliverables. The<br />
role of the lecturer is that of a mentor. The teams are expected to ask the right questions <strong>and</strong> to<br />
explain the options they want to discuss. Part of their marked deliverable at the end of the project is a<br />
self-reflective essay on the problems <strong>and</strong> experiences in their project work.<br />
4.5 Reflections on staying relevant <strong>and</strong> up to date, both in terms of teaching<br />
pedagogy <strong>and</strong> in terms of changing business requirements <strong>and</strong> expectations<br />
At UCT the challenge of providing an intellectually <strong>and</strong> socially stimulating environment calls for<br />
inspired <strong>and</strong> dedicated teaching <strong>and</strong> learning. A lecturer cannot meet all these dem<strong>and</strong>s alone.<br />
However, close connections with industry partners through research projects, the presentation of real<br />
world cases, boot-camps, customised mentorship programs, <strong>and</strong> visiting alumni students, all help to<br />
provide a “window to the real world”.<br />
The lecturer at CPUT gains benefit from participating in collaborative research with lecturers at other<br />
universities; attending, presenting <strong>and</strong> networking at conferences; <strong>and</strong> membership of professional<br />
organisations (which also provide networking opportunities). Unfortunately, due to heavy workloads<br />
<strong>and</strong> lack of time, it is not possible to conduct regular visits to business in order to learn more of<br />
current best practices <strong>and</strong> changing requirements.<br />
Undergraduate students at BHT must spend three months working in industry before they can write<br />
their bachelor thesis, <strong>and</strong> a further three months while the thesis is being completed. During these six<br />
months students are closely supervised by a university lecturer. This period of close interaction<br />
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between student, university <strong>and</strong> industry gives the lecturer a valuable opportunity to discover industry<br />
requirements relating to student qualifications <strong>and</strong> to exchange technology <strong>and</strong> research interests.<br />
4.6 Reflections on the roles of teacher, mentor <strong>and</strong> researcher<br />
Fundamental to UCT’s mission of becoming the central point of academic excellence in Africa, is its<br />
research-led identity. This leaves the teacher <strong>and</strong> mentor with the challenge of not only doing<br />
research-led teaching, but also research-led mentoring. The roles of teacher, mentor <strong>and</strong> researcher<br />
are thus inextricably linked, which necessitates deliberate <strong>and</strong> ongoing reflection-in-action to nurture<br />
the construction <strong>and</strong> reconstruction of knowledge <strong>and</strong> to cultivate a spirit of innovation.<br />
The single CPUT lecturer must fulfil all three roles of teacher, mentor, <strong>and</strong> researcher. The mentoring<br />
<strong>and</strong> guiding process is extremely time-consuming, leaving little time for conducting research,<br />
developing contacts, <strong>and</strong> visiting business. Collaborative research papers have made an important<br />
contribution to the development of skills needed to successfully implement the project-based<br />
approach.<br />
At BHT it is difficult to adequately address these roles in online sessions <strong>and</strong> the rare face-to-face<br />
meetings with student teams. Written communication, especially via email, helps to meet the needs of<br />
students <strong>and</strong> makes it possible for the lecturer to gather information that is relevant to research work.<br />
Putting on a specific hat (mentor, lecturer or researcher) <strong>and</strong> informing the teams that you are<br />
addressing them in a specific role makes it easier to overcome the communication challenge.<br />
4.7 Reflections on critical success factors<br />
Carefully planned interventions are critical to the success of the project-based approach at UCT.<br />
These ensure that students develop into reflexive practitioners with a real world perspective, <strong>and</strong><br />
sound technological, management <strong>and</strong> interpersonal skills. A comprehensive assessment strategy<br />
with associated timelines encompasses all the course objectives. The assessment instruments <strong>and</strong><br />
accompanying documentation are available to students via an electronic learning management<br />
system, ensuring that students are aware of the assessment criteria <strong>and</strong> associated st<strong>and</strong>ards. Other<br />
critical success factors are the effective mentoring process that cultivates a relationship of trust; <strong>and</strong><br />
the peer-evaluation process that encourages team member participation.<br />
Industry involvement is critical to the success of the project-based experience at CPUT. Students<br />
benefit from personal growth as well as improvement of skills, <strong>and</strong> very good feedback is received<br />
when these students do their in-service training. It is also very important that students are provided<br />
with a clear deliverables schedule <strong>and</strong> that deadlines are strictly enforced. Carefully planned<br />
additional material <strong>and</strong> case studies are critical to stimulate self-exploration of core subject matter.<br />
At the start of the project, a lot of time is spent on team development <strong>and</strong> team building. This is<br />
followed-up by close monitoring of team participation <strong>and</strong> coherence in teams, <strong>and</strong> intervention of the<br />
lecturer as mentor when needed. After deliverables are h<strong>and</strong>ed in <strong>and</strong> marked, students are given the<br />
opportunity for reflection <strong>and</strong> all deliverables are submitted as a project portfolio for final assessment<br />
at the end of the project. Multiple assessments are used that incorporate individual as well as team<br />
assessments, <strong>and</strong> a peer evaluation is included in the calculation of the final marks.<br />
At BHT, balancing the dual roles of mentor <strong>and</strong> teacher is critical to the success of the course. The<br />
same person who mentors the team for six months must also be able to assess them objectively,<br />
highlighting the importance of clearly defined deliverables <strong>and</strong> project acceptance criteria. A further<br />
critical success factor is the ability to communicate effectively with the team via electronic media, so<br />
that students will trust the lecturer as mentor sufficiently to share their problems <strong>and</strong> ask for advice,<br />
while at the same time respecting the judgement of the lecturer as teacher.<br />
4.8 Reflections on challenges <strong>and</strong> major concerns<br />
Lecturers following the project-based approach face the challenge of instilling passion <strong>and</strong><br />
maintaining a high level of motivation amongst students, while at the same time assisting them to deal<br />
with problems that emulate professional practice.<br />
At UCT, the initial sourcing, evaluation <strong>and</strong> selection of industry-based projects is a daunting task.<br />
Related to this is the additional concern that students may fail to meet the expectations of their<br />
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sponsor. Students are often tempted to neglect other academic subjects while working on their<br />
projects, or may be distracted by personal commitments, <strong>and</strong> so careful guidance is needed to<br />
manage their time. Equal <strong>and</strong> fair participation of team members is not always the norm, <strong>and</strong> factors<br />
like the diversity of skills, different work ethics <strong>and</strong> cultural backgrounds must be properly controlled<br />
<strong>and</strong> monitored to prevent conflict. Successfully addressing all of these issues dem<strong>and</strong>s time,<br />
commitment, passion <strong>and</strong> dedication from the lecturer.<br />
Some students at CPUT have difficulty adapting to project-based teaching methods, which may be<br />
attributed to lack of self-confidence or to lack of commitment. Technical resources also present a<br />
problem, as computer lab equipment (hardware <strong>and</strong> software) at CPUT is not leading-edge, <strong>and</strong><br />
many students have no other equipment to work on. A major concern is the lack of planning for skills<br />
transfer to other lecturers. If another lecturer were to take over, there would be a very steep learning<br />
curve <strong>and</strong> not everybody is prepared to put in the time <strong>and</strong> effort required to use the project-based<br />
approach.<br />
At BHT the biggest challenge of the online taught course is defining projects that are business-related<br />
<strong>and</strong> technologically stimulating. The concept of an online-learning approach makes it difficult to get<br />
industry on board as project sponsor, which would provide the lecturer with real life business<br />
problems. Another major concern is the difficulty of transferring skills <strong>and</strong> knowledge during online<br />
mentoring sessions.<br />
5. Discussion<br />
Schön (1983) believes that everybody needs to become competent in taking action <strong>and</strong><br />
simultaneously reflecting on this action to learn from it. According to Jordi (2010) reflective practices<br />
help to create meaning, leading to integrated experiential learning. As lecturers, we consider it<br />
essential to critically reflect on our project-based teaching experiences in order to ensure the<br />
innovative development <strong>and</strong> growth of our courses.<br />
Mergendoller et al. (2006) state that building the capacity <strong>and</strong> skill of lecturers embarking on this more<br />
complex form of teaching is a significant challenge, <strong>and</strong> effective project-based teaching does not<br />
happen automatically. UCT has an effective mentoring program in place for lecturers who are new to<br />
the project-based approach, resulting in a healthy environment where knowledge <strong>and</strong> skills are not<br />
limited to one or two lecturers. At the other institutions there is a lack of succession <strong>and</strong> contingency<br />
planning, <strong>and</strong> a real concern is that the project-based approach may be ab<strong>and</strong>oned if a different<br />
lecturer takes over the course.<br />
Mergendoller et al (2006) refer to the challenge for lecturers in learning to cope with new<br />
responsibilities, including the development of new teaching methods <strong>and</strong> classroom-management<br />
techniques, the balancing of direct instruction with student self-discovery, the facilitation of learning<br />
among groups, <strong>and</strong> the creation of assessments that enhance the learning process. These issues are<br />
echoed in the preceding lecturer reflections. In addition, the time <strong>and</strong> effort dem<strong>and</strong>ed by projectbased<br />
teaching detracts from the time needed to fulfil the role of researcher, which in this environment<br />
has two components: collaboration <strong>and</strong> networking with other academics, <strong>and</strong> linking with industry. In<br />
all three cases, the lecturers have maintained adequate academic collaboration <strong>and</strong> networking, but<br />
expressed concern about effective linking with industry.<br />
Shaw et al (2007) state that the role of a teacher differs from that of a mentor, <strong>and</strong> students often find<br />
it difficult to make this distinction. At UCT <strong>and</strong> CPUT this was not the case <strong>and</strong> students adapted with<br />
ease to the fact that a lecturer can be both a teacher <strong>and</strong> a mentor. However, at BHT role distinction<br />
was encountered as a problem, possibly as a result of the small number of face-to-face meetings held<br />
during the online blended course. This anomaly might be worth exploring in future research.<br />
Gerogiannis <strong>and</strong> Fitsilis (2005) argue that an important factor influencing the success of project-based<br />
learning is that the project should reflect real-world challenges. At UCT <strong>and</strong> CPUT, industry<br />
involvement is seen as a critical success factor for project-based teaching, <strong>and</strong> students report that it<br />
significantly enhances the learning experience. It is also encouraging to note the contribution of UCT<br />
alumni who themselves experienced the value of real-world industry involvement as students. The<br />
different teaching model used at BHT has led to a lack of industry involvement which makes project<br />
definition more difficult.<br />
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Because of the online study method used at BHT, their project teams closely resemble the definition<br />
of a virtual team, i.e. teams whose members use technology to varying degrees in working across<br />
locational, temporal, <strong>and</strong> relational boundaries to accomplish an interdependent task (Martins, Gilson<br />
& Maynard, 2004). It is interesting to note that the South African project teams, especially at CPUT,<br />
show characteristics similar to virtual teams in large organisations, because of their multi-cultural<br />
make up, their distributed working styles (at home, with the sponsor, in the labs), <strong>and</strong> their limited<br />
face-to-face meeting opportunities due to travel costs, involvement in different courses <strong>and</strong> part-time<br />
work. The effects of proximity among team members fall off rapidly with even very small distances<br />
(Fiol & O’Connor 2005; Kraut, Fussell, Brennan, & Siegel 2002) <strong>and</strong> so team members who live close<br />
to each other but meet irregularly, may experience very similar dynamics to members of virtual teams<br />
interacting across great distances. This is a topic that calls for more research. A comparison<br />
between teams in an online project-based environment versus the virtual team caused by<br />
circumstance in the face-to-face approach at the other two institutions also warrants further<br />
investigation.<br />
An important element in effective mentoring, evident at all three institutions, is the relationship of trust<br />
that must exist between the lecturer as mentor <strong>and</strong> the students, as well as between the members of<br />
the student groups themselves. Without trust, students will not have the confidence to approach the<br />
mentor for guidance <strong>and</strong> be willing to accept the feedback offered. Effective mentoring also needs to<br />
address team harmony, since despite the best efforts of team building, trust between members of the<br />
group can break down <strong>and</strong> undermine the learning opportunity (Huff, Cooper & Jones, 2002).<br />
6. Conclusion<br />
In an attempt to enhance the learning experience of IS/IT students, we have gone beyond st<strong>and</strong>ard<br />
classroom practices <strong>and</strong> used the project-based approach to expose students to the complexities of<br />
the modern-day business environment. After reflecting on our experiences, we conclude that although<br />
the project-based approach places heavy dem<strong>and</strong>s on the lecturer in the roles of teacher, mentor <strong>and</strong><br />
researcher, it simultaneously provides valuable opportunities for personal growth <strong>and</strong> the expansion<br />
of skills <strong>and</strong> knowledge. We identified a number of challenges <strong>and</strong> concerns at the three institutions<br />
<strong>and</strong> also identified areas for further investigation <strong>and</strong> research. Argylis (1991) reminds us that<br />
reflection can help practitioners to realise the wealth of knowledge embedded in their own experience,<br />
<strong>and</strong> to use this embedded knowledge to improve <strong>and</strong> advance their work. This was certainly our<br />
experience of <strong>using</strong> reflection to explore the role of the lecturer as teacher, mentor <strong>and</strong> researcher in<br />
the project-based approach, <strong>and</strong> our respective courses will be enhanced by the insights we have<br />
gained.<br />
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Scott, E., & van der Merwe, N. (2003). Using Multiple Approaches to Assess Student Group Projects. Electronic<br />
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International Journal of Teaching <strong>and</strong> Case Studies, 1(1/2), pp 66 – 83.<br />
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Enterprise <strong>Information</strong> Systems of new Generation<br />
Elena Serova<br />
St. Petersburg State University, Russia<br />
serovah@gmail.com<br />
Abstract: Nowadays, in order to make your business competitive <strong>and</strong> prosperous, it is not enough to rely on<br />
one’s bright mind, intuition or luck. Modern business is a complex multicomponent system, one of the primary<br />
elements of which are <strong>Information</strong> <strong>and</strong> Communication Technologies (ICT). In the today's rapidly changing<br />
competitive business environment, only flexible <strong>and</strong> dynamically developing companies are able to meet<br />
competition, companies that have managed to reduce costs <strong>and</strong> improve business efficiency through the<br />
introduction of advanced information technologies. The use of information technology is an essential component<br />
of a company's strategy to succeed in a rapidly changing world. Such information technologies make it possible<br />
for companies to create information systems for effective communication <strong>and</strong> mutual underst<strong>and</strong>ing among staff<br />
members, as well as to support operational management decision making at all levels. In the future the decisions<br />
in the sphere of information technologies, should allow uniting people, information <strong>and</strong> business processes into a<br />
unified information system in a single complex of technological solutions more effectively. Recent trends in the<br />
development of enterprise information systems (EIS) are associated with the intention to use information<br />
generated within the company, in the external environment to ensure cooperation with other enterprises,<br />
customers <strong>and</strong> partners. There has been a separation of concepts: the traditional Enterprise Resource Planning<br />
(ERP) systems management framework is called back-office, <strong>and</strong> external applications, which appeared in the<br />
system, front-office. The main goal of this work is determination of the main trends of enterprise information<br />
systems development. This paper aims at considering the next main tendencies of EIS development: deepening<br />
the ERP functionality, creating new <strong>and</strong> improve existing control modules of B2B business processes, <strong>using</strong><br />
service-oriented architecture (SOA) <strong>and</strong> new platform solutions, applying knowledge management technologies.<br />
This empirical research also covers Customer Relationship <strong>Management</strong>, Supply Chain <strong>Management</strong> systems<br />
<strong>and</strong> deals with Software as a Service (SaaS) <strong>and</strong> Internet technologies issues.<br />
Keywords: enterprise information systems, enterprise recourse planning systems, customer relations<br />
management systems, supply chain management systems<br />
1. Introduction<br />
Although each enterprise is unique in its financial <strong>and</strong> economic activities, there are a number of<br />
problems common to all enterprises. These include the management of material <strong>and</strong> financial<br />
resources, procurement, marketing <strong>and</strong> much more. Enterprise Resource Planning systems provide<br />
comprehensive management of key aspects of financial, industrial <strong>and</strong> commercial activity of<br />
enterprises. These systems provide managers with complete <strong>and</strong> timely information for management<br />
decisions <strong>and</strong> ensure effective data exchange with business partners.<br />
One possible solution to this problem is the implementation <strong>and</strong> use of Enterprise <strong>Information</strong><br />
Systems which have been rapidly developing in recent years. In industrialized countries, despite<br />
much more favorable options for ICT application, issues of choice <strong>and</strong> implementation of modern<br />
information systems <strong>and</strong> tools, that meet market requirements <strong>and</strong> strategic business objectives, are<br />
also in the spotlight. It should also be noted that the focus has shifted towards the development of<br />
external information infrastructure of a company <strong>and</strong> continue to improve the class of intelligent<br />
information technologies <strong>and</strong> knowledge management systems.<br />
Today in the publications on the topic of business efficiency <strong>and</strong> competitiveness of enterprises, many<br />
names <strong>and</strong> acronyms are mentioned, such as PLM, SCM, CRM, ERP. These names come after the<br />
concepts <strong>and</strong> management techniques used by successful companies. Interest in them is growing in<br />
Russia. Leaders of Russian companies are increasingly turning to the experience of the use of<br />
solutions that help integrate the people, information <strong>and</strong> business processes to effectively manage all<br />
areas of business. The term ERP (Enterprise Resource Planning - ERP), is one of the key issues in<br />
this series of current concepts. What is ERP today, what place it occupies in a number of other<br />
corporate information systems, the basic purpose <strong>and</strong> function, particularly the introduction <strong>and</strong><br />
development trends - these are the main topics examined in this study.<br />
2. Main tendencies of modern enterprise information systems development<br />
Recent trends in the development of enterprise information systems are associated with the intention<br />
to use information generated within the company, in the external environment to ensure cooperation<br />
with other enterprises, customers <strong>and</strong> partners. There has been a separation of concepts: the<br />
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traditional ERP management framework is called back-office, <strong>and</strong> external applications, which<br />
appeared in the system, front-office. One can distinguish the following five major areas that define the<br />
development trends of modern enterprise information systems:<br />
Deepen the functionality of ERP.<br />
Develop industry-specific solutions.<br />
Create new <strong>and</strong> improve existing control modules of intercorporate business processes.<br />
Use service-oriented architecture (SOA - Service Oriented Architecture).<br />
Use new platform solutions.<br />
Apply technologies for knowledge management.<br />
As a rule, when the functional (system software <strong>and</strong> hardware) of EIS of new generation is<br />
mentioned, the following components are kept in mind:<br />
ERP in the usual sense of the term,<br />
System of Customer Relation <strong>Management</strong> (CRM)<br />
Supply Chain <strong>Management</strong> System (SCM),<br />
Analytics <strong>and</strong> decision support, i.e. Business Intelligence (BI),<br />
Data management system, i.e. <strong>Information</strong> <strong>Management</strong> System (IMS), to integrate all<br />
components,<br />
eCommerce <strong>and</strong> collaboration via the Internet.<br />
So a complex SAP Business Suite incorporates four solutions:<br />
For Customer Relation <strong>Management</strong> - SAP CRM;<br />
For managing Supplier Relation <strong>Management</strong> - SAP SRM;<br />
For Product Lifecycle <strong>Management</strong>-SAP PLM <strong>and</strong><br />
For Supply Chain <strong>Management</strong> (SAP Supply Chain <strong>Management</strong> - SAP SCM).<br />
3. Evolution of the customer relationship management concept<br />
At present time, it is typical for companies with established client network-oriented services <strong>and</strong> sales,<br />
to have an advanced external information infrastructure. It is generally accepted that CRM<br />
technologies are most appropriate for such enterprises. However, it can be assumed that such<br />
technologies are also applicable at industrial enterprises, which are also interested in the<br />
manufactured products, although, naturally, the functions of resource planning <strong>and</strong> quality have a high<br />
enough priority.<br />
The concept of CRM has passed a series of stages in its development, each being a technology<br />
(system) aimed at improving work with clients in the following areas:<br />
Contact <strong>Management</strong>,<br />
Sales Force Automation,<br />
Customer Support,<br />
Quality <strong>Management</strong>.<br />
Subsequently, all of these systems have been integrated into a single entity within the concept of<br />
CRM. CRM is a rather broad concept, covering all aspects of working with clients: the control over<br />
sales to marketing campaigns, evaluating their effectiveness <strong>and</strong> customer support.<br />
There are many definitions of CRM in recent publications. CRM in the context of IT is regarded as<br />
specialized software to automate <strong>and</strong> improve business processes in marketing, sales, customer<br />
service <strong>and</strong> support. CRM in procedural terms may be a business process. The very concept of CRM<br />
- Customer Relationship <strong>Management</strong> - defines the basic business functions of such systems. By<br />
PriceWaterhouseGroup definition: «CRM is a strategy aimed at creating long-lasting <strong>and</strong> profitable<br />
relationships with customers by underst<strong>and</strong>ing their individual needs." In terms of managing a<br />
company’s business, the CRM system is arranging the front-office procedures related to the client's<br />
needs, to proactively work with clients. In comparison with the orientation of business to improve the<br />
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back-office work by taking advantage of ERP systems, CRM is aimed at improving sales, not<br />
manufacturing. Such well-known developers of ERP software, like SAP AG, Microsoft, Baan <strong>and</strong><br />
other have long included the CRM-module in their software systems <strong>and</strong> tried to catch up with Siebel<br />
(Oracle developer), which owns more than half the market of CRM-software.<br />
The CRM-systems are divided into operational, analytical <strong>and</strong> collaborational (systems of<br />
cooperation, interaction).<br />
The main task of CRM is increasing the efficiency of business processes, aimed at attracting <strong>and</strong><br />
retaining customers, i.e. marketing, sales, service <strong>and</strong> maintenance.<br />
4. An implementation strategy <strong>and</strong> the main trends in the CRM concept<br />
development<br />
Speaking about the implementation of customer-centric business strategy, it is necessary to focus<br />
attention on the fact that CRM is not just a set of technology tools, software tools appear here only as<br />
one component of this approach. In the first place, the implementation of the CRM concept is a<br />
defined systematic approach to a company activity. To improve business performance by<br />
implementing CRM-system, one must start with an analysis <strong>and</strong> possible subsequent re-engineering<br />
of business processes.<br />
According to analysts, the main causes of unsuccessful projects during the introduction of CRMsystems<br />
are the lack of integration of communication channels, lack of re-engineering processes <strong>and</strong><br />
inability to provide customers with real benefits <strong>and</strong> rewards.<br />
In general, CRM implementation strategy should be based on the following interrelated points:<br />
Customer-oriented company policy should serve as a basis for the introduction <strong>and</strong> subsequent<br />
adaptation of the system;<br />
The level of technological support is defined by business goals;<br />
Structure of IT resources <strong>and</strong> implementation stages are given detailed business tasks distributed<br />
in time.<br />
Exp<strong>and</strong>ed CRM-system may include a variety of modules, or use information from other applications<br />
<strong>and</strong> databases available at the company. However, maximization of the value of each customer, is<br />
achieved mainly through three elements of marketing strategy: organization of integrated marketing<br />
communications channels, development of programs that stimulate dem<strong>and</strong> <strong>and</strong> creation of products<br />
that meet the needs of clients. Accordingly, the most important technological components of the<br />
CRM-system are the following: the subsystem of interactive with customers, monitoring current<br />
operations, as well as database products <strong>and</strong> analytical modules.<br />
One of the main trends of the CRM concept development is the fact that the majority of CRM-products<br />
are considered as an additional element in a company information infrastructure that realizes a<br />
particular function, <strong>and</strong> integrated into it. It is worth emphasizing one more very important point: it is<br />
impossible to consider CRM only as a project to introduce IT technology. Underestimating the role of<br />
proper organization of business processes <strong>and</strong> changing organizations cultural environment will<br />
inevitably lead to failures of implementation. The company must determine - what should be done to<br />
make the business processes conform to the principles of CRM.<br />
Another trend of CRM in terms of functionality is a shift in focus from operational to analytical software<br />
<strong>and</strong> then to collaborational. There is a growing dem<strong>and</strong> for the analytical capabilities of systems, such<br />
as marketing analytics: the analysis of consumer profile, modeling customer behavior, planning<br />
advertising campaigns, etc.<br />
The main advantages that arise from a company that has chosen CRM as a core business strategy<br />
are the following:<br />
Increased sales. Average - 10% increase in annual sales per sales representative in the initial<br />
three years after the implementation of the system. This is due to more efficient sales system that<br />
allows sales representatives to spend more time on the client <strong>and</strong> carry it more efficiently <strong>and</strong> with<br />
more effective monitoring system.<br />
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Increase in percentage of deals won. Average - 5% per annum during the initial three years after<br />
the implementation of the system. Increase in the percentage of deals won due to the fact that<br />
<strong>using</strong> the system (for example, <strong>using</strong> the st<strong>and</strong>ard procedure of training a client). You can screen<br />
out undesirable transactions in the earlier stages of the sales.<br />
An increase in margin. Average - 1.3% on the transaction during the initial three years after the<br />
implementation of the system. Increase in margin due to a better underst<strong>and</strong>ing of customer<br />
needs, higher levels of customer satisfaction, <strong>and</strong> as a consequence of a lesser need for<br />
additional discounts.<br />
Improved customer satisfaction. Average - 3% per annum during the initial three years after the<br />
implementation of the system. Improved customer satisfaction is due to the fact that customers<br />
consider a company focused on solving their specific problems <strong>and</strong> see them more attentive to<br />
their needs.<br />
Reduction of administrative costs on sales <strong>and</strong> marketing. Average - a decline of 10% per annum<br />
during the initial three years after the implementation of the system. Firstly, automation of routine<br />
processes results in reduce cost. Secondly, the system allows to define more precisely targeted<br />
customer segments <strong>and</strong> underst<strong>and</strong> their needs <strong>and</strong> to customize products <strong>and</strong> services for these<br />
segments. In this case it isn’t necessary to disseminate information about all services available to<br />
all customers.<br />
5. Supply chain management<br />
SCM (Supply Chain <strong>Management</strong>) systems are designed for planning, coordination <strong>and</strong> fulfillment of<br />
network-wide supply chain of an enterprise. They allow one to automate <strong>and</strong> manage all stages of the<br />
company supply to control all movement of goods in the company to better meet the dem<strong>and</strong> for the<br />
company's products <strong>and</strong> significantly reduce the costs of logistics <strong>and</strong> procurement.<br />
Typically the following areas, on which Supply Chain <strong>Management</strong> is focused, are identified:<br />
Dem<strong>and</strong> planning;<br />
Supply planning;<br />
Procuring;<br />
Manufacturing;<br />
Storing;<br />
Implementing of orders;<br />
Transporting.<br />
As part of SCM-systems the following two subsystems can be distinguished:<br />
SCP (Supply chain planning). In addition to operational planning, SCP-systems allow to carry out<br />
strategic planning of supply chain structure, i.e. develop plans for the supply chain, to simulate<br />
different situations, to evaluate the level of operations, to compare planned <strong>and</strong> actual values.<br />
SCE (Supply Chain Execution) - execution of supply chains in real time.<br />
SCM-systems can move from the concept of a linear supply chain management to the management<br />
of an adaptive supply network. In the current EIS, they can improve the competitiveness of<br />
enterprises, providing access to partners data <strong>and</strong> resources on supply chain <strong>and</strong> enabling intellectual<br />
adaptation to changing market conditions.<br />
6. Relationship management with suppliers<br />
Many companies try to reduce costs through proper selection of suppliers. SRM (Supplier<br />
Relationship <strong>Management</strong>) systems are designed to control the entire cycle of supply: from strategic<br />
planning to implementation. They allow one to optimize the process of selecting suppliers <strong>and</strong> shorten<br />
procurement cycles. Using the SRM-system, companies can build a stable <strong>and</strong> effective relationships<br />
with suppliers on a long term basis. Combining extensive capabilities for analysis, evaluation <strong>and</strong><br />
ranking of suppliers, taking into account all of the procurement of goods <strong>and</strong> services, aligning of<br />
strategies <strong>and</strong> forecasts of the effectiveness of interaction with suppliers through traditional <strong>and</strong><br />
electronic channels of SRM systems in the EIS next generation, help to identify the best partners, the<br />
most relevant to business requirements.<br />
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7. eCommerce <strong>and</strong> collaboration via the internet<br />
The development of eCommerce <strong>and</strong> establishment of interactive communication among companies<br />
<strong>and</strong> their partners, suppliers <strong>and</strong> customers via the Internet, gave rise to shift in the emphasis on<br />
intercorporate sector in the development of the concept of enterprise information systems. Therefore,<br />
the ERP systems of new generation receive Web-based architecture, which was a significant<br />
difference from the previous generation of EIS. EIS corporate data storage of new generation is<br />
designed for use in geographically dispersed Web-based community. EIS can be fully integrated into<br />
the Internet <strong>and</strong> work with data placed not in the proper repository, as well as support the publication<br />
or subscription, initiated by the client <strong>and</strong> communicate with other applications <strong>using</strong> EAI-adapters<br />
(EAI - Enterprise Application Integration) <strong>and</strong> the language of XML.<br />
The integration of ERP-systems with eCommerce B2B (Business-to-Business) <strong>and</strong> B2C (Business-to-<br />
Customer) is a natural <strong>and</strong> logical step in the development of enterprise resource planning systems.<br />
Creating <strong>and</strong> maintaining the systems of Internet commerce, especially B2B systems sector, is most<br />
effective when those systems are integrated into enterprise-wide business processes <strong>and</strong> integrated<br />
into the ERP-system.<br />
Intercorporate integration at the level of the relationship among ERP-systems suppliers <strong>and</strong><br />
customers is provided through the following B2B eCommerce, i.e. e-distribution, e-procurement <strong>and</strong><br />
e-marketplace. As eCommerce sector, B2B allows direct communication between market players -<br />
producers <strong>and</strong> consumers, then we say that eCommerce becomes an element of the integration<br />
among ERP-systems of interacting firms. Thus, enterprise information systems of new generation are<br />
becoming part of a large, rapidly growing electronic market.<br />
8. Software as a Service (SaaS)<br />
Software as a Service (SaaS) or Software on Dem<strong>and</strong> (SoD) is a business model, which offers the<br />
software to consumers, in which the supplier develops web-based application, installs it <strong>and</strong> manages<br />
it by giving customers access to software via the Internet. Customers pay not for owning the software<br />
itself but for <strong>using</strong> it (through the API, accessible via the web <strong>and</strong> frequently used web-services). It is<br />
the service <strong>and</strong> interface that are purchased (user or program interface), i.e. some functionality<br />
without a rigid adherence to the method of its implementation.<br />
Although any paid-for web-service can be classified as SaaS, often this term refers to software for<br />
business, <strong>and</strong>, as a rule, software on dem<strong>and</strong> is positioned as a cheaper <strong>and</strong> simpler alternative to<br />
internal corporate systems (back-office).<br />
Along with such obvious advantages, such as economic feasibility, the use of common software core,<br />
which allows to plan the computing power <strong>and</strong> reduce the overall amount of resources, there are<br />
several constraints that limit the use of this model.<br />
In the first place, these are the problems associated with information security. The possibility of<br />
information leakage virtually eliminates the use of the concept of SaaS for mission-critical systems,<br />
which are h<strong>and</strong>led as strictly confidential data.<br />
Secondly, the concept of SaaS is ineffective for systems that require a deep individual adaptation for<br />
each customer, as well as innovative <strong>and</strong> customized solutions.<br />
Thirdly, the use of software on dem<strong>and</strong> means being tied to a single developer that hosts the software<br />
on its site <strong>and</strong> carrying out its administration <strong>and</strong> support.<br />
And finally, the limiting factor is the need for SaaS permanent connection to the high speed Internet. It<br />
is worth noting, that with the development of the Internet, the significance of this factor is reduced <strong>and</strong><br />
in many developed countries it should not be considered.<br />
Currently, in many functional classes of EIS one can find systems that support a SaaS model. For<br />
example, for CRM <strong>and</strong> HCM (Human Capital <strong>Management</strong>) systems, the concept of SaaS fits<br />
particularly well, <strong>and</strong> is being actively enforced.<br />
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9. Conclusion<br />
Elena Serova<br />
At present, business technologies, along with information <strong>and</strong> communication technologies, overlap<br />
more <strong>and</strong> more closely. In Russia, as well as worldwide IT became a critical element of the chain of<br />
the product or service design <strong>and</strong> profit. Earnings of companies are growing not only due to a<br />
significant cost reduction <strong>and</strong> management optimization, but also due to the implementation of<br />
modern information technologies <strong>and</strong> systems.<br />
Although each enterprise is unique in its financial <strong>and</strong> economic activities, there are a number of<br />
problems common to all enterprises. These include the management of material <strong>and</strong> financial<br />
resources, procurement, marketing <strong>and</strong> much more. ERP-systems provide comprehensive<br />
management of key aspects of financial, industrial <strong>and</strong> commercial activity of enterprises. These<br />
systems provide managers with complete <strong>and</strong> timely information for management decisions <strong>and</strong><br />
ensure effective data exchange with business partners.<br />
Strengthening of integration processes in the business world leads to the fact that companies are now<br />
involved in the environment that combines inner sphere of the company's business, all business<br />
partners <strong>and</strong> customers. In the future the decisions in the sphere of information technologies, should<br />
allow to integrate people, information <strong>and</strong> business processes into a unified information system in a<br />
single complex of technological solutions more effectively.<br />
References<br />
Axelsson Bjorn, Rozemeijer Frank, Wynstra Finn. (2006) Developing Sourcing Capabilities. Creating strategic<br />
change in purchasing <strong>and</strong> supply management. John Wiley & Sons, USA.<br />
Kazantsev, A.K.,Serova, E.G., Serova, L.S., Rudenko, E.A. (2007) Informatsionno-tekhnologicheskie resursy<br />
rossiyskoy ekonomiki (<strong>Information</strong> technology resources of Russia’s economy), St. Petersburg University<br />
Publishing House, St. Petersburg.<br />
Kumar, V., Reinartz, Werner J. (2006) Customer relationship management: a databased approach, John Wiley &<br />
Sons, Hoboken.<br />
Payne, Adrian. (2006) H<strong>and</strong>book of CRM: achieving excellence in customer management, Elsevier, Amsterdam.<br />
Pearlson Keri E., Saunders Carol S. (2006) Managing <strong>and</strong> Using <strong>Information</strong> Systems. A Strategic Approach.<br />
Third Edition, John Wiley & Sons, USA.<br />
Rainer R., Turban E., Potter Richard E. (2006) Introduction to <strong>Information</strong> Systems: Supporting <strong>and</strong> Transforming<br />
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Serova E.G. (2009) “CRM Concept <strong>and</strong> its place in General Strategy of Company Development”, Proceeding of<br />
the IV Scientific-practical conference “Modern <strong>Management</strong>: problems <strong>and</strong> prospects”, St. Petersburg State<br />
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Serova E.G. (2008) “Modern Approaches of Computer Modeling for Business-tasks decision” Proceedings of the<br />
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Turban, E., Leidner, D., McLean, E., Wetherbe, J. (2008) <strong>Information</strong> technologies for <strong>Management</strong>.<br />
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managers, Elsevier, London.<br />
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Post-ERP Feral System Taxonomy: A Manifestation From<br />
Multiple Case Studies<br />
Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
RMIT University, Melbourne, Australia<br />
sharina.tajulurus@rmit.edu.au<br />
alemayehu.molla@rmit.edu.au<br />
sayyen.teoh@rmit.edu.au<br />
Abstract: The implementation of ERP usually assumed to eliminate department <strong>and</strong> user based information<br />
systems. However, users seek out alternative when they are uncomfortable with prescribed ERP protocol.<br />
Through user’s innovation <strong>and</strong> creativity, they create their own information system or workaround the system to<br />
facilitate their work, thus evolve a phenomenon known as ‘feral systems’. The previous literature has recognised<br />
the impact of feral systems but has not provided a comprehensive framework for classifying the different<br />
manifestations <strong>and</strong> types of feral systems. This paper proposes a feral system classification taxonomy. The<br />
taxonomy is developed through case studies of three organisations- two from an oil <strong>and</strong> gas sector <strong>and</strong> the third<br />
from automotive components manufacturing. The findings indicate feral systems differ in terms of who authorises<br />
them what they are <strong>and</strong> why they exist. Feral system taxonomy is classified into six different type. This study<br />
offers an in-depth exploration of the manifestations <strong>and</strong> development of feral system taxonomy. As such the<br />
study will contribute on how organisations can identify feral system in order to highlight the impact it brings to the<br />
organization <strong>and</strong> how to better manage feral system.<br />
Keywords: user innovation, post- ERP feral systems taxonomy, case studies, SAP<br />
1. Introduction<br />
The implementation of ERP is assumed to eliminate department <strong>and</strong> user based information systems,<br />
yet some studies (Oliver & Romm 2002) believed it is not always the case. Issues such as lack of<br />
trust on ERP system, users resistance to changes, ineffective training methods <strong>and</strong> complexity in<br />
extracting data from ERP system could lead to users’ resistance or refusal of or building way around<br />
to ERP systems (Houghton & Kerr 2006). Thus, users might not necessarily rely totally on the main<br />
system (ERP) sanctioned by the organisation but rather develop their own systems or database to<br />
facilitate their work- a phenomenon known as “feral systems”.<br />
The development of post ERP-feral system may derive from the users’ innovativeness in <strong>using</strong> the<br />
technologies. This could be well explain by the ‘technologies in- practice’ concept (Orlikowski 2000).<br />
Orlikowski (2000) proposed that a practice lens focuses on knowledgeable human action <strong>and</strong> how its<br />
recurrent engagement with a given technology constitutes <strong>and</strong> reconstitutes particular emergent<br />
structures of <strong>using</strong> technology (technologies-in practice). Therefore, the emphasis have been shifted<br />
on given technologies, embodied structures <strong>and</strong> their influence on use to a focus on human agency<br />
<strong>and</strong> enactment of emergent structures in the recurrent use of the technologies. The enactment were<br />
characterised either in term of inertia (where users choose to use technology to retain their way of<br />
doing things), application (where people choose to use the new technology to refine their ways of<br />
doing things) or even change (where people choose to use the new technology to substantially alter<br />
their ways of doing things) (Orlikowski 2000).<br />
A few researchers (Houghton & Kerr 2006; Kerr & Houghton 2008, 2010; Kerr, Houghton & Burgess<br />
2007) have studied feral systems. Nevertheless, the existing post ERP literature has not provided a<br />
comprehensive taxonomy that will help in the classification of feral systems. Given the difficulty of<br />
researching feral systems (see Behrens 2009), the absence of a clear mechanisms for identifying<br />
feral systems makes the building of a cumulative research tradition to explain the causes <strong>and</strong> impacts<br />
of feral system difficult if not impossible. Further, feral systems might not have uniform <strong>and</strong>/or single<br />
manifestation. Rather they might vary in scope, in purpose <strong>and</strong> in their nature.<br />
This paper therefore addresses the above gap by developing a taxonomy that will help in the<br />
identification <strong>and</strong> classification of feral systems. The main research question is “What are the<br />
different manifestations of Feral Systems <strong>and</strong> How could they be classified?” The framework<br />
developed through multiple case studies. From these, we shed light to the feral system <strong>and</strong> ERP<br />
literature through a deep exploration of the conceptualization <strong>and</strong> classification of the ‘feral system<br />
phenomenon’ within ERP environments. This paper also enables managers to recognise the ‘feral<br />
system phenomenon’ that might influence the use of ERP system in the organisation either in a<br />
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Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
positive or negative manner. The remaining part of this paper is organised as follow. Next, a brief<br />
literature provided in the next section. Then, we outline <strong>and</strong> discuss the methodology. Following that,<br />
we describe the cases <strong>and</strong> feral systems in the finding section. The final section concludes the paper<br />
with discussion <strong>and</strong> summary.<br />
2. Background<br />
To conceptualise feral system, we should first define it. Startlingly, there is imprecise definition of feral<br />
system used in the general IS field <strong>and</strong> specific context of ERP research. The review from previous<br />
literature have identified three basic concepts used to define the Post-ERP feral systems – “Feral<br />
systems”, “Workaround systems” <strong>and</strong> “Shadow system”. The definition of the three basic concepts is<br />
illustrated in the above table (Table 1).<br />
Table 1: Summary of feral system conceptualisation<br />
Reference Terminology Definition<br />
Houghton <strong>and</strong> Feral System “An information system (computerized) that is developed by individuals<br />
Kerr (2006)<br />
or group of employees to help them with their work, but is not condoned<br />
by management nor its part of the corporation‘s accepted information<br />
technology infrastructure. Its development is designed to circumvent<br />
existing organizational information system”.<br />
Poelmans Workaround “A coping strategy that deviates from strategies that have been defined<br />
(1999)<br />
System in the work flow system (WFS). End users work around the system to<br />
save the time or efforts or to avoid the limitations of the WFS.”<br />
Behrens <strong>and</strong><br />
Sedera (2004)<br />
Shadow<br />
System<br />
“Systems which replicate in full or in part data <strong>and</strong>/or functionality of the<br />
legitimate system in the organization”.<br />
While feral, shadow <strong>and</strong> workaround systems are sometimes used interchangeably, Houghton <strong>and</strong><br />
Kerr (2006) argue that the feral systems are not similar to workaround. This is because workaround is<br />
created with the intention to bypass a recognized problem <strong>and</strong> to fix the problem temporarily<br />
(Koopman & Hoffman 2003; Poelmans 1999). On the contrary, feral systems are the deliberate<br />
attempts to permanently circumvent a fully functional <strong>and</strong> operationally sound system. Nevertheless,<br />
while all feral systems can be classified as workaround systems, the reverse is not true. As such,<br />
workaround systems become feral systems only when they are user created <strong>and</strong> their usage is<br />
outside the formal information systems. For example, Koopman <strong>and</strong> Hoffman (2003) reported how<br />
end users created a workaround system by modifying input data <strong>and</strong> operations to compensate the<br />
deficiency of a formal system.<br />
One notable observation from the literature is that, the concept of “system” in feral system has not<br />
always been clear. Some authors proposed feral system as ‘system’ or ‘information system’(Behrens<br />
& Sedera 2004; Houghton & Kerr 2006) , while other define it as strategy (Poelmans 1999). The<br />
‘system’ also sometimes refers to a fully functional information system which has been created<br />
outside accepted ERP systems (Behrens 2009; Houghton & Kerr 2006) or the use of personal<br />
software like Microsoft Excel <strong>and</strong> Microsoft Access (Houghton & Kerr 2006; Kerr, Houghton &<br />
Burgess 2007). One thing obvious about the previous studies on feral systems is that there is hardly a<br />
clear framework to identify <strong>and</strong> classify feral systems. In order to conceptualise feral system definition,<br />
there are few relevant questions to illustrate its concept. These questions surround issues such as:<br />
Who sanctions them? What it is? Why it is exists? Answers from these questions will chart a direction<br />
to the development of feral system taxonomy. Thus, this study is the first to use both previous studies<br />
<strong>and</strong> case evidence to define feral system classification taxonomy.<br />
3. Research method<br />
This research utilised qualitative research approach <strong>using</strong> exploratory multiple case studies.<br />
Exploratory case study is useful for studying complex phenomenon in their natural setting <strong>and</strong><br />
appropriate for new topic areas (Eisenhardt 1989). Four large organisations from Malaysia that have<br />
implemented ERP systems were approached. Three agreed to participate, which we will refer here as<br />
Case A, B <strong>and</strong> C. Data were collected through face-to-face interviews with 30 interviewees over the<br />
period of 3 months from 15 th March 2010 until 15 th June 2010. Each interview lasted between 1 hour<br />
to 1 ½ hours. The interview questions were open ended in nature with additional questions exp<strong>and</strong>ing<br />
on emerging themes. Table 2 below provides a summary of interviewees’ profile.<br />
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Table 2: Summary of interviewee profile<br />
Cases No. of<br />
Participants<br />
Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
A 13 -Finance <strong>and</strong> Planning<br />
-Engineering <strong>and</strong> Services<br />
-Operations<br />
-Operating Performance &<br />
Improvement<br />
-Human Resource<br />
-Supply Chain <strong>Management</strong><br />
B 4 -Finance <strong>and</strong> Planning<br />
-Human Resource<br />
-SupplyChain <strong>Management</strong><br />
C 13 -MIS/SAP<br />
Departments Covered Interviewees’ Job Titles Participants<br />
Code<br />
-Finance<br />
-Production Planning<br />
Control<br />
-Purchasing Vendor<br />
-Manager (1), Executive (2)<br />
-Senior manager (1) Executive<br />
(1)<br />
-Manager (1), Executive (1)<br />
-Executive (1), Clerk (1)<br />
-Executive (1), Supervisor (1)<br />
-Manager (1), Buyer (1)<br />
-Executive (1), Clerk (1)<br />
-Clerk (1)<br />
-Executive (1)<br />
-Senior manager (1), Manager<br />
(1) , Executive (2)<br />
- Manager (1), Assistant<br />
manager<br />
(2) ,Supervisor (1)<br />
- Executive (1), Supervisor (1),<br />
Clerk (1)<br />
- Ass. Manager (1), Clerk (1)<br />
M1,E2,E3<br />
M4,E5<br />
M6, E7<br />
E8, C9<br />
E10, S11<br />
M12, B13<br />
E14,C15<br />
C16<br />
E17<br />
M18, M19, E20,<br />
E21<br />
M22,M23,<br />
M24,S25<br />
E26,S27,C28<br />
M29, C30<br />
Data analysis was performed <strong>using</strong> the grounded theory method approach proposed by Strauss <strong>and</strong><br />
Corbin (1998). We start with the transcription of the interviews. Since the interviews were conducted<br />
in mixed language (English <strong>and</strong> Bahasa Malaysia), the data was translated into English. This process<br />
carried out to facilitate the analysis process as well as to provide consistency in data transcription. To<br />
ensure validity, a third party verified the translation of interviews from Bahasa Malaysia to English.<br />
Open coding was used to analyse the data as suggested by Strauss <strong>and</strong> Corbin (1998). Coding is the<br />
process of identifying justificatory statements <strong>and</strong> developing conceptual categories from them. By<br />
<strong>using</strong> the open coding, categories along with their properties <strong>and</strong> dimension extracted from the raw<br />
data. The process of coding is an iterative process where we detect the expressive statement in data<br />
<strong>and</strong> form the relation between these.Additionally, it is also appropriate to revise some coding<br />
categories during the analysis stage, which require us to revisit the data that that already coded.<br />
4. Case studies<br />
4.1 Case description background<br />
The following table outline the summary of case profile<br />
Table 3: Summary of case profile<br />
Name Area Founded SAP System <strong>and</strong> Modules Systems Authorisation<br />
Case A Subsidiary 1997 SAP R/3<br />
IT Department,<br />
of leading Oil<br />
Material <strong>and</strong> <strong>Management</strong> , SAP Business Support,<br />
<strong>and</strong> Gas<br />
Financial <strong>Information</strong> <strong>and</strong> Controlling Corporate <strong>Information</strong><br />
Company in<br />
(FICO)<br />
Development Unit<br />
Malaysia<br />
Human Resource <strong>Information</strong> System<br />
(HARIS),<br />
Plant <strong>and</strong> Maintenance<br />
(CIDU)<br />
Case B Subsidiary 1999 SAP R/3<br />
IT Department Unit,<br />
of leading Oil<br />
Material <strong>and</strong> <strong>Management</strong> , SAP Business Support,<br />
<strong>and</strong> Gas<br />
Financial <strong>Information</strong> <strong>and</strong> Controlling Corporate <strong>Information</strong><br />
Company in<br />
(FICO)<br />
Development Unit<br />
Malaysia<br />
Human Resource <strong>Information</strong> System<br />
(HARIS),<br />
Plant <strong>and</strong> Maintenance<br />
(CIDU)<br />
Case C Automotive 1991 SAP ECC 5<br />
<strong>Management</strong> <strong>Information</strong><br />
Components<br />
Financial (FI),<br />
System (MIS) & SAP<br />
Manufacturer<br />
Controlling (CO),<br />
Material <strong>Management</strong> (MM),<br />
Production <strong>and</strong> Planning (PP) <strong>and</strong><br />
Sales <strong>and</strong> Distribution (SD)<br />
department<br />
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4.2 Description of feral systems<br />
Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
Thirty interviews were conducted across all departments that used SAP system in the three case<br />
companies (A, B <strong>and</strong> C). We found the feral systems mainly in the finance departments of each case<br />
organisation. Examples are extensive use Microsoft Excel in all three cases, Invoice Tracking System<br />
(Case A), <strong>and</strong> Online Bank Reconciliation (Case A) .Below we describe each of these feral systems.<br />
4.2.1 Use of information technology<br />
A number of instances of Microsoft Excel use have been found in all three cases to overcome either<br />
the limitation or the shortcoming of ERP system in areas such as preparation of petty cash, cashbook<br />
<strong>and</strong> creditor listing <strong>and</strong> report customisation. For example, a Buyer in the Supply Chain <strong>Management</strong><br />
department of case A heavily relies on Excel to produce customised reports. An Executive from the<br />
Engineering <strong>and</strong> Service department of Case A describes how the existing legitimate system is<br />
unable to provide detailed report. That’s why Excel is used to supplement reporting functionalities of<br />
the ERP system:<br />
“You cannot generate report from SAP. The SAP purpose is mainly to key in the data<br />
<strong>and</strong> also attach the report, so that other people could use it for future reference. You can<br />
just click this button (in excel) to know the history, let’s say on the equipment failure <strong>and</strong><br />
then, you key-in into the SAP [...]. SAP is a system where you can gather all the<br />
information that you have <strong>and</strong> store in one particular system. However, detail reports<br />
need to be done separately, in Excel or others.” (E3)<br />
In some other cases, excel is used to duplicate the work in SAP. For example, the Assistant Manager<br />
of Finance department in Case C indicated that their use of Excel instead of SAP to prepare Journal<br />
Voucher duplicates the function of SAP. Another example from Case C is in the area of petty cash<br />
preparation.<br />
“I try to reduce the duplication of my work. It is quite difficult since I need to prepare in<br />
excel, then I need to compile the SAP report <strong>and</strong> check whether it is the same or not.<br />
What I meant with the duplication is referred to the redundancy of the work. Like, for<br />
Petty Cash claim, when I receive the claim from our staff, I need to post it into excel<br />
immediately. I do not need to compile it until end of the month. Then, I need to check<br />
petty cash from excel whether it tale with the system (SAP).” (S25)<br />
Microsoft excel is also used to supplant the function of ERP system. An example is the creditors<br />
ageing used by the Purchasing <strong>and</strong> Vendor department of Case C. Although the creditor ageing is<br />
usually generated through SAP system, in this department, the clerk prepares her own creditors<br />
ageing in Excel, which leads to two versions of truth.<br />
“We use excel to monitor the supplier status. Yes, we can use SAP for that purpose but<br />
we need to go through various report but in excel, I use colour code (from the excel<br />
template) to make it easier to identify [...]. From what I know, the creditors ageing from<br />
the system do not provide me with detail analysis. For example, what is the actual<br />
problem with the specific Purchase Order or why it is hanged?” (C30)<br />
4.2.2 Invoice tracking system<br />
Invoice Tracking System is another example of feral information system found in Case A. An<br />
individual from the Finance Department developed this system. The system has been in use since<br />
2005 <strong>and</strong> was developed for the purpose of tracking <strong>and</strong> monitoring vendors’ payment. Either the IT<br />
Department Unit or SAP Business Support Unit, or Corporate <strong>Information</strong> Development Unit of Case<br />
A. did not sanction the creation <strong>and</strong> use of this system. Thus, IPerintis is not responsible in the<br />
maintenance <strong>and</strong> upgrading of the Invoice Tracking System. Like Bank Reconciliation, the system<br />
duplicates a functionality of SAP, specifically, that of invoice parking:<br />
“Invoice Tracking System is used to monitor outst<strong>and</strong>ing payments to vendors. So,<br />
whenever, there are invoices yet to be approved, we put them there. There is a similar<br />
function in SAP for tracking invoices (M1)<br />
Clerks from Finance <strong>and</strong> Planning Department key-in invoice details in the Invoice Tracking System<br />
while at the same time ‘parking’ the same invoice in the SAP system. They do this process<br />
simultaneously. An executive of Finance <strong>and</strong> Planning department explains this:<br />
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Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
“Invoice will be keyed-in into the Invoice Tracking System <strong>and</strong> at the same time we will<br />
enter into the ‘park document' function of SAP. We are doing it simultaneously. From the<br />
park document, we can generate reports. It provides record that shows pending invoice<br />
for payment. Once the issue is settled, we have to remove the invoice from the park <strong>and</strong><br />
post it to the actual cost of the system.” (E3)<br />
4.2.3 Bank reconciliation<br />
Bank Reconciliation is a web based system that is created outside the accepted ERP system<br />
environment by an individual from Finance Department in Case A. Either the IT Department Unit, or<br />
SAP Business Support Unit or Corporate <strong>Information</strong> Development Unit (CIDU) did not sanction the<br />
development <strong>and</strong> use of Bank Reconciliation. Therefore, the maintenance <strong>and</strong> upgrading process of<br />
Bank Reconciliation system is not supported by the IPerintis (the third party that is responsible for<br />
Case A’s information systems management). The system duplicates a functionality of SAP. Although<br />
the Bank Reconciliation function is already available in the SAP system, Finance <strong>and</strong> Planning staffs<br />
prefer to use the Online Bank Reconciliation system. According to the Manager of Finance <strong>and</strong><br />
Planning (M1) of case A:<br />
“When I came here, I thought that everybody is <strong>using</strong> the SAP bank reconciliation which<br />
is one of the functions in Accounts Payable. In SAP, the bank reconciliation function<br />
reads from the tape <strong>and</strong> runs the bank reconciliation but this is not the case in A. We<br />
prepare the bank reconciliation online. I was very surprised at first. When I came here,<br />
the practice is already like that. It is because of the previous user, the people before us.”<br />
According to the Finance <strong>and</strong> Planning Executive (E2), users prefer the feral bank reconciliation<br />
system because “The online version is much simpler. It is very simple since our transaction is not that<br />
much, but the SAP function is there. I think we should be <strong>using</strong> it.” However, the use of this system<br />
<strong>and</strong> the problem it creates (such as the unsuitability of the data codes created <strong>using</strong> the Bank<br />
Reconciliation system for SAP) has been noticed <strong>and</strong> Case A is planning to phase out this feral<br />
system. As noted by the Manager of Finance <strong>and</strong> Planning Department:<br />
“We have the intention to fully utilise the SAP function in the future but of course, we<br />
have to do the clean up before we run the bank reconciliation through SAP. We need to<br />
clean up especially on the SAP account codes. Otherwise, there will be many line items<br />
that will not be reconciled.” (M1)<br />
5. Discussion: Feral system taxonomy<br />
The coding <strong>and</strong> analysis of the interviews has identified three basic dimensions that can be used in<br />
the classification of feral systems. These are the “type of application”, “sanction” <strong>and</strong> “purpose of the<br />
application”. These dimensions correspond to the questions of what is developed, who authorise the<br />
development <strong>and</strong> use <strong>and</strong> why the system is created respectively. The following section discusses<br />
each of these dimensions.<br />
5.1 Sanction <strong>and</strong> ownership (who authorises them?)<br />
In describing feral systems legitimacy play a major role. Legitimacy refers to whether the “system”<br />
created is sanctioned or not by the organization. Because end users to replicate some functionalities<br />
of legitimate system (such as ERP) in an organisation create feral systems (especially feral<br />
information systems), they are not condoned or approved by the management. Sanctioning of system<br />
is also associated with system compliance. Compliance is where a user interacts with systems in the<br />
prescribed manner (Ferneley & Sobreperez 2006). Users comply with the sanctioned information<br />
system such as ERP due to its legality (legitimacy). In such instance, the systems existence is<br />
authorised by the management (or it’s designate such as IT executives) <strong>and</strong> the system is part of an<br />
organisation’s accepted information technology infrastructure. The creation of feral system is usually<br />
beyond an organisation’s accepted information systems. Thus, feral system existence may indicate<br />
users’ uneasiness towards the corporate approved information systems such as ERP system (Kerr,<br />
Houghton & Burgess 2007) or lack of control from the management. For instance, in a situation where<br />
a control system is being well maintained in an organisation, there would be little evidence of feral<br />
system found <strong>and</strong> vice-versa (Houghton & Kerr 2006; Kerr, Houghton & Burgess 2007).<br />
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Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
5.2 Type of feral system applications (what it is?)<br />
The type of application refers to what constitutes the “system” in feral systems. The analysis reveals<br />
three general types of feral systems ‘feral information system’ ‘feral data’ <strong>and</strong> ‘feral use of information<br />
technology’. Feral information system refers to an information system or data created or used by<br />
individual or group which intend either to supplant or to supplement a formal organisational<br />
information system. Feral information systems are created as comprehensive or complete systems<br />
with many elements that are highly interrelated <strong>and</strong> interconnected. The unique characteristics of feral<br />
information systems are that they are reasonably well built, have some degree of sophistication in<br />
their functionality <strong>and</strong> provide mechanisms for inputting data, processing it <strong>and</strong> extracting output.<br />
Feral information system usually is a non-sanctioned system <strong>and</strong> operates outside an ERP system<br />
environment. The Bank Reconciliation <strong>and</strong> Invoice Tracking Systems described earlier are example of<br />
feral information system. Other examples of feral information systems reported in the literature include<br />
Webfuse, a learning management system that provides most functionalities of commercial learning<br />
management systems (Behrens, 2009).<br />
The second type of feral system is ‘Feral use of <strong>Information</strong> Technology’. It refers to the use of<br />
<strong>Information</strong> Technology by end users to either supplant an ERP system function or supplement the<br />
limitations of an ERP system. For instance, this is demonstrated through Microsoft Excel used for the<br />
customisation of reporting <strong>and</strong> petty cash preparation as described above. Example from the literature<br />
includes Kerr, Houghton et al.(2007) who reported how Microsoft Excel <strong>and</strong> Access are used for<br />
planning outside SAP system <strong>and</strong> how that led to little or no visibility of the plan to the organisation<br />
<strong>and</strong> its being not reflected in the corporate plan. Ignatiadis <strong>and</strong> N<strong>and</strong>hakumar (2009) also report a<br />
feral use of IT (Excel) for report generation; further processing of data produced by SAP <strong>and</strong> as a<br />
medium of communication which has resulted in portraying a false picture of the company.<br />
Feral <strong>Information</strong> System <strong>and</strong> Feral Use of IT can lead to the third type of feral system which we refer<br />
to as ‘Feral Data’. Feral data refers to data that is stored outside the formal system (such as ERP).<br />
The Petty Cash described earlier are examples of Feral Data. In the literature, it is reported that users<br />
often extract data from the formal system (ERP) <strong>and</strong> made necessary adjustment or modification in<br />
order to suit with their needs (Kerr & Houghton 2008; Kerr, Houghton & Burgess 2007). However,<br />
when such users fail to integrate it back into the formal system for operational, forecasting or<br />
knowledge management purposes, this can lead to the data being out of sync with formal systems<br />
<strong>and</strong> become feral data. Kerr <strong>and</strong> Houghton (2010) have discussed an example of a feral data “grass<br />
stock” which is different from the actual data reported in ERP system <strong>and</strong> which led to inaccurate<br />
forecast <strong>and</strong> business analytics output (Kerr & Houghton 2010).<br />
5.3 The purpose of the artefact (why it exists?)<br />
Based on our case studies, two different purposes of feral systems can be identified. We refer to<br />
these purposes as supplant <strong>and</strong> supplement. Supplant refers to those feral systems that are<br />
developed to replace some, if not most, of the functionalities of the existing ERP system. There are<br />
two main elements to supplanting- circumvention or duplication. Circumvention means ‘getting<br />
around’ the ERP systems (Houghton & Kerr 2006). Circumvention occurs due to the stringent rules<br />
<strong>and</strong> complexities of ERP systems. For example, Bendoly <strong>and</strong> Cotteleer’s (2008) case studies that<br />
examine the circumvention of IT-systems rules following implementation of ERP systems indicate that<br />
users of IT systems may “retain strong intentions to circumvent systems in the presence of perceived<br />
task-technology misfit” (p. 23). Duplication on the other h<strong>and</strong> refers to the act of repeating either fully<br />
or partly the data <strong>and</strong>/or functionality of ERP systems. It means that the information system, data or<br />
use of technology is created for replicating some of the functionalities of ERP systems.<br />
On the other h<strong>and</strong>, supplement feral systems refer to the use of feral information systems or data, or<br />
IT to overcome the lack of functions in installed ERP systems. The supplementing act usually occurs<br />
due to gap between stakeholders’ requirements <strong>and</strong> ERP provisions. As described above, users rely<br />
in office automation technologies such as Microsoft Excel <strong>and</strong> Microsoft Excess when ERP systems<br />
do not provide them with the right tool to undertake their task. Our interviewees indicate that<br />
spreadsheets are suitable for creating reports <strong>and</strong> analysing historical data in situations where the<br />
st<strong>and</strong>ard reporting functionality of the ERP system is insufficient or poor.This implies that supplement<br />
feral systems can be associated with the positive effect of feral system for their host. Some of these<br />
positive effects include providing information <strong>and</strong> functionality that meets the needs of the individual<br />
department within the organisation, capacity to foster creativity, perceived innovativeness qualities<br />
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Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
<strong>and</strong> ability to bring stability <strong>and</strong> order (Behrens 2009; Behrens & Sedera 2004). The combination of<br />
the three dimensions of feral systems identified from the case studies, that is: who authorises them<br />
(sanction <strong>and</strong> ownership), what they are (types of application), why they exist (purpose of application)<br />
<strong>and</strong> led us to develop the post-ERP feral system taxonomy. However, since all feral systems are nonsanctioned,<br />
the taxonomy classifies feral systems into six (6) different types as presented in Table 4<br />
below.<br />
5.4 Summary<br />
This study was set out to address two research questions, “What are the different manifestations of<br />
Feral Systems <strong>and</strong> how could they be classified?” For the first question, the study showed that feral<br />
systems could manifest either in the form of a fully developed information system, or data or use of IT.<br />
Regarding the second question, three dimensions – type of application, sanction <strong>and</strong> purpose are<br />
identified as the basis for classifying feral systems. Below we highlight the main contributions of our<br />
study.<br />
Table 4: Post-ERP feral system taxonomy<br />
Type<br />
Types of Application Purpose of<br />
Application<br />
Feral<br />
Inf<br />
o<br />
Sy<br />
st<br />
e<br />
m<br />
Feral<br />
D<br />
a<br />
t<br />
a<br />
Feral<br />
Us<br />
e<br />
of<br />
Technolo<br />
gy<br />
Suppl<br />
a<br />
-<br />
n<br />
t<br />
Supplem<br />
e<br />
nt<br />
Description of Types<br />
1 X X Feral <strong>Information</strong><br />
System created<br />
by end user to<br />
supplant some of<br />
the functionality<br />
of ERP system<br />
<strong>and</strong> not<br />
sanctioned by<br />
authorised IT<br />
2<br />
body.<br />
X X Feral <strong>Information</strong><br />
System created<br />
by end user to<br />
supplement<br />
some of the<br />
functionality of<br />
ERP system <strong>and</strong><br />
not sanctioned<br />
by authorised IT<br />
body.<br />
3 X X Feral data created by<br />
end user to<br />
supplant some of<br />
the functionality<br />
of ERP system<br />
<strong>and</strong> not<br />
sanctioned by<br />
authorised IT<br />
body.<br />
4 X X Feral data created by<br />
end user to<br />
supplement<br />
some of the<br />
functionality of<br />
ERP system <strong>and</strong><br />
not sanctioned<br />
by authorised IT<br />
body.<br />
464<br />
Example from case<br />
studies <strong>and</strong>/ Or<br />
Previous Studies<br />
Bank Reconciliation,<br />
Invoice Tracking<br />
system<br />
(case studies)<br />
MyInfocom or Webfuse<br />
Response<br />
(Behrens 2009; Jones<br />
et al. 2004)<br />
Dairy (Kerr, Houghton<br />
& Burgess 2007)<br />
Grass Stock (Kerr &<br />
Houghton 2010)<br />
Moving Average Price,<br />
Source List<br />
(Ignatiadis &<br />
N<strong>and</strong>hakumar<br />
2009)
Type<br />
Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
Types of Application Purpose of<br />
Application<br />
Feral<br />
Inf<br />
o<br />
Sy<br />
st<br />
e<br />
m<br />
Feral<br />
D<br />
a<br />
t<br />
a<br />
Feral<br />
Us<br />
e<br />
of<br />
Technolo<br />
gy<br />
Suppl<br />
a<br />
-<br />
n<br />
t<br />
Supplem<br />
e<br />
nt<br />
Description of Types<br />
5 X X Feral use of<br />
technology by<br />
end user to<br />
supplant some of<br />
the functionality<br />
of ERP system<br />
<strong>and</strong> not<br />
sanctioned by<br />
authorised IT<br />
body.<br />
6 X X Feral use of<br />
technology by<br />
end user to<br />
supplement<br />
some of the<br />
functionality of<br />
ERP system <strong>and</strong><br />
not sanctioned<br />
by authorised IT<br />
body.<br />
Example from case<br />
studies <strong>and</strong>/ Or<br />
Previous Studies<br />
Petty Cash,<br />
Journal Voucher,<br />
Creditors Ageing,<br />
Sales Order (case<br />
studies)<br />
<strong>Management</strong> Report ,<br />
Planning, Service<br />
Order (case<br />
studies)/<br />
(Ignatiadis &<br />
N<strong>and</strong>hakumar<br />
2009; Kerr,<br />
Houghton &<br />
Burgess 2007)<br />
From the theoretical perspective, this paper contributes to ERP <strong>and</strong> IS research by developing<br />
comprehensive feral system taxonomy. Using examples from multiple cases, we arrive at the post–<br />
ERP feral system taxonomy that explains different classification <strong>and</strong> manifestation of feral system into<br />
six different classes. By citing examples from previous literature, we have shown that the developed<br />
taxonomy has validity. Although previous study have identified “feral systems” concept like Behrens &<br />
Sedera (2004) , Houghton <strong>and</strong> Kerr (2006), Kerr, Houghton et al (2007), Kerr <strong>and</strong> Houghton (2010),<br />
this study extends the feral system conceptualisation in a wider scope by classifying them in a more<br />
comprehensive approach. This will facilitate future research in this area.<br />
On the practical point side, this paper could facilitate managers to recognise the ‘feral system<br />
phenomenon’ that might influence the use of ERP system in the organisation either in a positive or<br />
negative manner. For instance, supplement feral systems can provide a positive outcome in terms of<br />
providing information <strong>and</strong> functionality that meets the needs of the individual department within the<br />
organisation, the capacity to foster creativity, perceived innovativeness qualities <strong>and</strong> ability to bring<br />
stability <strong>and</strong> order (Behrens 2009; Behrens & Sedera 2004). Thus managers can tolerate, even if not<br />
encourage, such systems. On the other h<strong>and</strong>, supplant feral systems can have negative impacts as<br />
they can undermine installed ERP systems. In addition, such systems can increase workload, create<br />
redundant work, <strong>and</strong> raise data integrity <strong>and</strong> quality problem (Behrens & Sedera 2004). Thus<br />
managers need to carefully manage <strong>and</strong> control feral system.<br />
References<br />
Behrens, S 2009, 'Shadow Systems: The Good, The Bad <strong>and</strong> The Ugly', Communication of the ACM, vol. 52, no.<br />
2, pp. 124-9.<br />
Behrens, S & Sedera, W 2004, 'Why Do Shadow Systems Exists after an ERP implementation? Lesson From a<br />
Case Study', paper presented to Association for <strong>Information</strong> System<br />
Bendoly, E & Cotteleer, MJ 2008, 'Underst<strong>and</strong>ing behavioural sources of process variation following enterprise<br />
system deployment', Journal of Operations <strong>Management</strong>, vol. 26, no. 1, pp. 23-44.<br />
Eisenhardt, KM 1989, 'Building Theories from Case Study Research', Academy o/<strong>Management</strong> Review, vol. 14,<br />
no. 4, pp. 532-50.<br />
Ferneley, EH & Sobreperez, P 2006, 'Resist, comply or workaround? An examination of different facets of user<br />
engagement with information systems ', European Journal of <strong>Information</strong> Systems, vol. 15, no. 4, pp. pp.<br />
345-56<br />
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Sharina Tajul Urus, Alemayehu Molla <strong>and</strong> Say Yen Teoh<br />
Houghton, L & Kerr, D 2006, 'A study into the creation of feral information systems as a response to an ERP<br />
implementation within the supply chain of a large government-owned corporation.', Int .J. Internet <strong>and</strong><br />
Enterprise <strong>Management</strong>, vol. 4, no. 2.<br />
Ignatiadis & N<strong>and</strong>hakumar, J 2009, 'The Effect of ERP system workarounds on organisational control',<br />
Sc<strong>and</strong>inavian Journal of <strong>Information</strong> Systems, vol. 21, no. 2, pp. 59-09.<br />
Jones, D, Behrens, S, Jamieson, K & Tansley, E 2004, 'The Rise <strong>and</strong> Fall of Shadow System: Lesson For<br />
Enterprise System Implementation', paper presented to Association for <strong>Information</strong> Systems (ACIS 2004).<br />
Kerr, D & Houghton, L 2008, 'Feral Systems: The likely Effect on Business Analytics Functions in an Enterprise<br />
Resource Planning System Environment', paper presented to 19th Australasian Conference on <strong>Information</strong><br />
Systems, Christchurch, New Zeal<strong>and</strong>, 3-5 December 2008.<br />
---- 2010, 'Just In Time or Just in Case: A Case Study on the Impact of Context in ERP Implementation ',<br />
Australasian Journal of <strong>Information</strong> Systems, vol. 16, no. 2.<br />
Kerr, D, Houghton, L & Burgess, K 2007, 'Power Relationship that lead to the development of Feral Systems',<br />
Australasian Journal of <strong>Information</strong> Systems, vol. 14, no. 2, pp. 141-52.<br />
Koopman, P & Hoffman, RR 2003, 'Work-arounds, Make-work <strong>and</strong> Kludges', Human Centered Computing.<br />
Oliver, D & Romm, C 2002, 'ERP system in Universities: Rationale Advanced of thier Adoption ', in Enterprise<br />
Resource Planning: Global Opportunities <strong>and</strong> Challenges, Idea Group Publishing, Hesley PA, pp. 44-60.<br />
Orlikowski , W 2000, 'Using Technology <strong>and</strong> Constituting Structures: A Parctice Lens for Studying Technology in<br />
Organizations', Organization Science, vol. 11, no. 4, pp. 404-28.<br />
Poelmans, S 1999, 'Workarounds <strong>and</strong> Distributed Viscosity in Workflow System: A Case Study', SIGGGROUP<br />
Bulletin, vol. 20, no. 11, pp. 11-2.<br />
Strauss, A & Corbin, J (eds) 1998, Basics of Qualitative Research: Technique <strong>and</strong> Procedures Developing<br />
Grounded Theory, Second edn, SAGE Publications Ltd, California.<br />
466
Open Source Disease Control Software Development: The<br />
Role of Patients<br />
Jose Teixeira 1 <strong>and</strong> Reima Suomi 2<br />
1<br />
Turku Center for Computer Science, Turku, Finl<strong>and</strong><br />
2<br />
Turku School of Economics, Turku, Finl<strong>and</strong><br />
Jose.Teixeira@tse.fi<br />
Abstract: Healthcare information systems are traditionally developed in institutional organizations such as<br />
medical providers’ research labs, software houses <strong>and</strong> hospitals. IT <strong>and</strong> medical professionals are the perpetual<br />
analysts <strong>and</strong> developers of most health-care information systems on the market. A new phenomenon is emerging<br />
patients that turn themselves in the creators of new healthcare information systems. For this paper we extend our<br />
previous research on how chronic patients are taking the lead on the open-source development of new<br />
healthcare information systems <strong>and</strong> its implications for providers of commercial healthcare information systems.<br />
By systemically screening online communities of diabetic patients, we try to aggregate the feedback that those<br />
patients are giving to these new open-source systems. Moreover, we try to answer how different this new opensource<br />
software is from the installed traditional solutions.<br />
Keywords: eHealth, chronic care, patient empowerment, open-source, user innovation<br />
1. Introduction<br />
We have observed an enormous investment in healthcare information systems but organizations<br />
continue questioning the benefits of such investments. Many studies examining the information<br />
systems performance have been far from conclusive (Devaraj <strong>and</strong> Kohli 2000). Challenges in the<br />
integration <strong>and</strong> st<strong>and</strong>ardization of information systems, the non user-friendliness of many information<br />
systems together with socio-technical <strong>and</strong> organizational issues are limiting the benefits of<br />
investments in healthcare information systems (Kuhn <strong>and</strong> Giuse 2010).<br />
It is empirically observable that healthcare information systems are customary developed by IT<br />
corporations supplying healthcare delivery organizations. Medical <strong>and</strong> IT professionals are the<br />
perpetual developers <strong>and</strong> analysts of healthcare information systems. It is important to notice that<br />
patients rarely take direct participation in the systems design, analysis <strong>and</strong> development. Viitanen<br />
(2009) points out the fact that those patients have very limited access to their own health information,<br />
<strong>and</strong> that current systems do not support interactive collaboration between patients <strong>and</strong> healthcare<br />
workers. In addition, she remarks that current healthcare systems do not allow clinicians to involve the<br />
patients in their own decision-making process or collect patient’s self-reported impressions of their<br />
clinical status. All this gives an idea that current healthcare services are far away from the patientcentered<br />
healthcare idea.<br />
In our previous research, we introduced <strong>and</strong> explored a new phenomenon where chronic patients<br />
develop their own small healthcare systems (Teixeira <strong>and</strong> Suomi 2010). These empowered patients<br />
take the lead, <strong>and</strong> develop by themselves applications that they perceive useful for their chronic<br />
condition. In a second stage, they publish their software artefacts on Internet as an open-source<br />
project, where they look for other potential users, testers or even developers that could contribute in<br />
project's software development.<br />
Figure 1 illustrates how the studied open-source chronic healthcare software communities evolve.<br />
The creation of a community seems to be always triggered by a patient looking for a solution that<br />
could ease her or his health condition: The open-source community is one place where the patient<br />
could look for a solution. If his or her needs are not well addressed he or she can join the open-source<br />
community by contributing to an existing project steering the development of the product to address<br />
his or her needs. Alternatively, if possessing the necessary skills, he or she can try to develop his or<br />
her own solution turning it public to benefit from contributions of other patients.<br />
A web inquiry on http://sourceforge.net, the most popular web-based software source code repository<br />
revealed 38 projects related with the query “diabetes”. From these 38 open-source software projects<br />
publicly available on the Internet, 14 were actively downloaed with at least one weekly average<br />
download. Many of them supported different insulin pump <strong>and</strong> glucose meter models. The structured<br />
observation performed by Teixeira <strong>and</strong> Suomi (2010) identified three open-source healthcare<br />
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Jose Teixeira <strong>and</strong> Reima Suomi<br />
application targeting chronic patients where the developers manifest their chronic patient status. The<br />
authors strongly believe that many other software applications are developed by the patients<br />
themselves, but developers are reluctant in publicly revealing their chronic patient condition.<br />
Figure 1: The development of open-source chronic healthcare software (Teixeira <strong>and</strong> Suomi 2010)<br />
Our main research question is “what is the feedback that those patients are giving to those new<br />
patient to patient open-source chronic-healthcare systems?” , secondarily we also address “how<br />
different those new open-source systems are from the installed traditional systems”.<br />
With Table 1 we capture information about the three open-source software projects explored by<br />
Teixeira <strong>and</strong> Suomi (2010): First “GNU Gluco Control” that targets diabetics <strong>and</strong> offers an unique<br />
multi-devices support; secondly the “MySHI (My Self Health <strong>Information</strong>)” a database for tracking<br />
personal health information that allows its users to run a web-based health information database in<br />
their own computers: <strong>and</strong> finally “PumpDownload” a diabetes monitoring software that aims to<br />
compatibility with many meters <strong>and</strong> pumps as possibly. Its is important to refer that code contributions<br />
are the ones building the functionality of the core software; non-code contributions are often<br />
localization/translation efforts <strong>and</strong> functional testing.<br />
Table 1: Open-source health systems explicitly developed by patients (authors)<br />
Project Link (http://) Code<br />
contributors<br />
GGC ggc.sourceforge.<br />
net<br />
MSHI sourceforge.net/<br />
projects/myshi/<br />
PD pumpdownload.s<br />
ourceforge.net/<br />
3 active product<br />
core developers<br />
+ 2 active writing<br />
plug-ins for<br />
specific patient<br />
devices.<br />
One very active<br />
developer.<br />
One active<br />
developer + one<br />
anonymous<br />
fixing code bugs.<br />
Non-code<br />
contributions<br />
Many doing<br />
software<br />
translation to<br />
other languages<br />
Positive reviews Negative reviews<br />
Many <strong>using</strong><br />
sourceforge<br />
project<br />
recommendation<br />
<strong>and</strong> review<br />
mechanisms.<br />
None<br />
None None None<br />
None None. Developer<br />
prefers direct<br />
email contact<br />
rather than<br />
forums.<br />
None. Developer<br />
prefers direct<br />
email contact<br />
rather than<br />
forums.<br />
This phenomenon where patients develop their own software that eases their life seems to be a<br />
manifestation of the user innovation phenomenon as described by von Hippel (2005). Users can<br />
develop exactly what they want without relying on manufacturers to act as their agents that very often<br />
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Jose Teixeira <strong>and</strong> Reima Suomi<br />
do not meet their requirements. Moreover, users that innovate expect to benefit from <strong>using</strong> a product<br />
or service, while manufacturers expect to benefit from selling a product or service. Previous<br />
qualitative <strong>and</strong> quantitative research in many different fields clearly evidence the important role that<br />
users play as first developers of products <strong>and</strong> services that become a later sold by manufacturing<br />
firms (Hippel 2005).<br />
This research contrasts from previous research where the intellectual property resulting from users<br />
involvement is retained <strong>and</strong> controlled by firms. In the phenomenon being study users develop<br />
software that remains in the public body by open-source manners, where the product <strong>and</strong> its<br />
blueprints are freely available for everyone. Moreover, it is important to notice that user's purchasing<br />
behaviour in healthcare is more constrained than in many other verticals where literature already<br />
addresses the involvement of users within firm's product development: For instance, a physician<br />
advise, a national healthcare system reimbursement scheme or a personal health insurance<br />
contractual line can have a huge impact on what medical technology a patient acquires.<br />
The chronic healthcare area, where the phenomenon being studied occurs, is extremely relevant. The<br />
number of citizens to live with a chronic illness in the US is estimated to be 88 millions, circa 33% of<br />
the all country population, being one main challenge of the US national healthcare system. Dozens of<br />
studies, reports <strong>and</strong> audits reveal that sizable proportions of chronically ill patients have not received<br />
effective therapy <strong>and</strong> do not had optimal disease control. Effective chronic care requires a lot of<br />
interaction between the healthcare provider <strong>and</strong> a participative patient, where the therapy is adjusted<br />
for both disease control <strong>and</strong> patient well-being (Rothman <strong>and</strong> Wagner 2003). For diabetes patients,<br />
self-control is vitally important <strong>and</strong> effective at the same time .<br />
2. Methodological considerations<br />
In order to aggregate the patients feedback associated with these new systems, this research took<br />
the form of a structured observation based on publicly available Internet data. The three specific<br />
criteria to the structured observation research method as stated by Martinko <strong>and</strong> Gardner (1985) <strong>and</strong><br />
Mintzberg (1970). First, we relied on an observation by a person other than the subject, secondly we<br />
made use of category systems, thirdly, we did not r<strong>and</strong>omize the sampling procedures. Guided by<br />
Bryman (1995) we opted for non-participant observation where the researcher observes with little<br />
immersion on the setting. The authors believe that this research method fits both the study a<br />
phenomena in which no previous research literature seems available <strong>and</strong> the nature of the opensource<br />
software development where project records are publicly available. We pointed our lenses on<br />
online communities of diabetic patients publicly available on the Internet where patients socialise <strong>and</strong><br />
exchange information related with their chronic status. This rich information is available among others<br />
in the forms of discussion forums, wikis <strong>and</strong> community produced documents; it allows us to build<br />
narratives on what feedback the patients are giving on each specific product. Diabetics often reviewed<br />
devices such as pumps <strong>and</strong> meters, healthcare records tailored for diabetics <strong>and</strong> other Internet<br />
resources full of diabetes specific information. Our structured observation drove us to the identification<br />
of the feedback that those patients provided for each specific open-source solution on different online<br />
communities.<br />
In Table 2 we the list the different online communities of patients covered in our research. Patient<br />
oriented documentation was often freely available together with open-discussion forums. Some of<br />
theses communities had support from several non-governmental organizations, others seamed to be<br />
maintained by volunteers within a national community of patients.<br />
Table 2: Observed patient to patient online communities (authors)<br />
Community Internet link Country Language<br />
Tudiabetes http://www.tudiabetes.org International English<br />
Juvenation http://juvenation.org International English<br />
Diabetesdaily http://www.diabetesdaily.com USA English<br />
Diabetessupport http://www.diabetessupport.co.uk UK English<br />
Usenet-newgroup news://de.sci.medizin.diabetes Germany German<br />
Shotuporputup http://www.shootuporputup.co.uk UK English<br />
Midiabetes http://midiabetes.cl Chile Spanish<br />
Wordpress blogs http://worldgnat.wordpress.com Canada English<br />
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Jose Teixeira <strong>and</strong> Reima Suomi<br />
The authors were the two observers, performing the observation <strong>and</strong> classification independently in<br />
constant communication <strong>and</strong> results control. The observation was performed in Turku University <strong>using</strong><br />
simple <strong>and</strong> wide available tools such as a Internet browser, a Usenet newsreader <strong>and</strong> spreadsheet<br />
software; it started on the seventh of February 2011 taking a non-continuous period of five days. On<br />
the google search engine <strong>and</strong> <strong>using</strong> the three open-source project names <strong>and</strong> official websites as<br />
keywords, we identified the patient to patient online communities presented in Table 2 , after manually<br />
filtering query results. Google found a total of 1353 of web-pages mentioning the studied open-source<br />
projects, from where we have been able to identify the eight mentioned patient to patient online<br />
communities. All the eight online communities provided search <strong>and</strong> indexing mechanisms, enabling<br />
an easy search for relevant users-feedback on the studied chronic care software projects.<br />
We performed the observations on patient-community information following six different behavioural<br />
classes that guided the structured observation. In Error! Reference source not found. we describe<br />
how we classified the expressed feedback by carefully analysing the patient-provided free-form text<br />
feedback. Using the simple evernote software available at http://www.evernote.com/, two individuals<br />
classified the captured free-form text sentences in parallel obtaining the identical results, therefore<br />
reducing the risk ambiguous behavioural classifications. Note that a single patient phrase could<br />
express multiple behavioural attitudes towards the software.<br />
Table 3: Structured observation classification system (authors).<br />
Behavioural classification Description<br />
User looks for use information Patient looks for information/help on how to use the software.<br />
User express positive feedback Patient expresses satisfaction with the software or gratifies its developer.<br />
User express negative feedback Patient expresses dissatisfaction with the software or blames its<br />
developer.<br />
User reports a bug Patient reports a bug/malfunction on the software.<br />
User requests a new feature Patient suggest a new feature/requirement to the software.<br />
User requests a competitor<br />
feature<br />
Patient suggest a new feature/requirement to the software explicitly<br />
mentioning a competitor product already implementing it.<br />
During our research we identified several open-source healthcare applications targeting chronic<br />
patients; however it is extremely hard to find evidence in the public available information about opensource<br />
projects where the developers manifest their chronic patient condition. This condition limited<br />
the set of analysed projects, even if the research authors strongly believe that many software<br />
applications are developed by the patients themselves, very few publicly reveal themselves as chronic<br />
patients. From an universe of 36 chronic care healthcare software projects analysed, just three<br />
projects contained public information where the lead developer revealed his patient status.<br />
These three projects formed a sample of many other existing healthcare applications developed by<br />
patients. The three projects were started by geographically distributed developers; project’s lead<br />
developers that publicly revealed their nationalities were from Canada, US, Germany <strong>and</strong> Slovenia.<br />
Two of the applications address the diabetes chronic disease <strong>and</strong> one other address fat-related<br />
diseases.<br />
The three cases studied are shortly introduced below.<br />
Project A: GNU Gluco Control<br />
The first of the three studied open-source software projects is named GGC- GNU Gluco Control <strong>and</strong><br />
both the software application <strong>and</strong> its source code can be downloaded from http://ggc.sourceforge.net/.<br />
Current software available version is 0.4 Beta <strong>and</strong> its software developers provide language<br />
translation for English, German <strong>and</strong> Slovene suggesting that those developers contribute from<br />
different geographical locations, a typical pattern in open-source development teams. From the<br />
sizable set of project’s software artefacts we found a research relevant text file, in which the two<br />
leading developers clearly admit their chronic disease “since we are diabetics ourselves, we are trying<br />
to make this software the best it can be” (GGC software project text file README.en, 2010).<br />
Project B: My Self Health <strong>Information</strong><br />
The second observed project is named MSHI- My Self Health <strong>Information</strong>; it is a web-based<br />
application that allows tracking <strong>and</strong> learning about personal health. The base of the software comes<br />
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Jose Teixeira <strong>and</strong> Reima Suomi<br />
from the USDA National Nutrient Database for St<strong>and</strong>ard Reference (2009) <strong>and</strong> it seems to be<br />
targeted for patients with fat-related diseases. Besides being a project based on web technologies,<br />
the developer is not providing any kind of Internet service, <strong>and</strong> it is suggested that end-user should<br />
install <strong>and</strong> run the software in their own computer, warning of serious risks with posting health<br />
information on any site on Internet. In a wiki supporting the project development he states his believe<br />
that individuals should be able to keep their personal health data organized <strong>and</strong> still private (MyShi<br />
software project page, 2010). A bundle software archive containing both the software <strong>and</strong> its source<br />
code can be downloaded from http://sourceforge.net/projects/myshi/, 0.03b Beta was the latest<br />
release. The project is available only in the English language <strong>and</strong> some software source code<br />
comments suggest that the developer is from the United States. Within the MyShi software project<br />
page, retrieved on the seventh of April 2010 the developer states that the software “is about all that<br />
stuff we maybe should be tracking but don't because it's not easy. diet, weight, blood pressure,<br />
exercise etc” <strong>and</strong> that “MySHI is open source <strong>and</strong> development is driven by the uses” revealing the<br />
user-driven nature of the project. It was important to observe that this project had a single software<br />
developer contributing to the project.<br />
Project C: Pump Download<br />
Third open-source software in our research is named Pump Download <strong>and</strong> its software artifacts can<br />
be downloaded from its Internet site at http://pumpdownload.sourceforge.net/. Current software available<br />
version is 2.0 Beta <strong>and</strong> it is available only in the English language. The lead developer personal blog<br />
revealed his nationality to be Canadadian. Within the project main webpage, the developer expresses<br />
some of his project initiative motivations, below quoted, that together with some software source code<br />
give a strong evidence of his diabetic health condition:<br />
“I got tired of software that had ugly interfaces <strong>and</strong> produced bad records. A few<br />
companies which will go unnamed, make great insulin pumps <strong>and</strong> meters, but write<br />
horrible software. None of them work on Linux, <strong>and</strong> they only support one insulin pump,<br />
or one meter.” (PumpDownload software project page, 2010).<br />
The project was launched in January 2006 <strong>and</strong> <strong>and</strong> it was downloaded 342 time by the beginning of<br />
April 2010. This download number keep it far away from a sourceforge.net popular software<br />
application status, however we must have in consideration that this project is targeting the very<br />
specific diabetics public. Our observation noted that the download peaks shown in Figure 2 are<br />
correlated with the release of new software versions, suggesting that the project maintains a set of<br />
final users that look out for upgrading the software at every new release.<br />
Figure 2: PumpDownload downloads <strong>and</strong> b<strong>and</strong>width evolution (http//sourceforge.net 2010)<br />
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3. Cross-project analysis<br />
Jose Teixeira <strong>and</strong> Reima Suomi<br />
A quantitative summary of our research is presented within Table 4 . Surprisingly, no patients<br />
provided negative feedback on any of the studied patient to patient open-source software<br />
applications. MyShi software was not targeted in any of the observed communities, Pump download<br />
collected minor feedback however GNU Gluco control software was considerably mentioned in the<br />
communities. It is very important to retain that most of the feedback provided was extremely positive,<br />
many commercial solutions were not so well recognized by patients within the observed online<br />
communities.<br />
Table 4: Observed patient to patient online communities (authors) <strong>and</strong> (http://sourceforge.net 2010)<br />
Behaviour GNU Gluco Control MyShi Pumpdowlo<strong>and</strong><br />
User download >10 000 548 342<br />
User looks for use information 4 0 0<br />
User express positive feedback 8 0 3<br />
User express negative feedback 0 0 0<br />
User reports a bug 1 0 0<br />
User requests a new feature 5 0 1<br />
User requests a competitor feature 1 0 0<br />
It is extremely hard to figure out why GNU Gluco Control is more popular than the other studied<br />
software. However, the researcher would like to point out that the lead developer of GNU Gluco<br />
control was member in two of the observed communities. Moreover, he communicated several times<br />
with another patients presenting by very simple manners its open-source project. The authors did not<br />
notice any other marketing initiative conducted by members of the studied open-source software<br />
projects.<br />
After conducting this study, the authors perceived that those patients are satisfied with their hardware<br />
devices such as pumps <strong>and</strong> meters, however they present very often criticism to the software<br />
complementing the medical devices. Most of the negative feedback provided on traditional<br />
commercial medical software were: Poor functionality of the software; absence of software that could<br />
run in non-Microsoft operating systems such as Macintosh <strong>and</strong> Linux; lock-in mechanisms where one<br />
device only work with a single correspondent software <strong>and</strong> vice-versa; lack of data export capabilities<br />
that could allow patients to work their medical data in the common Microsoft excel spreadsheet<br />
software; <strong>and</strong> finally many patients stated that some software was made by developers that do not<br />
underst<strong>and</strong> the patient chronic condition status quotidian implications. '<br />
Surprisingly, <strong>and</strong> addressing the second research question, only once an user requested missing<br />
features that are available in competitor products. This could suggest that, from the functional pointof-<br />
view, the open-source solutions do not differer from the commercial solutions. They support the<br />
same use-cases but implemented by different manners, however future research is needed by<br />
systemically comparing the features provided by the studies open-source software <strong>and</strong> the existing<br />
commercial products on the market.<br />
4. Lessons learned <strong>and</strong> implications<br />
The researchers, after the literature review process, were not able to find previous research literature<br />
covering the exact phenomenon addressed by this research. Existing literature on patient-centric<br />
healthcare information systems is widely available, but most of it ignores that few patients are taking<br />
the lead in the creation of new healthcare information systems, by themselves, in the form of opensource<br />
applications.<br />
Even if the studied phenomenon seems to be a great example of user innovation, but it is widely<br />
ignored by scholars on innovation related topics. The high end-user satisfaction observed on some of<br />
the analysed patient-driven software applications suggests that, like in other areas, open-source<br />
chronic care solutions are credible <strong>and</strong> often preferred by users over proprietary ones. However the<br />
amount of collected data warns any generalization on how innovative <strong>and</strong> satisfying this patient-driven<br />
software is for chronic patients.<br />
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Jose Teixeira <strong>and</strong> Reima Suomi<br />
Future <strong>and</strong> more rigorous research, surveying both patients <strong>and</strong> health-care professionals, should be<br />
conducted by evaluating the studied patient-to patient solutions. Both healthcare system regulators<br />
<strong>and</strong> police-makers should be aware of the echoes of the open-source phenomenon implications in<br />
healthcare. Some existing policies could introduce insuperable barriers to the development<br />
inexpensive open-source solutions in healthcare. Forcing patients that developing their one solutions,<br />
to pay expensive certification programs, like the Certification Commission for Health <strong>Information</strong><br />
Technology in the USA, to use their own solution by legal manners can produce perverse results.<br />
From the patient behavioural point of view, it is empirically observable that those patients are<br />
progressively taking a more active role in the management of their diseases, that chronic patients<br />
interact more <strong>and</strong> more with one another within Internet communities. From the technology point of<br />
view, a lot of development initiatives focus on mobile devices that patients can carry along with them<br />
in a daily basis. Moreover, the software development processes are turning less complex, <strong>and</strong> the<br />
number of individuals with the necessary skills to develop mobile software applications is increasing.<br />
The authors strongly believe that all these factors will intensify the observed phenomena, forecasting<br />
a strong development of the chronic healthcare information systems in the following years.<br />
This research has strong implications for the traditional entities developing commercial healthcare<br />
information systems. As suggested by Lee <strong>and</strong> Mendelson (2008) the emergence of free <strong>and</strong> opensource<br />
software solutions will increase the healthcare market competitiveness forcing commercial<br />
entities to lower prices <strong>and</strong> increase quality. Most of the healthcare information systems producers<br />
sell their products to the healthcare delivery organizations rather than to the patients directly. The<br />
research authors argue that chronic care commercial players could be in a situation described by<br />
Bower <strong>and</strong> Christiansen (1995), where corporations are so focused addressing the immediate needs<br />
of their direct customers, that they lose the disruptive innovation potential for final end-users. It seems<br />
possible that healthcare commercial players could benefit from the studied phenomenon both by<br />
gathering requirements <strong>and</strong> re<strong>using</strong> software assets from patients open-source community. Many<br />
features were suggested by user of open-source software that commercial players should analyse.<br />
In addition, a considerable amount of the communities criticism on existing commercial solutions<br />
points out a lack multi-platform support <strong>and</strong> the existence of user lock-in mechanisms. For instance,<br />
many users complain that their software only works on computers running Microsoft operating<br />
systems; <strong>and</strong> many others complain that they lose all their medical data when purchasing a new<br />
medical device. The studied phenomenon might force existing commercial players to invest in<br />
software development targeting different platforms; And, for the benefit of users, this phenomenon<br />
could pressure existing players to give up from lock-in mechanisms embedded their products.<br />
The phenomenon will also differentiate patients, dividing them to technology-aware <strong>and</strong> technologyignorant.<br />
The ones with skills <strong>and</strong> motivation to search for solutions from the open-source market will<br />
be better off than those not having that capacity. As reported by Lorig et al. (1993), a patient by<br />
working around solutions <strong>and</strong> alternatives, even when they would not be perfect or very beneficial<br />
from the medical point of view, is a therapeutic process that will lead to the feeling of the control of the<br />
disease, <strong>and</strong> finally to real better care results. Moreover in certain illnesses, patients themselves have<br />
also been used to support <strong>and</strong> coach other patients facing similar challenges, in here reported<br />
phenomenon patients are <strong>using</strong> their software skill for the benefit of other patients in similar condition.<br />
Among many other health-care actors, patients are the ones that most benefit from this <strong>and</strong> here<br />
reported phenomenon. The free nature of the studied software solutions enable chronic patients both<br />
to benefit directly by <strong>using</strong> it at a reduced cost <strong>and</strong> to benefit indirectly by the market effects that these<br />
solutions have in the extremely competitive market of chronic-care technological solutions. As<br />
mentioned by some patients in the studied Internet communities, these open-source solutions allowed<br />
them to capture <strong>and</strong> manage their data, without losing it with a shift of a medical device or<br />
correspondent vendor. Moreover, several patients mentioned privacy issues reporting fears of missmanagement<br />
their medical data by some of the medical technology vendors.<br />
References<br />
2010a. GGC software project text file README.en. GNU Gluco Control (GGC). Available at:<br />
http://ggc.sourceforge.net/docs/README.en [Accessed April 15, 2010].<br />
2010b. MyShi software project page. Available at: http://htrack.net/ [Accessed April 15, 2010].<br />
2010c. PumpDownload software project page. Available at: http://pumpdownload.sourceforge.net/ [Accessed<br />
April 15, 2010].<br />
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Bower, J. & Christiansen, C., 1995. Disruptive technologies: catching the wave . Harvard Business Review (USA)<br />
, 73 (1), 43-54.<br />
Bryman, A., 1995. Research Methods <strong>and</strong> Organization Studies, TAYLOR & FRANCIS LTD. Available at:<br />
[Accessed April 13, 2010].<br />
Devaraj, S. & Kohli, R., 2000. <strong>Information</strong> technology payoff in the health-care industry: a longitudinal study. J.<br />
Manage. Inf. Syst., 16(4), 41-67.<br />
Eric von Hippel, 2005. Democratizing innovation: The evolving phenomenon of user innovation. Journal für<br />
Betriebswirtschaft, Volume 55(1), 63-78.<br />
Johanna Viitanen, 2009. User-centred Approach to Healthcare ICT Development. Licentiate’s Thesis. HELSINKI<br />
UNIVERSITY OF TECHNOLOGY.<br />
Teixeira, J. & Suomi, R., 2010. Chronic Patients as Developers of Innovative Healthcare <strong>Information</strong> Systems. In<br />
Proceedings of ECIME 2010. The 4th European Conference on <strong>Information</strong> <strong>Management</strong> <strong>and</strong> Evaluation.<br />
Lisbon.<br />
Kuhn, K. & Giuse, D., 2001. From Hospital <strong>Information</strong> Systems to Health <strong>Information</strong> Systems Problems,<br />
Challenges, Perspectives. Methods of <strong>Information</strong> in Medicine, (2 2010), 275-287.<br />
Lee, D. & Mendelson, H., 2008. Divide <strong>and</strong> Conquer: Competing with Free Technology Under Network Effects.<br />
Production <strong>and</strong> Operations <strong>Management</strong>, 17(1), 12-28.<br />
Lorig K., Mazonson P., Holman H., 1993. Evidence suggesting that health education for self-management in<br />
patients with chronic arthritis has sustained health benefits while reducing health care costs. Arthritis<br />
Rheum 1993;36: 439–446<br />
Luthiger, B. & Jungwirth, C., 2007. Pervasive fun. 2007. Available at:<br />
http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/1422/1340.<br />
Martinko, M.J. & Gardner, W.L., 1985. Beyond Structured Observation: Methodological Issues <strong>and</strong> New<br />
Directions. The Academy of <strong>Management</strong> Review, 10(4), 676-695.<br />
Mintzberg, H., 1971. Managerial Work: Analysis from Observation. <strong>Management</strong> Science, 18(2), B97-B110.<br />
Raymond, E.S., 2001. The Cathedral <strong>and</strong> the Bazaar: M<strong>using</strong>s on Linux <strong>and</strong> Open Source by an Accidental<br />
Revolutionary, O'Reilly \& Associates, Inc.<br />
Rothman, A.A. & Wagner, E.H., 2003. Chronic Illness <strong>Management</strong>: What Is the Role of Primary Care? Annals of<br />
Internal Medicine, 138(3), 256-261.<br />
U.S. Department of Agriculture, Agricultural Research Service., 2009. USDA National Nutrient Database for<br />
St<strong>and</strong>ard Reference. Available at: http://www.ars.usda.gov/ba/bhnrc/ndl [Accessed April 15, 2010].<br />
Anderson, R. M., & Funnell, M. M. (2005). Patient empowerment: reflections on the challenge of fostering the<br />
adoption of a new paradigm. Patient education <strong>and</strong> counseling, 57(2), 153-157.<br />
Funnell, M. M., & Anderson, R. M. (2004). Empowerment <strong>and</strong> self-management of diabetes. Clinical Diabetes,<br />
22(3), 123.<br />
Rodgers, S., & Chen, Q. (2005). Internet community group participation: psychosocial benefits for women with<br />
breast cancer. Journal of Computer Mediated Communication, 10(4), 00-00.<br />
Str<strong>and</strong>burg, K. J. (2008). Users as Innovators: Implications for Patent Doctrine. University of Colorado Law<br />
Review, 79(2), 467.<br />
Toobert, D. J., Hampson, S., & Glasgow, R. (2000). The summary of diabetes self-care activities measure:<br />
results from 7 studies <strong>and</strong> a revised scale. Diabetes Care, 23(7), 943.<br />
474
Value of <strong>Knowledge</strong> <strong>Management</strong> Systems: A Review<br />
Paper<br />
Nelly Todorova<br />
University of Canterbury, Christchurch, New Zeal<strong>and</strong><br />
nelly.todorova@canterbury.ac.nz<br />
Abstract: One of the basic knowledge management questions is how organizations can turn the knowledge that<br />
they have into something that adds value. While there is general agreement on the importance of value creation<br />
through knowledge generation, diffusion <strong>and</strong> utilization, the concept of value in the context of knowledge<br />
management has not been defined. This fundamental issue is complicated by the different paradigms underlying<br />
KM such as information management, strategic management, business process re-engineering, philosophy <strong>and</strong><br />
economics. Defining value in the context of KM will lead to better underst<strong>and</strong>ing of the potential sources of value<br />
creation from knowledge management <strong>and</strong> better management of knowledge assets. It will inform the<br />
measurement of knowledge <strong>and</strong> its impacts on organizations. It will lead to recognition of the contribution of<br />
knowledge assets to organizational success. This paper provides a comprehensive literature review reporting on<br />
prior research on value creation <strong>and</strong> how this can improve the underst<strong>and</strong>ing of value in the context of knowledge<br />
management. The subject of value is very complex due to its subjective nature, multiple levels of sources <strong>and</strong><br />
users <strong>and</strong> a multitude of underpinning disciplines <strong>and</strong> perspectives. Current research has called for the need for<br />
integration of these perspectives <strong>and</strong> greater underst<strong>and</strong>ing of the value dimensions at different levels. This<br />
paper presents a preliminary holistic framework of value dimensions in order to gain better underst<strong>and</strong>ing of the<br />
value created from KM initiatives from multiple perspectives at organizational level. This framework can be used<br />
to map out specific value priorities for organizations <strong>and</strong> align them with measurements that are set for evaluation<br />
of KM initiatives.<br />
Keywords: knowledge management, evaluation, value creation, KM systems<br />
1. Introduction<br />
The 21st century is a knowledge economy <strong>and</strong> knowledge workers are the most valuable asset of<br />
organizations (Drucker, 2000). <strong>Knowledge</strong> is needed to deal with complexity, to provide value-added<br />
services <strong>and</strong> to encourage innovation. Achieving sustainable competitive advantage is only possible<br />
through what an organization knows, how it utilizes <strong>and</strong> how fast it can learn something new (Prusak,<br />
1997). <strong>Knowledge</strong> <strong>Management</strong> is an approach that was developed to leverage this new core<br />
resource. <strong>Knowledge</strong> management (KM) aims to help employees effectively create, share <strong>and</strong> utilize<br />
knowledge to enhance the organisation’s knowledge (Jashapara, 2004)<br />
To pursue this advantage companies have invested billions of dollars in knowledge management<br />
systems to facilitate the storage <strong>and</strong> flow of knowledge within the organization. However, it is not<br />
enough to generate knowledge <strong>and</strong> make it available. Many organizations which have invested in KM<br />
systems have realised that knowledge management is not a one-off investment but a continuous<br />
process (KPMG Survey, 2003). KM systems are often perceived as “glorified information systems” as<br />
there is a gap between their promise <strong>and</strong> what they deliver (Geisler, 2008 p 255). The important<br />
success factor is to provide knowledge which adds value. One of the primary questions for<br />
<strong>Knowledge</strong> <strong>Management</strong> researchers <strong>and</strong> practitioners is how organizations can transform the<br />
knowledge that they have into something that adds value.<br />
While there is general agreement on the importance of value creation through knowledge generation,<br />
diffusion <strong>and</strong> utilization, the concept of value in the context of knowledge management has not been<br />
defined. This fundamental issue is complicated by the different paradigms underlying KM such as<br />
information management, strategic management, business process re-engineering, philosophy <strong>and</strong><br />
economics. The concept of value generated from knowledge management varies dependent on the<br />
perspective. Defining value in the context of KM will lead to better underst<strong>and</strong>ing of the potential<br />
sources of value creation from knowledge management <strong>and</strong> to better management of knowledge<br />
assets. It will inform the measurement of knowledge <strong>and</strong> its impacts on organizations. It will improve<br />
to recognition of the contribution of knowledge assets to organizational success (Boudreau, 2003 p<br />
361). Therefore, the purpose of this paper is to investigate the sources of value creation at the<br />
organizational level <strong>and</strong> to improve our underst<strong>and</strong>ing of value in the context of knowledge<br />
management initiatives.<br />
475
Nelly Todorova<br />
This paper provides a comprehensive literature review investigating the potential sources of value for<br />
KM initiatives. First, the paper outlines prior research to define the concept of value <strong>and</strong> how value is<br />
created in organizations. As knowledge management systems are predominantly IT-based, the review<br />
of the literature focuses on the current knowledge of value in IT. Then, a discussion of specific<br />
characteristics of KM systems follows with particular focus on issues with defining <strong>and</strong> assessing<br />
value in the context of KM <strong>and</strong> the progress made up to date. Based on this overview of the literature,<br />
a preliminary model of KM value is presented.<br />
2. Prior research on value<br />
In order to underst<strong>and</strong> the process of value creation from KM systems, it is important to underst<strong>and</strong><br />
what value means. Value is a concept that is not well understood <strong>and</strong> there is no agreed definition in<br />
the literature (Fischer et al 2011). There are many perspectives of value <strong>and</strong> the literature refers to<br />
different phenomena. At the organizational level of analysis there are two components of value: use<br />
value <strong>and</strong> exchange value (Bowman <strong>and</strong> Ambrosini 2000). Use value refers to the perception of users<br />
of the quality of a product or a service as compared to their needs. Exchange value refers to the<br />
monetary amount that the user pays to the seller for the use value. As assessments of the use value<br />
are made by the individual users, they are subjective. Qureshi et al (2006) state that things have<br />
value when people consider them useful, important or desirable. This definition confirms the notion<br />
that value is a relative <strong>and</strong> context-based concept. Lepak et al. (2007) suggest that the degree of<br />
perceived value by a user depends on the perceived novelty <strong>and</strong> appropriateness of the product or<br />
service. The novelty <strong>and</strong> appropriateness of a product or service will be evaluated differently by<br />
different users depending on their level of knowledge of the product <strong>and</strong> the existing alternatives, <strong>and</strong><br />
the meaning of the new product/service in their context. An important implication of this definition of<br />
value <strong>and</strong> its subjective <strong>and</strong> context-specific nature is that there will be competing views on what is<br />
valuable among different users of value.<br />
The literature on value creation at organizational level views value from different perspectives <strong>and</strong><br />
considers different ways in which organizations can create new value or value creation processes.<br />
Porter (1985) states that companies create new value when they find new ways of doing things by<br />
<strong>using</strong> new technologies, methods <strong>and</strong> raw materials. The innovation process changes or establishes<br />
new valuation of the use or exchange value of the product or service. Lepak et al (2007) argue that<br />
value creation processes include all activities that provide a greater level of novelty <strong>and</strong><br />
appropriateness than the users already have. The production of new use value does not necessarily<br />
mean the creation of new exchange value however. The exchange value can only be assessed if the<br />
new use value is sold. The dynamic capabilities literature also studies how organizations create value.<br />
Dynamic capabilities are the abilities of the organization to create, integrate <strong>and</strong> release resources.<br />
Creation of new resources can occur through reconfiguration, leverage, learning <strong>and</strong> integration of<br />
existing resources. The HR management literature contributes to this stream of value creation by<br />
examining the role of management practices to motivate employees <strong>and</strong> build up their skill in order for<br />
them to achieve organizational goals <strong>and</strong> thus create value.<br />
Value can be perceived from a target user that is not direct internal or external customer. The purpose<br />
of the organization is to create value to many targets. One of these targets from the perspective of<br />
social responsibility is society. Post & Sachs ( 2002 p 16) argue that organizations should not survive<br />
if they do not take responsibility for the well-being of society as a whole. Organizations realise that<br />
how they do business impacts on society <strong>and</strong> in return society responds to this impact. Societal value<br />
has to be visible. There is a shift from concentrating on value to a select group (shareholders) to<br />
addressing issues of the society in which organizations operate (Tissen, et al., 1998 p 57).<br />
Organizational value can be extended beyond financial value <strong>and</strong> profit to include the impacts to<br />
society <strong>and</strong> the environment. Society’s perception of value may lead to a decision to purchase a<br />
product or a service <strong>and</strong> therefore businesses affect their long-term profits by the way they interact<br />
with society (Marker, et al., 2009).<br />
Finally, a body of existing research that is relevant to value creation concentrates on the resources<br />
needed by the organization in order to create value. According to the resource-based view of the firm<br />
(RBV) the main source of sustainable competitive advantage are resources that are valuable, rare,<br />
imperfectly imitable <strong>and</strong> non-substitutable (Bowman&Swart 2007). Valuable resources that are unique<br />
generate economic rents (Noe, Colquitt, Simmering, & Alvarez, 2003 p 227). To generate rents, a<br />
resource must contribute to a product or service that has use value or utility to internal or external<br />
customers.<br />
476
Nelly Todorova<br />
Human capital represents the value of the skills, tacit knowledge <strong>and</strong> capabilities of the individuals<br />
associated with an organization. Individuals in organizations possess general or public knowledge<br />
(generic human capital), occupation-specific human capital <strong>and</strong> industry-specific capital. Occupationspecific<br />
<strong>and</strong> industry-specific knowledge relate to established knowledge domains in professions,<br />
sometimes they are obtained through certification with a professional body <strong>and</strong> hold more value to the<br />
individuals <strong>and</strong> the organizations. Finally, employees as a result of their work experience in an<br />
organization gain firm-specific knowledge such as unique processes, documentation or trade secrets.<br />
Such knowledge is only applicable <strong>and</strong> valuable to a particular organization. Therefore, the acquisition<br />
of firm-specific knowledge increases the value of human capital to the organization <strong>and</strong> reduces the<br />
employee mobility. However, research shows the issues of sharing knowledge increase with<br />
increased proportions of firm-specific knowledge (Lepak&Snell 2003). As employees gain more of<br />
what is uniquely valuable to the organization, they are more reluctant to share it as they perceive this<br />
capital as a valued asset. From organizational perspective, knowledge increases <strong>and</strong> its value<br />
increases with the number of users <strong>and</strong> moving it to the organizational level. Organizations face a key<br />
issue of selecting KM practices which enable <strong>and</strong> encourage sharing.<br />
Structural capital is a component of intellectual capital <strong>and</strong> refers to the value of the processes <strong>and</strong><br />
packages that allow human capital to be used effectively to create value (Smith & McKeen, 2003,<br />
p356). It relates to the knowledge that has been captured/institutionalised within the structure,<br />
processes <strong>and</strong> culture of the organization (Petrash, 1996). Structural capital has embedded in it<br />
socially validated <strong>and</strong> useful knowledge <strong>and</strong> it can be classed as a knowledge asset (Boisot, 1998,<br />
p117; Bowman & Swart, 2007)<br />
Customer capital is another component of intellectual capital <strong>and</strong> represents the value of the<br />
relationships of an organization with the people with whom they do business (Smith & McKeen, 2003<br />
p356, Ravald & Gronroos, 1996, p23, Petrash, 1996)<br />
Social capital<br />
Social capital is based on the assumption that social relationships have value. It is a know-who, an<br />
informal organization, a social structure that exists in parallel to the formal hierarchy of an<br />
organization (Smedlund, 2008). Social capital is both a resource <strong>and</strong> a value driver. Relationships<br />
between employees <strong>and</strong> contacts from outside the organization are considered a resource. Internal<br />
network structures based on trust <strong>and</strong> common beliefs <strong>and</strong> norms allow organizations to acquire,<br />
integrate <strong>and</strong> release resources, which is one of the most important value drivers (Smedlund, 2008).<br />
Social capital is the sum of the actual <strong>and</strong> potential resources available that derive from the<br />
relationships possessed by an individual or in a social unit (Nahapiet & Ghoshal, 1998). The<br />
structural, cognitive <strong>and</strong> relational dimensions of social capital influence the combination <strong>and</strong><br />
exchange of intellectual capital which then directly affects the creation of new intellectual capital.<br />
There are different perceptions of the components of social capital but they all fall in three categories-<br />
networks, norms <strong>and</strong> beliefs. McElroy et al (2006) in their synthesis of the social capital literature<br />
argue that all major forms of social capital are effectively different forms of knowledge. Therefore<br />
knowledge management plays an important role in development of social capital. They propose that<br />
knowledge management should care <strong>and</strong> feed the social capacity of groups <strong>and</strong> organizations to<br />
learn <strong>and</strong> solve problems.<br />
Human capital <strong>and</strong> social capital are parallel <strong>and</strong> complementary <strong>and</strong> they reflect different aspects of<br />
a socially constructed wealth creating activities <strong>and</strong> resources. Similarly, IC is parallel to HC as it<br />
focuses on group activity in contrast to the HC perspective which focuses on individual level activity.<br />
Social capital provides the social relations <strong>and</strong> structures necessary to create <strong>and</strong> enhance HC <strong>and</strong><br />
IC ((Manning, 2010)<br />
In conclusion the subject of value creation is made complex by its subjective nature, multiple levels of<br />
analysis <strong>and</strong> the theoretical discipline scholars use to study it. As outlined in this section, value<br />
creation studies focus on value outcomes such as organizational performance <strong>and</strong> profit, activities<br />
that create value, dynamic capabilities of the organization <strong>and</strong> VRIN resources. The following section<br />
will focus on how these main areas of value research are represented in the context of IT-based<br />
initiatives.<br />
477
Resources<br />
Value-creating<br />
actions<br />
Dynamic<br />
capabilities<br />
Nelly Todorova<br />
VALUE<br />
Performan<br />
ce<br />
Figure 1: Representation of the current body of knowledge in value creation<br />
3. IT <strong>and</strong> value<br />
The current research in IT <strong>and</strong> business value examines how the application of IT impacts<br />
organizational performance <strong>and</strong> how to measure these impacts. In recent years, there have been a<br />
number of studies confirming that IT can contribute to improvements in organizational performance<br />
(Melville et al 2004, Kohli <strong>and</strong> Grover 2008). Studies consider as performance business process<br />
performance <strong>and</strong> perception-related performance as well as financial performance. Therefore, IT<br />
value is represented in different forms <strong>and</strong> at different levels.<br />
The majority of studies on IT value are based on the resource-based view (RBV) of the firm <strong>and</strong><br />
recognize that IT by itself <strong>and</strong> in isolation does not generate value (Nevo <strong>and</strong> Wade 2010, Kohli <strong>and</strong><br />
Grover 2008). It creates value only in certain conditions <strong>and</strong> when there are certain combinations of<br />
mediating factors. Melville et al (2004) point out that a major limitation of the RBV is that it assumes<br />
the best use of resources <strong>and</strong> it does not study what such best practice might be. Thus, the path from<br />
the IT asset to performance remains a black box. It assumes a synergy between the IT asset <strong>and</strong><br />
other complimentary IT <strong>and</strong> organizational resources such as culture, structure <strong>and</strong> business<br />
processes. Such synergy however may not be realized without the presence of enabling conditions.<br />
Researchers have emphasized the lack of study of these paths that lead to economic value <strong>and</strong> how<br />
we enable them (Kohli <strong>and</strong> Grover 2008). One of the issues in assessment of IT value is that it is<br />
difficult to attribute the value generated by IT investments. This is due to the subjectivity of primary<br />
data, lack of reliable secondary data <strong>and</strong> appropriate proxies. Therefore, “how” <strong>and</strong> “why” questions<br />
remain understudied. Kohli <strong>and</strong> Grover(2008) conclude that what we currently know about IT value is<br />
that IT <strong>and</strong> its complementary resources can create value on many levels <strong>and</strong> while we cannot prove<br />
the causality, we can extend our knowledge on mediating factors in the value creation process (Fig 2).<br />
IT INVESTMENTS-------------------MEDIATING FACTORS---------------------IT-BASED VALUE<br />
IT Resources<br />
(human <strong>and</strong><br />
technological)<br />
IT <strong>and</strong> organizational<br />
complimentary resources<br />
Organizational capabilities<br />
IT-Strategy Alignment<br />
IT intermediate value<br />
(such as process<br />
improvement)<br />
Perceived output value<br />
(such as customer<br />
service)<br />
Financial value<br />
Figure 2: Schematic of “What we know” (adapted from Kohli <strong>and</strong> Grover (2008)<br />
Current research has concentrated largely on financial post hoc metrics as representation of value<br />
<strong>and</strong> these metrics have not been able to capture the true value experienced by businesses <strong>and</strong><br />
customers. Researchers have called for broader representation based on observations of practice of<br />
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Nelly Todorova<br />
IT value from pure financial value to other “intangible” value to all stakeholders such as agility,<br />
flexibility <strong>and</strong> customer service. Ultimately such value indicators still have an economic impact in the<br />
external marketplace.<br />
4. Value of <strong>Knowledge</strong> <strong>Management</strong> systems<br />
KM value assessment is a very new <strong>and</strong> emerging field <strong>and</strong> there is not even an agreement as to<br />
what constitutes a successful KM initiative <strong>and</strong> what performance indicators should be measured to<br />
assess the value of KM systems (Benbya 2010; Fischer et al 2011). Many terms are used to<br />
represent value <strong>and</strong> these include internal performance measures such as successful KM<br />
implementation as well as external performance measures such as cost savings, quality of decision<br />
making, customer service improvements. Many of these performance indicators such as<br />
implementation success do not necessarily guarantee improved organizational performance. There is<br />
no definition of KM value, the few models that exist are at the conceptual stage <strong>and</strong> of a very generic<br />
nature <strong>and</strong> none of them are empirically supported (Fischer et al 2011). Most models concentrate only<br />
on the outcomes such as performance of KM initiatives without considering the capabilities <strong>and</strong><br />
processes that help to achieve this performance. Most studies deal either with knowledge as a<br />
strategic asset or with the benefits or outcomes of KM initiatives.<br />
The research findings on business value of IT are very relevant for KM systems as the majority of<br />
them are IT-based. Evaluation issues such as subjectivity, difficulty in attribution <strong>and</strong> allocation of<br />
value <strong>and</strong> measurement of intangible representations of value will apply equally in this context.<br />
However, there are some specific characteristics of KM systems that require specific<br />
conceptualization <strong>and</strong> treatment of value. KMS are not focused on performance of a task but on<br />
support of creation <strong>and</strong> sharing of knowledge required to perform a task. What makes measurement<br />
of KM value particularly difficult is the elusive <strong>and</strong> intangible nature of knowledge (Fischer et al 2011).<br />
<strong>Knowledge</strong> is complex <strong>and</strong> difficult to transfer <strong>and</strong> is needs to be used to demonstrate its value. This<br />
section shortly outlines the current research relevant to KM value.<br />
Value of knowledge<br />
<strong>Knowledge</strong> management efforts are based on the assumption that the knowledge that individuals<br />
possess <strong>and</strong> create has value (Alavi <strong>and</strong> Leidner 2001). One stream of KM literature focuses on<br />
knowledge as a key resource that improves organizational capabilities <strong>and</strong> performance. <strong>Knowledge</strong><br />
based view of the firm based on supports that knowledge is a strategic asset but there are no studies<br />
that provide evidence of its value. Studies based on the KBV take the objectivist view of knowledge.<br />
The objectivist view of knowledge regards it as an object or entity that people possess but it can exist<br />
independently <strong>and</strong> can be codified (Schultze <strong>and</strong> Stabel 2004). This explicit knowledge is free from<br />
individual subjectivity <strong>and</strong> therefore superior to tacit knowledge which is very difficult to articulate <strong>and</strong><br />
embedded within the individual context of beliefs <strong>and</strong> assumptions. (Jakubik 2007, Hislop 2009 p 19).<br />
<strong>Knowledge</strong> is perceived as commodity. Many studies which use the knowledge-based theory of the<br />
firm adopt this view on knowledge <strong>and</strong> make assumptions that knowledge can be quantified <strong>and</strong><br />
objectively measured through quantitative methods.<br />
Objectivists view tacit <strong>and</strong> explicit knowledge as distinctive <strong>and</strong> separate types <strong>and</strong> the sharing of<br />
these two types is completely different. Sharing of explicit knowledge is easy <strong>and</strong> its only requirement<br />
is a communication channel (Szulanski, 1996) (fig 1). Based on this assumption, the starting objective<br />
of knowledge management is to identify what tacit knowledge is important <strong>and</strong> convert it into explicit<br />
knowledge. Once all knowledge is in explicit form, the objective is to store it in a central repository<br />
which can be accessed by all. Typically technology plays a central role in such projects.<br />
The social or community view of knowledge assumes that knowledge is a social construct which is not<br />
static (Jakubik 2007). It is embedded within processes <strong>and</strong> day to day practices. It is based on the<br />
assumption that practices consist of both physical <strong>and</strong> cognitive elements <strong>and</strong> they are inseparable<br />
(Orlikowski 2002).<br />
This view considers knowledge as a process, not an object. In addition, it contradicts the objectivist<br />
view as it assumes that knowledge is constantly changing as people perform various activities. The<br />
view does not consider tacit <strong>and</strong> explicit knowledge as separate but as two sides of knowledge. Tacit<br />
knowledge is the necessary background that allows the interpretation <strong>and</strong> development of explicit<br />
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Nelly Todorova<br />
knowledge. This link between tacit <strong>and</strong> explicit knowledge implies that only individuals with sufficient<br />
common knowledge base can exchange knowledge, underst<strong>and</strong> each other <strong>and</strong> correctly interpret the<br />
exchanged knowledge. This view limits the impact of IT on knowledge sharing (Alavi <strong>and</strong> Leidner<br />
2001).<br />
Based on these main assumptions the social view concludes that knowledge sharing requires a<br />
mutual underst<strong>and</strong>ing of tacit assumptions, immersion in practice <strong>and</strong> social interaction. It places<br />
strong emphasis on management <strong>and</strong> leadership practices to support social interaction <strong>and</strong> trust.<br />
While technology can still play a role, it is focused more on connection people to people rather than<br />
people to explicit knowledge.<br />
KM strategies <strong>and</strong> initiatives<br />
Different perspectives of knowledge define different approaches to knowledge management. When<br />
knowledge is viewed as an object the focus of KM initiatives is on building knowledge stocks <strong>and</strong><br />
providing access to them. When knowledge is viewed as a process, the focus of KM is on knowledge<br />
flows <strong>and</strong> supporting the creation <strong>and</strong> sharing of knowledge. Finally, when knowledge is considered<br />
as a capability, KM initiatives aim to build competences, gain strategic advantage from know-how <strong>and</strong><br />
create intellectual capital (Alavi <strong>and</strong> Leidner, 2001).<br />
KM strategies can be divided into two main categories – personalization <strong>and</strong> codification strategies<br />
(Hansen et al 1999). Companies <strong>using</strong> the codification strategy concentrate primarily on transfer <strong>and</strong><br />
reuse of explicit knowledge. The objective is to capture <strong>and</strong> codify knowledge for broader access<br />
within the organization. Such initiatives focus on the design <strong>and</strong> use of searchable repositories of<br />
explicit knowledge <strong>using</strong> technologies such as intranets, groupware <strong>and</strong> document management<br />
systems. <strong>Knowledge</strong> repositories typically contain best practices, lessons learned from past<br />
experiences, knowledge about products, services <strong>and</strong> customers. Some companies include within<br />
their knowledge management activities projects <strong>and</strong> systems that aim to transform data into usable<br />
information through data mining <strong>and</strong> statistical analysis.<br />
Personalization strategies assume that a lot of important knowledge is tacit <strong>and</strong> the main mode of<br />
knowledge transfer is through personal interaction. KM initiatives focus on improving social processes<br />
to facilitate knowledge sharing between individuals. Some of these initiatives rely on the support of IT<br />
to bring people together. For example, organizations work on creation of corporate directories of<br />
internal expertise to connect people to the right experts within the organization; creation of knowledge<br />
networks which allow people to communicate virtually or face to face. Other initiatives may not use<br />
technology at all <strong>and</strong> concentrate on the creation of organizational culture which motivates people to<br />
share their knowledge <strong>and</strong> on providing regular social interactions between employees.<br />
Value of KM systems<br />
The studies on KM value are very fragmented. If we consider the value models from the previous<br />
sections, these studies focus on only one part of the models- outcomes, resources or capabilities in<br />
terms of enabling sharing <strong>and</strong> retrieval. It is very important to consider KM value in the context of KM,<br />
IT <strong>and</strong> other organizational resources required to derive value from KM initiatives <strong>and</strong> the paths that<br />
are taken to produce this value. Based on the review of the literature on value creation <strong>and</strong> IT<br />
business value, a preliminary model is presented to transfer some of the findings to the context of KM<br />
initiatives (Fig 3). It maps out possible resources, outcomes <strong>and</strong> capabilities.<br />
5. Conclusions<br />
<strong>Knowledge</strong> management is an emerging field which draws on theories established in different<br />
disciplines such as information systems, organizational behaviour, economics <strong>and</strong> human resources.<br />
Research in the field is fragmented as researchers represent the individual perspectives of their<br />
discipline. Current research recognizes the need for integration of these perspectives <strong>and</strong> of creating<br />
unified definitions <strong>and</strong> frameworks (Green, Stankosky, & V<strong>and</strong>ergriff, 2010; Laverne&Earl, 2006). The<br />
aim of knowledge management is to leverage knowledge as a strategic asset to gain <strong>and</strong> sustain<br />
strategic advantage <strong>and</strong> to create value for organizations. There are many different approaches to<br />
knowledge management on the continuum between strong technocratic to predominantly humanistic<br />
approaches. There is considerable variety of objectives. Based on the definition of knowledge as a<br />
480
Nelly Todorova<br />
unique <strong>and</strong> inimitable resource most studies in KM start with the assumption that KM projects <strong>and</strong><br />
initiatives create value. However, there is concern that KM has generated a lot of interest <strong>and</strong><br />
investment but no real value (Davenport&Prusak, 1998; Spender 2006). Therefore, there is a need for<br />
identifying the value of KM initiatives to provide organizations with a basis for decisions on KM<br />
investments.<br />
Capabilities Capabilities<br />
Envirnoment<br />
Envirnoment<br />
Impacts Impacts<br />
Community Community<br />
involvement<br />
involvement<br />
Taxes Taxes<br />
Skills Skills<br />
Personality Personality attributes attributes<br />
Tacit Tacit knowledge knowledge<br />
Society Society<br />
Human Human<br />
KM<br />
value<br />
Cognitive Cognitive<br />
Beliefs<br />
Norms Norms<br />
Relational Relational<br />
Social Social<br />
Social<br />
responsibility Economic<br />
Exchange Exchange<br />
value value<br />
Consumer Consumer value value<br />
Use Use value value<br />
Structural Structural<br />
Networks Networks<br />
Trust Trust<br />
Intellectual Intellectual<br />
Shareholder Shareholder<br />
value value<br />
Explicit Explicit<br />
knowledge knowledge<br />
Technology Technology<br />
Human Human<br />
resources resources<br />
Commercializable<br />
Commercializable<br />
assets assets<br />
Customer‐related<br />
assets<br />
Structure‐related<br />
Structure‐related<br />
assets assets<br />
Figure 3: Preliminary KM value model<br />
The subject of value is very complex due to its subjective nature, multiple levels of sources <strong>and</strong> users<br />
<strong>and</strong> a multitude of underpinning disciplines <strong>and</strong> perspectives. Current research has called for the<br />
need for integration of these perspectives <strong>and</strong> greater underst<strong>and</strong>ing of the value dimensions at<br />
different levels. This paper presents a preliminary holistic framework of value dimensions in order to<br />
gain better underst<strong>and</strong>ing of the value created from KM initiatives from multiple perspectives at<br />
organizational level. This framework can be used to map out specific value priorities for organizations<br />
<strong>and</strong> align them with measurements that are set for evaluation of KM initiatives. The preliminary KM<br />
value model needs to be validated <strong>using</strong> qualitative <strong>and</strong> quantitative data. Some dimensions may not<br />
be relevant in the context of Km initiatives <strong>and</strong> others may emerge as more important. In addition, the<br />
dimensions need to be better defined in the context of KM.<br />
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482
Accountability <strong>and</strong> the Reconstruction of the Past<br />
Geert-Jan van Bussel<br />
HvA Amsterdam University of Applied Sciences, Amsterdam, The Netherl<strong>and</strong>s<br />
g.j.van.bussel@hva.nl<br />
Abstract: Many organizations have undergone substantial reorganization in the last decade. They re-engineered<br />
their business processes <strong>and</strong> exchanged proprietary, not integrated applications for more st<strong>and</strong>ard solutions.<br />
Integration of structured data in relational data bases has improved documentation of business transactions <strong>and</strong><br />
increased data quality. But almost 90% of the information that organizations manage is unstructured, can not<br />
easily be integrated into a traditional database. Just like structured data, unstructured information in organizations<br />
are records, meant <strong>and</strong> used as evidence for organizational actions <strong>and</strong> transactions. Governments, courts <strong>and</strong><br />
other stakeholders are making increasing dem<strong>and</strong>s for the trustworthiness of records. This is part of a long-term<br />
trend toward defining what accountability means in a digital era. An analysis of literature of information science,<br />
organization science <strong>and</strong> archival science illustrates that for accountability, reconstruction of the past is essential.<br />
Hypothesis of this paper is that for the reconstruction of the past each organization needs (at least) a combination<br />
of three mechanisms: enterprise records management, organizational memory <strong>and</strong> records auditing. Enterprise<br />
records management ensures that records meet the for accountability necessary quality requirements: integrity,<br />
authenticity, controllability <strong>and</strong> historicity. These requirements ensure records that can be trusted. Trusted<br />
records enhance the possibility of reconstructing the past. The organizational memory ensures that trusted<br />
records are preserved for as long as is necessary to comply to accountability regulations. It provides an information<br />
<strong>and</strong> communication technology infrastructure to (indefinitely) store those records <strong>and</strong> to keep them<br />
accessible. Records auditing audits enterprise records management <strong>and</strong> organizational memory to assess the<br />
possibility to reconstruct past organizational actions <strong>and</strong> transactions. These mechanisms ensure that organizations<br />
have a documented underst<strong>and</strong>ing of: the processing of actions <strong>and</strong> transactions within business<br />
processes; the dissemination of trusted records; the way the organization accounts for the actions <strong>and</strong><br />
transactions within its business processes; <strong>and</strong> the reconstruction of actions <strong>and</strong> transactions from business<br />
processes over time. This underst<strong>and</strong>ing is important for the reconstruction of the past in digitized organizations<br />
<strong>and</strong> improve organizational accountability.<br />
Keywords: accountability, governance, enterprise records management, organizational memory, records<br />
auditing<br />
1. Introduction<br />
After attention to the increase of business process efficiency in the 1980s, organizations were faced<br />
with a transformation into an information society in the 1990s. Organizations re-engineered their business<br />
processes <strong>and</strong> exchanged not integrated applications for more st<strong>and</strong>ard solutions. Integration of<br />
structured data in relational databases has improved documentation of actions <strong>and</strong> transactions <strong>and</strong><br />
increased data quality. But almost 90% of the information that organizations manage is unstructured,<br />
can not easily be integrated into traditional databases. This unstructured information is created by<br />
knowledge workers, who create networks of expertise <strong>and</strong> engage in peer-to-peer knowledge sharing<br />
across organizational boundaries. <strong>Knowledge</strong> work has to do with organization-wide <strong>and</strong> inter-organizational<br />
communication <strong>and</strong> collaboration. The storage, dissemination <strong>and</strong> processing of unstructured<br />
information require complex information <strong>and</strong> communication technology (ICT) systems. In this changing<br />
organizational environment, accountability became a hot item, especially because ICT systems<br />
present unique security <strong>and</strong> durability challenges that pose a threat for information quality (Boudrez,<br />
Dekeyser, <strong>and</strong> Dumortier 2005; Bearman 2006).<br />
2. Accountability, ICT <strong>and</strong> the problematic reconstruction of the past<br />
Accountability is the acknowledgement of responsibility for actions, decisions, products, <strong>and</strong> policies,<br />
<strong>and</strong> the obligation to report <strong>and</strong> be answerable for resulting consequences. It is a social relation between<br />
an actor <strong>and</strong> a forum. When the actor is an organization (as it is here), we talk about 'organizational<br />
accountability'. The forum is a designated forum (shareholders, citizens, courts, etc.) or a virtual<br />
entity ('society', 'the people'). A forum will ask an actor to provide insight in its process effectiveness<br />
<strong>and</strong> the lawfulness or unlawfulness of its actions. The forum passes judgement on the conduct of the<br />
actor. It approves or disapproves an account, denounces a policy, condemns behaviour <strong>and</strong> imposes<br />
sanctions. Most actors are part of a complex of relationships, mostly with more than one accountability<br />
forum. Bovens (2006) considers five different types of accountability: political (with fora as representatives,<br />
political parties <strong>and</strong> voters), legal (with courts), organizational (with stakeholders, auditors,<br />
<strong>and</strong> controllers), professional (with peers) <strong>and</strong> social accountability (with interest groups, charities,<br />
etc.)<br />
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Barata <strong>and</strong> Cain (2001) prove that accountability without trusted information as evidence of (past) organizational<br />
policies, products, actions <strong>and</strong> transactions is not possible. This means that each 'accountability<br />
regime' needs an organizational accountability function to safeguard that evidence. Within<br />
this function, corporate governance operates as an accountability agent. It is the system by which organizations<br />
are directed <strong>and</strong> controlled. It operates systems of control designed to ensure that organizational<br />
objectives (like accountability) are met (Porter 2009). Within corporate governance, information<br />
governance establishes opportunities, rules <strong>and</strong> authorizations for information management (Kooper,<br />
Maes, <strong>and</strong> Lindgreen 2010). Both types of governance are means for reaching the objective of<br />
organizational accountability (Porter 2009). In order to improve accountability, they have implemented<br />
new ICT systems, concepts <strong>and</strong> methods to structure, organize, process <strong>and</strong> retain the information<br />
that is used within organizational processes (records), as well as all the information that is used to<br />
demonstrate <strong>and</strong> document how actions <strong>and</strong> transactions have been performed within an organization<br />
(meta data).<br />
Ensuring the quality of this information is an important managerial concern of corporate <strong>and</strong> information<br />
governance. It is a daunting task. Redman (2004, p. 22) states convincingly that information<br />
quality is an ‘unfolding quality disaster’ <strong>and</strong> that ‘bad’ information is ‘the norm’ in industry. Records<br />
<strong>and</strong> their meta data are inaccessible, unavailable, incomplete, inconsistent, irrelevant, untimely, inaccurate,<br />
<strong>and</strong> / or not underst<strong>and</strong>able. Their provenance is (mostly) unknown, just like their contextual<br />
environment (Epler 2006). In addition, ICT creates the problem of technological obsolescence, because<br />
records <strong>and</strong> their meta data have a longer lifespan than the configurations in which they are<br />
created or managed (Boudrez, Dekeyser, <strong>and</strong> Dumortier 2005).<br />
Toebak (2010) states that trusted records <strong>and</strong> their meta data are indispensable as evidence <strong>and</strong> necessary<br />
for making reconstructions of (past) organizational policies, decisions, actions <strong>and</strong> transactions.<br />
Reconstructions of the past depend on the organizations' captured, retained <strong>and</strong> accessible records<br />
<strong>and</strong> meta data. Without trusted records <strong>and</strong> meta data as evidence, reconstruction of the organizational<br />
past becomes problematic. This is influencing organizational accountability negatively, because<br />
corrupt records cannot be used as evidence of past happenings..<br />
3. Research question<br />
Literature on organization science (Meijer 2000), information science (Walsh, <strong>and</strong> Ungson 1991; Bussel,<br />
<strong>and</strong> Ector 2009) <strong>and</strong> archival science (Barata, <strong>and</strong> Cain 2001; Shepherd, <strong>and</strong> Yeo 2003; Toebak<br />
2010) suggests that there are several organizational mechanisms that aim at a reconstruction of the<br />
past <strong>and</strong> that try to realize trusted records: enterprise records management (ERM), organizational<br />
memory (OM) <strong>and</strong> records auditing (RA). These mechanisms have only been studied separately. An<br />
approach in which these organizational mechanisms are combined has never been considered,<br />
probably because they have been developed in different scientific <strong>and</strong> professional disciplines. In this<br />
paper, I want to analyze how ERM, OM <strong>and</strong> RA contribute to the realization of trusted records <strong>and</strong> to<br />
the reconstruction of the past, especially to find out whether my hypothesis that organizational accountability<br />
can be improved with a combination of these three mechanisms, is correct.<br />
4. Mechanisms for reconstructing the past<br />
4.1 Enterprise records management<br />
4.1.1 Records <strong>and</strong> the ‘records value chain’<br />
Records are sets of related data with set boundaries <strong>and</strong> with st<strong>and</strong>ardized form <strong>and</strong> structure (Shepherd,<br />
<strong>and</strong> Yeo 2003). They are meant to be evidence for actions <strong>and</strong> transactions (ISO / DIS 15489<br />
2001). They can be text, (moving) images, sound, database records, or combinations thereof. They<br />
are critical for business process performance, for without them production is almost impossible (Toebak<br />
2010). Meta data, linked to records, document how the actions <strong>and</strong> transactions the records were<br />
part of have been performed. Almost 90 % of the information in an organization are records <strong>and</strong> their<br />
attached meta data.<br />
Widely supported within literature (Toebak 2010; Shepherd, <strong>and</strong> Yeo 2003) is the definition of ERM in<br />
clause 3.16 of the ISO / DIS 15489 (2001) st<strong>and</strong>ard: ‘the field of management responsible for the efficient<br />
<strong>and</strong> systematic control of the creation, receipt, maintenance, use <strong>and</strong> disposition of records, in-<br />
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cluding the processes for capturing <strong>and</strong> maintaining evidence of <strong>and</strong> information about business activities<br />
<strong>and</strong> transactions in the form of records’. According to Bussel, <strong>and</strong> Ector (2009), ERM organizes<br />
the 'records value chain', the chain that ensures that the 'value' of records is used in business<br />
processes to improve performance. This chain includes all records processes, from creation or receipt<br />
to capture, storage, processing, distribution, structuring, publication, use, appraisal, selection, disposal,<br />
retention, security, <strong>and</strong> preservation. ERM is oriented on records processes, the effects of those<br />
processes on business processes, the reconstruction of past policies, products, actions <strong>and</strong><br />
transactions, <strong>and</strong> the dimensions <strong>and</strong> quality requirements of records.<br />
4.1.2 The dimensions of records<br />
Records have two extra dimensions above the seven dimensions normally associated with information.<br />
Those seven dimensions are meticulously analyzed in literature, e.g., Liu (2004) <strong>and</strong> Francke<br />
(2005). Those dimensions are increasing density, decreasing longevity, disappearing uniqueness,<br />
easy duplicability, exploding mobility, increasing fluidity <strong>and</strong> problematic connectivity. For this paper,<br />
the two extra dimensions for records are important.<br />
The first extra dimension for records is 'contextuality': Records only have meaning within a context<br />
(Duranti 1997). <strong>Knowledge</strong> of the (environment of the) policies, products, actions or transactions for<br />
which the records were generated is necessary for extracting meaning out of records. This knowledge<br />
applies to the existing juridical system, the organizational structure, the procedures by which records<br />
are generated <strong>and</strong> the records collection to which the records belong. Groth (2007) suggests that context<br />
can only be shown with extensive documentation, that it is in the past, <strong>and</strong> that it is necessary for<br />
the tracking <strong>and</strong> the reconstruction of business processes. The context of records captures <strong>and</strong> documents<br />
a social situation in meta data to allow a reconstruction of the past. The second extra dimension<br />
is 'historicity': Brown, <strong>and</strong> Duguid (1996) argue that reading the same text creates a sense of<br />
community, that is threatened by dimensions as fluidity <strong>and</strong> connectivity. Latour (1990) impresses the<br />
need for 'immutable mobiles', which express the combination of immutability <strong>and</strong> mobility. Levy (2001)<br />
emphasizes that 'fixity' is necessary to achieve repeatability of communication. Records need fixity,<br />
for they are recorded for later consultation <strong>and</strong> used for the reconstruction of past happenings. For<br />
those reasons their users need to trust them.<br />
4.1.3 The quality requirements of records<br />
In this age of organizational chains, inter-organizational data warehouses, cloud computing, authentic<br />
registrations, <strong>and</strong> computer mediated exchange, it is crucial that actions <strong>and</strong> transactions can be reliably<br />
reconstructed in context. Trusted records are therefore necessary. In information science, there<br />
is much work done on the quality of aspects as system development, software systems, systems development<br />
organization <strong>and</strong> ICT infrastructure (e.g., Wang, Funk, Lee <strong>and</strong> Pipino 2009). This work is<br />
focused on structured information. It ignores records <strong>and</strong> no attention is paid to its extra dimensions<br />
(Bussel, <strong>and</strong> Ector 2009). That may be one of the reasons for the problems with information quality<br />
Redman (2004) mentioned.<br />
The focus in ERM is exclusively on the quality requirements of records, their meta data <strong>and</strong> the ‘records<br />
value chain’. For records <strong>and</strong> their meta data, four quality requirements are recognized in ERM:<br />
integrity (it must be impossible to add or delete data), authenticity (they must have the required presentation<br />
<strong>and</strong> data), controllability (they can be tested on reliability) <strong>and</strong> historicity (they can be reconstructed).<br />
Those requirements realize the fixity of records <strong>and</strong> enable users to trust them <strong>and</strong> to use<br />
them as evidence. The 'records value chain' ensures that records are correct <strong>and</strong> complete in spite of<br />
all h<strong>and</strong>ling that may be necessary. The requirements for this chain are identical to those for<br />
organizational business processes. They are well-known, namely reliable time of delivery, effectiveness,<br />
efficiency, product quality, alignment of needs, product management, <strong>and</strong> compliance (Bussel,<br />
<strong>and</strong> Ector 2009).<br />
4.1.4 Enterprise records management <strong>and</strong> reconstructing the past.<br />
The deficiencies in records <strong>and</strong> in ERM that existed before ICT was introduced, are still there (Redman<br />
2004). One of the reasons may be the focus on structured information in information science. In<br />
ERM the point is made that the failure to realize the quality requirements of records, the 'records<br />
value chain' <strong>and</strong> their meta data, is a threat to the possibilities to reliably reconstruct the past. Because<br />
of that failure, the organizational accountability function can not be successful. ERM, managing<br />
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the ‘records value chain’, ensures that records meet the quality requirements necessary for accountability:<br />
integrity, authenticity, controllability <strong>and</strong> historicity. These requirements ensure records that<br />
can be trusted <strong>and</strong> can be used as evidence. Trusted records improve the possibility of reconstructing<br />
past actions <strong>and</strong> transactions. ERM is process-oriented <strong>and</strong> has only a limited interest in system development,<br />
software systems, <strong>and</strong> ICT infrastructure. That can be a bottle-neck in protecting the quality<br />
requirements of records in digitized environments, for defining preconditions for system development,<br />
software systems <strong>and</strong> ICT infrastructures may not be enough to definitely ensure the quality requirements<br />
of records.<br />
4.2 Organizational memory<br />
4.2.1 What is the organizational memory ?<br />
Organizations have frames of references, shared beliefs, values, routines, structures, <strong>and</strong> artefacts<br />
that reflect the way they have h<strong>and</strong>led their past experiences. OM is the 'stored information from an<br />
organization’s history that can be brought to bear on present decisions' (Walsh, <strong>and</strong> Ungson 1991, p.<br />
61). It is ‘organization’s DNA’ (Spear, <strong>and</strong> Bowen 1999). It is a metaphorical concept that describes<br />
storage, representation <strong>and</strong> sharing of organizational knowledge, culture, power, practices <strong>and</strong> policy.<br />
Kim's (1993, p. 43) view is practical: '(it) includes everything that is contained in an organization that is<br />
somehow retrievable. Thus storage files of old invoices are part of that memory. So are copies of<br />
letters, spreadsheet data stored in computers, <strong>and</strong> the latest strategic plan, as well as what is in the<br />
minds of all organizational members'. Its purpose is to reduce the costs of transactions, to enlarge the<br />
speed of access to past experiences, to help in decision-making <strong>and</strong> to share knowledge. OM is connected<br />
with 'organizational learning', the metaphorical ability of organizations to learn from experiences.<br />
To learn, reliable reconstruction of the past is necessary.<br />
4.2.2 Contents, repositories <strong>and</strong> processes<br />
Four types of memory contents are distinguished: 'information', 'knowledge', 'paradigms' <strong>and</strong> 'skills'.<br />
'<strong>Information</strong>' includes all structured <strong>and</strong> unstructured information in an organization. '<strong>Knowledge</strong>' are<br />
mental templates that give form <strong>and</strong> meaning to an information environment. 'Paradigms' consist of<br />
organizational beliefs, values <strong>and</strong> norms <strong>and</strong> represent behavioural rules <strong>and</strong> ethics. 'Skills' are capabilities<br />
of people, rooted in action, commitment, <strong>and</strong> involvement in a specific context (Stein 1995).<br />
It can be assumed that the repositories imply memory contents. Walsh <strong>and</strong> Ungson (1991) modelled<br />
the OM as a transcendent infrastructure with five 'retention bins'. Those 'bins' are people, culture, processes,<br />
structure, <strong>and</strong> workplace. Moorman <strong>and</strong> Miner (1997) consider organizational artefacts, like<br />
machines, as 'retention bins', because they embody prior learning. Wijnhoven (1996) recognized ICT<br />
systems as a repository. These repositories have different limitations <strong>and</strong> opportunities for storing <strong>and</strong><br />
retaining memory, <strong>and</strong> differ in speed, reliability, susceptibility to degeneration <strong>and</strong> availability. They<br />
are influencing the possibilities for reconstructing the past, for they concern the OM's temporal aspects.<br />
These aspects have been avoided in social research, but they are fundamental for reconstructing<br />
the past. Memories are, for lack of a better word, time-functions (Stein 1995). A durable <strong>and</strong><br />
reliable infrastructure for the OM will help an organization to seek competitive advantages, develop<br />
the organization learning concept, increase autonomy or be accountable (Croasdell 2001).<br />
Holsapple <strong>and</strong> Jones (2004) state that the knowledge processes of acquisition, selection, generation,<br />
assimilation <strong>and</strong> emission bring past knowledge to bear on present activities. Acquisition is acquiring<br />
knowledge from external sources <strong>and</strong> making it suitable for use. Selection refers to the activity of<br />
identifying knowledge, <strong>and</strong> providing it to an activity that needs it. Generation is producing knowledge<br />
by either discovery or derivation from existing knowledge. Assimilation refers to the activities that alter<br />
the state of knowledge by distributing <strong>and</strong> storing it. Emission refers to the embedding of knowledge<br />
into output for release into the environment. It is never stated, but these processes are closely related<br />
to the 'records value chain', for knowledge is largely stored within records.<br />
4.2.3 Organizational memory <strong>and</strong> ICT infrastructure<br />
In OM research, there are two main research directions. The first direction stresses the importance of<br />
a reliable ICT infrastructure for the development of an OM to enable the continuous storage <strong>and</strong> manipulation<br />
of knowledge of ‘good’ quality. Much work is done on ‘organization memory information systems’,<br />
knowledge management systems, hard- <strong>and</strong> software architectures <strong>and</strong> software development<br />
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(e.g., Wijnhoven 1996). The second direction focuses on the human aspects of OM, that is a tool to<br />
stimulate 'organizational learning'. This research tries to make the relationship between human knowledge<br />
creation <strong>and</strong> OM more explicit (Nonaka, Konno 1998). Even in this research direction there is<br />
attention for a reliable <strong>and</strong> durable ICT infrastructure (Croasdell 2001).<br />
An OM is based on 'the will to preserve, in order to reuse [it] later or the most rapidly' (Ribière, <strong>and</strong><br />
Matta 1998, p. 130). The ICT infrastructure of the OM continuously captures <strong>and</strong> analyses the knowledge<br />
assets of an organization. It is a collaborative ICT environment where people can query structured<br />
<strong>and</strong> unstructured information in context to retrieve <strong>and</strong> preserve ‘organizational knowledge’.<br />
Although within OM-literature records <strong>and</strong> their meta data are not mentioned, it is clear that they belong<br />
to the knowledge assets of an organization, <strong>and</strong> that they are recorded, stored, secured <strong>and</strong><br />
maintained within the ICT infrastructure of the OM. This ICT infrastructure safeguards the quality requirements<br />
of information over time.<br />
4.2.4 Threats to the organizational memory<br />
The features of the OM are fragile <strong>and</strong> easily influenced by the restructuring of organizations (Boudrez,<br />
Dekeyser, <strong>and</strong> Dumortier 2005). There are many security <strong>and</strong> durability challenges (Bearman<br />
2006). The durability challenges to the OM are important here. First, hard- <strong>and</strong> software configurations<br />
are needed for accessing, retrieving <strong>and</strong> viewing records, which means that a solution for technological<br />
obsolescence should be available. <strong>Information</strong> has a longer lifespan than the configurations<br />
in which it is created or managed. Secondly, the large influx of information that confronts the infrastructure<br />
of the OM requires automated archiving <strong>and</strong> retrieval functionalities. The ICT infrastructure<br />
needs to adapt, transform, renew <strong>and</strong> grow (Hanseth 2002). Thirdly, information is of a diverse<br />
nature. There is a diversity of object types, operating systems <strong>and</strong> applications. The h<strong>and</strong>ling of this<br />
diversity is not self-evident, while at the same time information can be continuously modified. This<br />
endangers the trust in a reliable OM. Fourthly, information can only be reliably used, when it can be<br />
interpreted by users in its original organizational context. Context <strong>and</strong> information need to be forever<br />
linked to realize access, retrieval <strong>and</strong> preservation over time <strong>and</strong> (thus) to allow reconstruction of the<br />
past.<br />
4.2.5 Organizational memory <strong>and</strong> reconstructing the past<br />
ICT infrastructures are the core of OM research. In OM-literature, durable, continuous <strong>and</strong> reliable infrastructures<br />
are almost considered to be self-evident. This may be incorrect. The temporal dimension<br />
of the OM operates 'memories', time-functions, that are used to reconstruct past policies, products,<br />
actions <strong>and</strong> transactions. Records <strong>and</strong> their meta data are never mentioned, but they are part of the<br />
knowledge assets of an organization. An important contribution of OM is that all organizational knowledge<br />
assets are used for reconstructing the past. Although organizational accountability is not mentioned<br />
as an aim of OM, it can be the result of <strong>using</strong> knowledge to reconstruct past happenings. OM is<br />
especially concerned with ‘organizational learning’ when reconstructing past experiences. In general,<br />
OM ensures that information is preserved as long as is necessary. It provides an ICT infrastructure to<br />
(indefinitely) store information <strong>and</strong> to keep it accessible.<br />
4.3 Records auditing<br />
4.3.1 What is records auditing?<br />
There is little work done on RA. It may be considered as a specialized part of internal (or operational)<br />
auditing. It is independent <strong>and</strong> is designed to improve an organization's operations. It helps organizations<br />
accomplish their objectives by bringing a systematic approach to evaluate <strong>and</strong> improve the effectiveness<br />
<strong>and</strong> efficiency of business processes (Porter 2009). It is a systematic process of planned,<br />
logical <strong>and</strong> purposeful steps <strong>and</strong> procedures to assess [1] the management <strong>and</strong> the quality requirements<br />
of records <strong>and</strong> 'records value chain', [2] the functioning of ERM, <strong>and</strong> [3] the ICT infrastructure<br />
that realizes the OM. RA focuses on both technological as non-technological systems. A records auditor<br />
assesses if the records in the OM are accessible, underst<strong>and</strong>able <strong>and</strong> documented, for only than<br />
fact finding <strong>and</strong> reconstruction of past happenings are possible. RA researches:<br />
The processing of actions <strong>and</strong> transactions within business processes;<br />
The dissemination of trusted records;<br />
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The way the organization accounts for the actions <strong>and</strong> transactions within its business processes;<br />
<strong>and</strong><br />
The reconstruction of actions <strong>and</strong> transactions from business processes over time.<br />
RA checks for deviations in records, their meta data <strong>and</strong> the 'records value chain' that result from<br />
abnormalities in the execution of business processes <strong>and</strong> / or the information systems used. The importance<br />
of RA increases as the complexity of the records, their meta data en their organizational environment<br />
grows. In RA the 'records value chain', combined with the required ICT infrastructure for the<br />
OM, is considered to be a critical success factor for the performance of business processes (Bussel,<br />
<strong>and</strong> Ector 2009).<br />
4.3.2 Area’s of records auditing<br />
Several area’s of RA can be defined (Epler 2006; Bussel, <strong>and</strong> Ector 2009). First, the input <strong>and</strong> output<br />
factors of a business process are problematic. <strong>Knowledge</strong> workers have difficulties with the excessive<br />
amount of records. Records are also often processed in structures, versions <strong>and</strong> file formats, that cast<br />
doubt on their quality requirements. This creates difficulties in the assessment of the reliability of the<br />
OM. Secondly, the 'records value chain', as implemented in organizational practice. RA concentrates<br />
on the use of records in daily practice <strong>and</strong> checks if this is in accordance with established agreements.<br />
The design of the business processes often does not match the h<strong>and</strong>ling of work, leading to<br />
problems in accountability. As a solution, organizations can choose to structure the records within the<br />
OM according to the organizational processes, or the activities in which knowledge workers perform.<br />
Thirdly, the used ICT infrastructure affects shape, characteristics <strong>and</strong> quality of the OM. ICT aspects<br />
are, for instance, complex interfaces, the 'unfriendliness' of ICT systems, inadequate system performance,<br />
few possibilities to control <strong>and</strong> lack of interactivity. ICT is hardly tailored to a user’s context.<br />
<strong>Knowledge</strong> workers are due to make mistakes, which affect the quality of the records. The potential of<br />
ICT to improve the reliability <strong>and</strong> the durability of records should be used. Fourthly, the workplace of<br />
knowledge workers. This is a focus because distractions from colleagues, the administrative processing<br />
to be performed, the planning of the work, the overall organizational context, <strong>and</strong> ergonomics,<br />
have an impact on a reliable processing <strong>and</strong> capture of records in ICT systems. <strong>Knowledge</strong> workers<br />
with a stressful workplace make more 'mistakes' <strong>and</strong> are more likely to ignore procedures of the 'records<br />
value chain'.<br />
4.3.3 Records auditing <strong>and</strong> reconstructing the past<br />
In RA ERM <strong>and</strong> OM are audited to assess the possibility to reliably reconstruct past organizational<br />
actions <strong>and</strong> transactions <strong>and</strong> to offer consultations on adaptations <strong>and</strong> alterations for improving ERM<br />
<strong>and</strong> OM. RA assesses the processing of actions <strong>and</strong> transactions within business processes <strong>and</strong> the<br />
transformation from input to output, the dissemination of trusted records, the way organizations account<br />
for actions <strong>and</strong> transactions within their business processes, <strong>and</strong> the reconstruction of these actions<br />
<strong>and</strong> transactions over time. RA is an mechanism for organizations to use to ascertain themselves<br />
that the available means for reconstructions are in excellent order <strong>and</strong> ready to be used.<br />
5. Conclusion<br />
In this paper, I analyzed the contribution of ERM, OM <strong>and</strong> RA to realizing trusted records <strong>and</strong> to<br />
reconstructing the past. It is my conclusion that:<br />
ERM safeguards the 'records value chain' <strong>and</strong> ensures that records <strong>and</strong> their meta data meet the<br />
quality requirements of integrity, authenticity, controllability <strong>and</strong> historicity <strong>and</strong> (therefore) can be<br />
reliably used in business processes as source of trusted information;<br />
The OM ensures that records <strong>and</strong> their meta data (as a knowledge asset) are preserved. It<br />
provides an ICT infrastructure to (indefinitely) store records <strong>and</strong> keep them accessible.<br />
RA audits ERM <strong>and</strong> OM periodically to assess the possibility to reliably reconstruct past actions<br />
<strong>and</strong> transactions.<br />
ERM <strong>and</strong> OM have a direct contribution to the realization of trusted records <strong>and</strong> their meta data. RA<br />
checks them to verify it is possible to use them to reconstruct past actions <strong>and</strong> transactions. Its<br />
contribution is indirect. All three organizational mechanisms assist organizations in reconstructing the<br />
past <strong>and</strong> can be used for improving accountability. Theoretically, combining these three mechanisms<br />
will certainly improve accountability more than implementing only one of them. ERM <strong>and</strong> OM are<br />
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complementary, Combining the process-oriented emphasis of ERM with the infrastructure-oriented<br />
emphasis of OM will have positive effects on maintaining trusted records <strong>and</strong> on reconstructing the<br />
past over time. RA will ensure that both mechanisms keep doing what they have to do: creating <strong>and</strong><br />
maintaining trusted records, against all odds. My hypothesis seems theoretically viable, but still has to<br />
be validated in practical case studies.<br />
6. Future work<br />
Governments, courts <strong>and</strong> other stakeholders are making increasing dem<strong>and</strong>s for the trustworthiness,<br />
accuracy, <strong>and</strong> reliability of records. Those dem<strong>and</strong>s are creating a need to more clearly define the<br />
'records value chain'. Research is needed to see if recognition of this 'chain' will be a solution for the<br />
problems mentioned in this paper. The preservation of records in the OM is critical. There is as yet no<br />
preservation strategy that guarantees the preservation of records <strong>and</strong> their contextual meta data in<br />
the long term. It is here that much of the future research should be focused, for the ICT infrastructure<br />
is extremely important for preserving records.<br />
Acknowledgements<br />
My thanks to Eric Ketelaar, Peter Horsman, Theo Thomassen, Hans Henseler <strong>and</strong> Peter Toebak who<br />
made valuable suggestions for this evolving paper.<br />
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Bearman, D. (2006) “Moments of risk. Identifying threats to electronic records”, Archivaria Vol. 62, Fall, pp. 15-46.<br />
Boudrez, F., Dekeyser, H., <strong>and</strong> Dumortier, J. (2005) Digital Archiving. The new challenge, IRIS, Mont Saint<br />
Guibert.<br />
Bovens, M. (2006) “Analysing <strong>and</strong> assessing public accountability. A conceptual framework” [online], European<br />
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490
The Question of Selecting Appropriate Methodics of an<br />
ERP System Implementation in Life&Science Enterprises<br />
as an Important Factor of a Project’s Success Based on the<br />
Example of Polish Experiences<br />
Bartosz Wachnik<br />
Warsaw University of Technology, Pol<strong>and</strong><br />
bartek@wachnik.eu<br />
Abstract: The Life&Science branch is one of the most innovative branches in developed countries’ industry. One<br />
of the most important innovation tools in this branch is the IT systems. <strong>Information</strong> systems usage by producers<br />
from the “Life&Science” branch must be m<strong>and</strong>atorily validated. Implementation of IT systems validation is crucial<br />
according to Polish, European <strong>and</strong> American law requirements. Most common IT systems implementation<br />
methodics do not provide for the specific character of ERP implementation, which m<strong>and</strong>atorily require the<br />
validation process. The cycle of <strong>Management</strong> <strong>Information</strong> Systems production in the “Life & Science” branch is<br />
different than in other branches. Incorrectly selected methodics for ERP implementation lead to a validation cost<br />
increase <strong>and</strong> problems in usage of ERP in its life cycle. In this article, the author would like to present the most<br />
important issues in the methodics of ERP implementation which must be m<strong>and</strong>atorily validated in “Life & Science”<br />
branches. The properly selected methodics in this class of implementation is a key factor, not only for the<br />
project’s success but first of all for the safe production in accordance with quality management systems.<br />
Keywords: ERP, methodics, implementation, validation<br />
1. Introduction<br />
The Life&Science branch is one of the most innovative branches in developed countries’ industry. The<br />
“Life&Science” branch includes enterprises that specialise in pharmacology, cosmetology <strong>and</strong><br />
biotechnologies. At present there are about 800 productive enterprises in the “Life&Science” branch in<br />
Pol<strong>and</strong>. They are both SMEs <strong>and</strong> Polish subsidiaries of international corporations. The Life&Science<br />
branch is characterized by high level of scientific knowledge absorption as well as patent <strong>and</strong><br />
innovation usage. The wide IT systems implementation shows the highly innovative character of this<br />
branch, both in a processive <strong>and</strong> in a productive sense. Therefore expenditure on the implementation<br />
of innovative IT projects is higher in this branch compared to other branches. ERP class systems are<br />
crucial IT systems supporting management in productive enterprises in the “Life&Science” branch.<br />
In the ‘Life&Science’ branch a detailed strategy of informatisation including, among other things, an<br />
ERP system, should embrace the reasons for undertaking this IT project that result from the<br />
organisation’s strategy (D. Remenyi, A. Money, M. Sherwood-Smith 2000), its philosophy (M. Parker,<br />
J. Benson 1988), <strong>and</strong>, consequently, long-term goals <strong>and</strong> priorities in project evaluation. Hence,<br />
strategic IT initiatives can be undertaken for one or more reasons.<br />
Possible reasons<br />
for undertaking an<br />
ERP system<br />
implementation as<br />
an IT project<br />
Survival<br />
Innovation<br />
Platform of change<br />
Figure 1: Potential reason for undertaking an ERP system implementation<br />
Strategy related to the survival of an enterprise in the market treats an ERP system implementation<br />
as an instrument enabling a company to survive in the market. An example of this strategy can be<br />
found in ERP system implementation in the ‘Life&Science’ branch in the area of production <strong>and</strong><br />
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Bartosz Wachnik<br />
logistics, where fulfilling requirements for quality st<strong>and</strong>ards is obligatory. Lack of an appropriate ERP<br />
system can prevent an enterprise from functioning in the market.<br />
Strategy related to the need for rapid innovative achievement treats an ERP system implementation<br />
as an instrument helping to achieve a rapid <strong>and</strong> unique process innovation, resulting e.g. in cost<br />
decrease through productive capacity planning <strong>and</strong> stock management.<br />
Platform of change strategy treats an ERP system implementation as a platform for introducing<br />
stable, gradual changes in the system life cycle of an enterprise. This situation takes place in<br />
companies that function very dynamically in the changing market. ERP systems in modern<br />
“Life&Science” productive enterprises are expected to:<br />
Ensure flexibility in the selection of informative – decisive user units in a dynamically changing<br />
internal <strong>and</strong> external enterprise environment.<br />
Possess various business process models, especially in the area: supply chain management,<br />
warehouse management system, production management, advanced lot of row materials<br />
management, advanced lot of products management, advanced lot of half-finished products<br />
management, bar-codes management <strong>and</strong> quality management.<br />
Provide the possibility to adjust systems in accordance with legal requirements <strong>and</strong> current good<br />
practices in business.<br />
Ensure system validation prospectively <strong>and</strong> retrospectively.<br />
Ensure IT systems scalability in accordance with validation determinants.<br />
A key condition concerning ERP class IT systems in the “Life&Science” branch productive enterprises<br />
is obligatory validation. ERP system validation is process that leads to confirming a productive<br />
system’s capability to complete process repeatedly <strong>and</strong> in accordance with defined criteria.<br />
According to current legal requirements every “Life&Science” branch productive enterprise is obliged<br />
to ensure validation productive machines, IT systems <strong>and</strong> laboratory devices that are critical to<br />
production safety. The classical methodics for ERP systems implementation do not follow the<br />
specificity of introducing systems that do not require obligatory validation. The life cycle of ERP<br />
systems implementation in the “Life&Science” is different to other branches. Selecting appropriate<br />
methodics of an ERP system implementation <strong>and</strong> completing a project according to it has an<br />
influence on the quality of implementation, which is manifested in the following issues:<br />
Gaining a temporary competitive advantage by an enterprise which has adapted an ERP system<br />
as an effect of combining an appropriate business strategy supported by a correctly implemented<br />
ERP system.<br />
Precise mapping of business strategy in the area of an implemented ERP system functionality.<br />
The cost of an ERP system validation during its exploitation<br />
The cost of implementation <strong>and</strong> the cost of application maintenance (TCO) during 3 to 5 years of<br />
its exploitation.<br />
The goal of this article is to present the methodics of implementing ERP systems in the<br />
“Life&Science” branch productive enterprises based the Polish experiences, with stress on:<br />
The influence of the validation process on ERP systems implementation.<br />
The influence of validation requirements on the selection ERP systems <strong>and</strong> implementation<br />
partners completing the project.<br />
2. The validation of ERP systems<br />
The validation of IT systems <strong>and</strong> industrial automation is a requirement included in Polish, European<br />
<strong>and</strong> American legal regulations. According to a Ministry of Health Ordinance on the 3 December 2002<br />
concerning Good Manufacturing Practice requirements validation is defined as an activity aimed at<br />
ensuring in a documented way <strong>and</strong> in accordance with Good Manufacturing Practice principles that<br />
procedures, processes, devices, materials, activities <strong>and</strong> systems actually lead to the designed<br />
results. IT systems’ validation should concern only these systems <strong>and</strong> in the scope of their critical<br />
importance, ensure that they comply with quality st<strong>and</strong>ards <strong>and</strong> consequently ensure health <strong>and</strong><br />
safety of commercial end customers. The validation process is not linked to an IT system’s status but<br />
with its purpose <strong>and</strong> a system’s impact on the process of a finished product’s manufacture.<br />
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We can discern two types of IT system validation (Hojdyś K. 2004):<br />
Prospective validation. Performed before launching routine production of pharmaceutical drugs<br />
destined for sale. In this case validation process can progress simultaneously with IT systems<br />
implementation.<br />
Retrospective validation. In the manufacturing process of a product available for purchase<br />
validation is implemented on the basis of collected historical data concerning production, testing <strong>and</strong><br />
series control. In this case validation process is performed following IT system implementation.<br />
Computer systems used in pharmaceutical industry, cosmetic industry <strong>and</strong> sometimes food industry in<br />
areas regulated by Good Manufacturing Practice are complex both on the stage of design, installation<br />
<strong>and</strong> usage. In the manufacturing process productive machines, industrial automation <strong>and</strong> software<br />
cooperate with each other in a strictly planned manner. An American agency (FDA) introduced the<br />
notion known as a system’s “life cycle” in order to enhance our underst<strong>and</strong>ing of the employed<br />
systems’ connections <strong>and</strong> relations network. At present, there are several models of a system’s life<br />
cycle. The most popular models are circular models presented by PDA <strong>and</strong> the “V” model presented<br />
by the GAMP Forum. We have to consider a designed ERP class IT model in every phase of its life<br />
cycle in three aspects:<br />
System as an actual creation of a programmer or engineer commissioned by a user for a specific<br />
process, implementation of defined tasks.<br />
System’s description defining manner of process implementation, system’s architecture, service<br />
method.<br />
Documentation ensuring system’s compliance with descriptive documentation.<br />
According to the definition of validation this process should confirm system’s capability to complete<br />
processes in a repeatable manner <strong>and</strong> in accordance with defined criteria. Underst<strong>and</strong>ing of this<br />
notion by a provider <strong>and</strong> IT <strong>and</strong> administrative services is the key condition in effective validation<br />
implementation. An important characteristic of IT systems is their reciprocal <strong>and</strong> balanced<br />
development <strong>and</strong> validation. Pushing IT systems implementation <strong>and</strong> assuming that documentation<br />
<strong>and</strong> validation can be completed retrospectively at a later stage is very ineffective. It needs to be<br />
stressed that ERP system validation is part of a coherent validation structure, the so-called Master<br />
Plan Validation both for software <strong>and</strong> equipment. Inappropriate manner of IT system validation<br />
generates costs disproportionate to the obtained effects. In case of prospective validation the problem<br />
is to link the IT system implementation methodics with suitably designed methodics of systems<br />
validation in an appropriate manner.<br />
In case of retrospective validation the problem is to design <strong>and</strong> implement recommendation resulting<br />
from IT system validation. Recommendation consists in a set of tasks (e.g. tests, performing system<br />
regulation, preparing documentation) that have to be completed before determining that a system is<br />
validated. Prospective or retrospective validation supporting IT systems in enterprises from the<br />
„Life&Science” branch is very laborious. In case of retrospective validation creating or recreating<br />
documentation, procedures, completing tests <strong>and</strong> designing reparation procedures present<br />
considerable costs to an enterprise. Well-managed validation strains a total IT system implementation<br />
budget with 4-7% of total costs, while ill-managed validation amount to between 20-30% of total costs.<br />
In Pol<strong>and</strong>, the total cost of computer purchases <strong>and</strong> license purchases inclusive of ERP class IT<br />
system implementation service in a „Life&Science” branch SME amounts to about 1 000 000 PLZ.<br />
Thus the validation cost of a chosen functional system in an ERP system implementation project can<br />
amount to between 70 000 PLZ <strong>and</strong> 300 000 PLZ. It’s worth underlining that ERP system is one of<br />
many different IT systems that require validation. Such a noticeable difference in the cost of<br />
validation project results from the following factors:<br />
Inappropriate choice of methodics for completing an ERP system implementation project:<br />
methodics that does not comply with validation requirements.<br />
Lack of knowledge concerning implementing IT systems projects in productive enterprises in the<br />
“Life&Science” branch.<br />
Lack of knowledge concerning implementing IT systems projects in IT companies.<br />
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3. Criteria of ERP selection <strong>and</strong> implementation partner selection<br />
A key condition of the ERP implementation in “Life&Science” enterprises is their obligatory validation.<br />
This requirement directly determines:<br />
Criteria of ERP system selection.<br />
Criteria of implementation partner selection.<br />
Selecting an ERP system that is going to be implemented <strong>and</strong> then validated as well as selecting an<br />
implementation partner has to be treated as a separate organisational project preceding an ERP<br />
system implementation. It is far more complicated <strong>and</strong> laborious than for parallel projects in other<br />
branches. Numerous ERP system presentations, referential visits <strong>and</strong> interviews with consultants that<br />
will take part in the project or even preliminary functional analyses aimed at identifying a detailed<br />
scope of the project are common practice in ERP system selection. In the „Life&Science” branch<br />
selecting a final partner responsible for an ERP system implementation <strong>and</strong> validation preparation is<br />
often preceded by an additional auditing of the partner’s enterprise. It is recommended by IT system<br />
implementation methodics in the „Life&Science” branch enterprises known as GAMP 4.0. An audit is<br />
aimed at confirming a supplier’s information concerning the project’s implementation methodics,<br />
project group’s competence, potential <strong>and</strong> means of ensuring quality. The audit’s report is the basis of<br />
running a risk analysis for selecting a specific supplier. The table no. 1 presents important ERP<br />
system selection criteria <strong>and</strong> implementation partner selection criteria. While selecting ERP software<br />
we should pay close attention to the verification of system’s functionalities that will be subject to<br />
validation. St<strong>and</strong>ard ERP systems are often increasingly supplemented with additional functionalities<br />
dedicated to the “Life&Science” branch, the so-called vertical solutions. These solutions are designed<br />
by ERP software producers or software companies that closely cooperate with ERP software<br />
producers. Selection of an ERP system for a “Life&Science” branch enterprise will give us two<br />
alternatives: either adapting a st<strong>and</strong>ard ERP system that aligns with our client’s functional<br />
requirement or purchasing a st<strong>and</strong>ard ERP system inclusive of a vertical solution designed for the<br />
„Life&Science” branch. We need to underline that both types of solutions are attractive to the<br />
„Life&Science” branch enterprises <strong>and</strong> correspond to their needs.<br />
4. Methodics of ERP Implementation<br />
Implementing an integrated ERP class system is a complicated project. As far as the level of<br />
complexity, implementation period <strong>and</strong> financial budget are concerned, it is one of the biggest IT<br />
investments for an enterprise. The ERP system implementation period in an SME productive<br />
enterprise from the “Life&Science” branch employing 200 – 300 people differs between 8 <strong>and</strong> 18<br />
months. This type of project usually requires employing about 3-4 consultants <strong>and</strong> programmers by<br />
the implementation partner <strong>and</strong> parallel number of key system users by an implementing enterprise.<br />
In Pol<strong>and</strong>, this type of project is realised on the basis of fixed budgets. In Europe <strong>and</strong> USA this type of<br />
project is implemented on basis of flexible budgets adjusted to changing project requirements. The<br />
cost of ERP system implementation in the “Life&Science” branch is usually higher than parallel<br />
implementation project in the other branches. Every producer offering their ERP system recommends<br />
defined methodics, e.g. SureStep methodics for Dynamics Nav or Dynamics AX systems offered by<br />
Microsoft or ASAP methodics for SAP system. In ERP system implementation project, apart from<br />
methodics recommended by different producers, we can distinguish the following tasks: opening<br />
meeting, often called implementation planning session, technological project, key users’ training<br />
within ERP system functionality range, functional analysis, system parameterising <strong>and</strong> programming,<br />
preliminary tests <strong>and</strong> system tuning, data migration, designing user manual <strong>and</strong> project<br />
documentation, acceptance tests, training final users, system launching <strong>and</strong> post-implementation<br />
support. It needs to be stressed that implementing an ERP system is first of all an organisational<br />
project, not an IT project. Since this decision has a strategic importance for an enterprise, it requires<br />
self-evaluation, analysis <strong>and</strong> thorough change of business processes. St<strong>and</strong>ard methodics provided<br />
by an ERP producer are not designed for specific requirements of the “Life&Science” branch<br />
enterprises. The GAMP manual presents an IT system life cycle in reference to its validation used in<br />
the “Life&Science“ branch enterprises. The “V” model is a st<strong>and</strong>ard process model (ISPE).<br />
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Table 1: Criteria of ERP selection <strong>and</strong> implementation partner selection<br />
Criteria of ERP systems selection Criteria of implementation partner selection<br />
1. Ensuring required specialized functionalities enabling<br />
servicing of business process that will be subjected to<br />
validation, e.g.<br />
• Possibility of completing pick-up process <strong>and</strong><br />
warehouse release process <strong>using</strong> the First Expire<br />
First Out method.<br />
• Warehouse management system has to ensure<br />
the so-called “traceability”: the possibility to fully<br />
monitor the history of raw materials, materials,<br />
wares <strong>and</strong> products from the moment of entry to<br />
the warehouse, through production cycle to<br />
product to product release including information<br />
on who subsequently received the product. This<br />
functionality is crucial when it is necessary to<br />
identify raw materials that are used as ingredients<br />
of a drug that has to be withdrawn from the<br />
market. In this case the traceability functionality<br />
enables us to associate a required batch of<br />
contaminated drugs with raw materials batches<br />
that have been used in the drugs production.<br />
• Managing the batch of product status in a quality<br />
control context. A System on the basis of defined<br />
statuses, should manage the raw materials’ <strong>and</strong><br />
half-finished products’ flow within warehouse<br />
structure.<br />
• Managing access right <strong>and</strong> possibility to monitor<br />
modifications of specific records in ERP system<br />
database.<br />
2. Architecture enabling ERP system integration with<br />
other IT systems of industrial automation e.g.<br />
scales. This type of interface responsible for<br />
integration should be validable if required.<br />
3. The possibility of validating an ERP system within<br />
a defined range.<br />
4. The possibility of further ERP system<br />
developments in accordance with validation<br />
allowing low cost system maintenance, the socalled<br />
TCO (Total Cost of Ownership)<br />
User Requirments<br />
Specification URS<br />
Functional<br />
Specification FS<br />
Design<br />
Specification DS<br />
Computer system design<br />
1. Competence of implementation partner in terms of<br />
implemented functionalities complying with validation<br />
requirements.<br />
2. An implementation partner must have access to a<br />
group of consultants who have knowledge <strong>and</strong><br />
documented experience in completing similar ERP<br />
implementation projects.<br />
3. Organisational structure of project should ensure<br />
knowledge transfer concerning an ERP system’s<br />
functionality from an implementation enterprise to<br />
key system users.<br />
4. A partner should complete an implementation project<br />
in accordance with ERP system implementation<br />
methodics concerning validation conditioning both<br />
prospective <strong>and</strong> retrospective. Methodics should<br />
includes e.g.<br />
• Dividing the whole implementation process into<br />
task that should be precisely defined.<br />
• Full documentation that has to be completed<br />
during project’s implementation, e.g. tests script<br />
used in acceptance testing.<br />
• Verification procedures concerning user<br />
requirements specification completion.<br />
• Adjusting procedures <strong>and</strong> approval procedures<br />
for functional specification <strong>and</strong> user<br />
requirement specification.<br />
• Procedures for creating <strong>and</strong> testing parameters<br />
setting.<br />
• Procedures for creating <strong>and</strong> reviewing source<br />
code in case of programming.<br />
• Procedures for testing software <strong>and</strong> its<br />
documentary evidence.<br />
• Reporting procedures concerning error <strong>and</strong><br />
discordance elimination in created software.<br />
• Software version control procedures.<br />
• Procedures concerning enhancing functional<br />
changes during project implementation.<br />
Process<br />
Qualification PQ<br />
Operational<br />
Qualification OQ<br />
Installation<br />
Qualification IQ<br />
Figure 2: Life cycle of the “V” computer system in reference to its validation according to the GAMP<br />
manual (Hojdyś K. 2004)<br />
The system under-construction <strong>and</strong> then operation moves across the “V” line starting from the top left<br />
corner to the top right corner of the line. We need to underline to underline that this is a st<strong>and</strong>ard IT<br />
system life cycle <strong>and</strong> it has to be adapted to the ERP class IT system requirements. Important general<br />
rules (Hojdyś K. 2004) of practical “V” model usage are:<br />
Documents in the left <strong>and</strong> right corners of the letter “V” have to be mutually coherent.<br />
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Bartosz Wachnik<br />
User’s requirement specification <strong>and</strong> relative functional specification as well as design<br />
specification should be determined by one system.<br />
The constructed system has to correspond with design specification.<br />
Documents <strong>and</strong> relative tests placed in the right corner of the letter “V” must test all the specified<br />
system parameters.<br />
All the documents <strong>and</strong> requirements presented in the documents have to comply with legal<br />
regulation for Good Production Practice.<br />
In order to efficiently implement an ERP system in the “Life&Science” branch, the project has to be<br />
realised on the basis of specifically designed methodics that comply with validation requirements. A<br />
modified system life cycle “V” that adapts to specific ERP system requirements is most broadly used.<br />
Table 2 presents <strong>and</strong> characterises stages of system life cycle according to the “V” model with<br />
references to parallel ERP system implementation project tasks. Presented methodics enable to<br />
complete prospective validation. An important step in system validation is creating a detailed<br />
validation plan for an ERP system that is going to be implemented. This plan has to comply with the<br />
Main Validation Plan in a “Life&Science” enterprise.<br />
Table 1: ERP system implementation methodics in a „Life&Science” branch enterprise<br />
Tasks in an ERP<br />
implementation project<br />
Defining ERP system<br />
implementation contract<br />
details i.e. implementation<br />
range <strong>and</strong> implementation<br />
budget<br />
Signing an ERP system<br />
implementation<br />
agreement in a<br />
„Life&Science” branch<br />
enterprise.<br />
Opening meeting, the socalled<br />
Implementation<br />
Planning Session<br />
Training key users in<br />
range of ERP system<br />
functionalities.<br />
Steps according<br />
to the V model<br />
User<br />
Requirements<br />
Specification<br />
(URS).<br />
User<br />
Requirements<br />
Specification<br />
(URS).<br />
(URS – User<br />
Requirements<br />
Specification).<br />
Functional analysis (URS – User<br />
Requirements<br />
Specification).<br />
Comments<br />
Detailed identification of an ERP system implementation<br />
range vs. system’s validation range Defining a business<br />
process master list that is critical in reference to ERP<br />
system validation. Identifying detailed number <strong>and</strong> range<br />
of processes implemented <strong>and</strong> then validated in ERP<br />
system will enable us to precisely define implementation<br />
budget <strong>and</strong> validation budget.<br />
Signing an agreement can take place after a thorough<br />
analysis of a selected ERP system <strong>and</strong> implementation<br />
partner. It is important to conduct an audit of the<br />
implementation partner. According to the GAMP 4.0<br />
manual it is crucial in case of ERP class systems.<br />
Meeting of the whole project group on the implementation<br />
partner side <strong>and</strong> client’s side aimed at discussing <strong>and</strong><br />
defining:<br />
A detailed project realisation schedule<br />
Notions that will be used in project’s realisation<br />
Project’s organisational structure<br />
Detailed implementation methodics<br />
Project <strong>and</strong> quality management procedures<br />
Project documentation<br />
Training key users within the range of ERP system<br />
functionalities. Training must be completed with<br />
documentation containing detailed range of trainings,<br />
knowledge transfer methods <strong>and</strong> training’s organisation.<br />
Key users acquainted with the basics of ERP system<br />
functioning will realise project tasks included in functional<br />
analysis more efficiently.<br />
The basis of launching a validation cycle possesses a<br />
detailed specification of user’s requirements, the so-called<br />
URS that contained detailed requirements for every<br />
process included in the business process master list. In<br />
the first stage „Life&Science” branch specialists create a<br />
preliminary URS version. In the second stage, following<br />
selection of the ERP system supplier, the team should<br />
create a final URS version. Developed <strong>and</strong> approved<br />
URS is a key computer system’s specification <strong>and</strong> should<br />
be included in an annex to an ERP system<br />
implementation contract. On the basis of URS, within<br />
functional analysis realisation, we should develop:<br />
ERP Functional Specification<br />
ERP System Design Specification<br />
496
Tasks in an ERP<br />
implementation project<br />
Steps according<br />
to the V model<br />
Functional analysis (FS -Functional<br />
specification)<br />
Functional analysis Design<br />
Specification<br />
System parameterising<br />
<strong>and</strong> programming<br />
Preliminary tests <strong>and</strong><br />
system adjusting<br />
ERP system<br />
design<br />
ERP system<br />
design<br />
Data migration ERP system<br />
design<br />
Final design of user<br />
manuals <strong>and</strong> project<br />
documentation<br />
ERP system<br />
design<br />
System acceptance test Installation<br />
qualification<br />
Bartosz Wachnik<br />
Comments<br />
Functional specification defines the manner in which<br />
processes defined in the URS stage will be operated by<br />
an ERP system. Functional specification should include:<br />
Description of functions completed by the system.<br />
Algorithms of functions completed by the system.<br />
Flow of documents completed by the systems as part of<br />
separate processes<br />
User’s interface description within the range of completed<br />
functions for separate processes<br />
Methods of compiling, processing <strong>and</strong> archiving data<br />
Description of problems concerning data protection e.g.<br />
users’ access rights template.<br />
System design specification defines what requirements<br />
should be fulfilled in regard to:<br />
Reconstructing specifications for ERP software <strong>and</strong><br />
devices cooperating with ERP<br />
User manuals concerning ERP.<br />
Operating procedures for ERP system installation,<br />
environment reconstruction <strong>and</strong> data back-up.<br />
Training service for situations concerning data protection<br />
<strong>and</strong> emergency procedures.<br />
Correct installation of system software <strong>and</strong> application<br />
software cooperating with ERP.<br />
Software license, installation versions, back-up copies.<br />
Power supply protection for critical devices cooperating<br />
with ERP.<br />
Realisation of this task includes the following activities:<br />
ERP system parameterising, e.g. warehouse routing.<br />
ERP system software, e.g. invoice printing software or<br />
goods dispatched notes/ goods received notes software.<br />
Interface programming between an ERP system <strong>and</strong><br />
other IT systems, e.g. scaling system.<br />
Preliminary tests will be completed together i.e. both by<br />
key system users <strong>and</strong> by key consultants. Preliminary<br />
tests have to be conducted on the basis of scripts<br />
prepared beforeh<strong>and</strong>. In case of differences between<br />
system settings <strong>and</strong> requirements’ definition in functional<br />
system analysis, the system is subject to adjusting<br />
regulation. Error elimination on the earliest stage of<br />
system design saves time dedicated both to project<br />
implementation <strong>and</strong> formal validation.<br />
Data migration task includes the following activities:<br />
Preparing data migration tools<br />
Migration data cleansing<br />
Converting data to ERP system<br />
Completing a data migration report<br />
Final design, completion <strong>and</strong> verification of project<br />
documentation i.e.:<br />
System management procedures description (system<br />
manuals)<br />
User manual.<br />
Data migration completion report.<br />
Training completion report.<br />
Installation qualification is aimed at verifying a configured<br />
ERP system in regard to requirements included in the<br />
design specification. This task requires completion of<br />
acceptance tests <strong>and</strong> completed documentation’s<br />
verification within the range of:<br />
Reconstructing specifications for ERP software <strong>and</strong><br />
devices cooperating with ERP<br />
User manual linked to ERP.<br />
ERP system installation operating procedures,<br />
environment reconstruction <strong>and</strong> data back-up.<br />
Training service for situations concerning data protection<br />
497
Tasks in an ERP<br />
implementation project<br />
Steps according<br />
to the V model<br />
System acceptance test. Operating<br />
Qualification<br />
Training final users. Propagation of<br />
awareness<br />
concerning the<br />
used tools<br />
amongst the<br />
employees.<br />
System launching System validation<br />
<strong>and</strong> launching<br />
Post-implementation<br />
support<br />
System acceptance test Performance<br />
Qualification<br />
Bartosz Wachnik<br />
Comments<br />
<strong>and</strong> emergency procedures.<br />
Correct installation of system software <strong>and</strong> application<br />
software cooperating with ERP.<br />
Software license, installation versions, back-up copies.<br />
Power supply protection for critical devices cooperating<br />
with ERP. Any possible errors detected on the<br />
qualification stage should be corrected.<br />
Operating qualification is aimed at verifying a configured<br />
ERP system in regard to requirements included in<br />
functional specification. This task requires completion of<br />
acceptance tests <strong>and</strong> completed documentation’s<br />
verification within the range of:<br />
Operating business processes in ERP system.<br />
Flow of documents in ERP system.<br />
Precision of calculations <strong>and</strong> algorithms for threshold<br />
detection <strong>and</strong> event detection<br />
Generating reports <strong>and</strong> printouts/ hard copies.<br />
Access to data records, modifications <strong>and</strong> copies in ERP<br />
system.<br />
Data transferred to other computerised systems.<br />
Work logs <strong>and</strong> system logs (audit trail)<br />
Any possible errors detected on the qualification stage<br />
should be corrected.<br />
Training end users can be undertaken by the<br />
implementation partner or by key users from the<br />
implementing company. Trainings are aimed at<br />
transferring practical knowledge concerning system’s<br />
functioning.<br />
A system has to be validated before being put into<br />
operation. Validation report should be compiled after<br />
completion of all the testes included in the validation plan.<br />
The decision to launch a system should be preceded by a<br />
risk analysis for the system put into operation. The safety<br />
of clients <strong>using</strong> our products has a superior value. Risk<br />
analysis can indicate in what technological <strong>and</strong> functional<br />
areas system failure may occur. Risk analysis is based on<br />
tests results, opinions of key users from specific<br />
departments <strong>and</strong> opinions of independent experts. On the<br />
basis of this prepared risk analysis report <strong>and</strong> validation<br />
report we can prepare a report approving a system for<br />
operation in productive environment.<br />
System usage After validation completion, an ERP system starts the<br />
phase of exploitation. In case of ERP systems it usually<br />
lasts for about 4-6 years <strong>and</strong> system functions without any<br />
significant upgrade. The GAMP manual recommends<br />
procedures that enhance a system’s stability <strong>and</strong><br />
development. Creating such procedures is a responsibility<br />
of an ERP system user.<br />
Performance qualification is aimed at verifying if an ERP<br />
system functions steadily, in accordance with approved<br />
specifications <strong>and</strong> procedures. Processing qualification is<br />
completed at a defined time after formal launching of an<br />
ERP system.<br />
In the course of an ERP system validation we gain knowledge on the solution under construction both<br />
in the IT, organisational <strong>and</strong> functional context. This knowledge is formally compiled in detailed<br />
validation reports. The following documentation should be completed in the course of ERP system<br />
validation (Rodriguez J. 2003):<br />
Documentation concerning ERP system selection.<br />
Documentation concerning implementation partner selection.<br />
Documentation concerning URS, FS <strong>and</strong> DS completion.<br />
498
Bartosz Wachnik<br />
Tests’ recapitulation containing tests’ effects description inclusive of defining whether their result<br />
was positive, whether any errors were detected <strong>and</strong> the type of detected errors.<br />
Training materials that constituted basis for training both for end <strong>and</strong> key users.<br />
Materials concerning data migration.<br />
Procedures concerning specific business processes service, the so-called SOP, designed in ERP<br />
system.<br />
Procedures concerning specific business processes’ service, the so-called SOP, concerning ERP<br />
system administration.<br />
The GAMP manual presents patterns that are suitable both for documentation <strong>and</strong> procedures<br />
necessary in the exploitation of computerised systems. It is important to adapt these<br />
recommendations to the functioning of the specific ERP systems that we use.<br />
5. Conclusion<br />
The right choice of ERP class system implementation methodics in productive enterprises from the<br />
“Life&Science” branch is one of the key factors for the project’s success. At present enterprises<br />
offering ERP systems or vertical solutions dedicated to the “Life&Science” branch adapt IT system life<br />
cycle based on the “V” model according to the GAMP 4.0 st<strong>and</strong>ard. Thus constructed methodics link<br />
both functional specificity, ERP system technological specificity <strong>and</strong> requirements concerning the “V”<br />
model. It is important for an ERP system receiver to underst<strong>and</strong> how the project will be completed,<br />
therefore an ERP solution supplier should fully present recommended implementation methodics<br />
before launching the implementation. The client has to underst<strong>and</strong> the effective causal links between<br />
successive implementation <strong>and</strong> validation tasks. Recommended methodics should not be treated as a<br />
dogma. Methodics should comply with an enterprise’s specificity, especially in regard to the structure<br />
organisation of an ERP implementation project. It is important for the client to be able to present their<br />
remarks <strong>and</strong> suggestions concerning a proposed implementation conception so that it aligns with the<br />
requirements of an enterprise implementing an ERP system. Before launching a project, an ERP<br />
system provider <strong>and</strong> a company that decided to implement a system should design dedicated<br />
implementation methodics, that is significantly modify st<strong>and</strong>ard implementation methodics offered by<br />
the producer. Thus, the methodics will precisely reflect the specifics <strong>and</strong> the character of a given<br />
implementation. In order to design this type of implementation methodics we should follow the criteria<br />
listed below:<br />
The possibility to stimulate a precise definition of key requirements for users within the range of<br />
the functional analysis which is crucially important in defining User Requirements Specification,<br />
functional specification <strong>and</strong> design specification. The methodics should require confronting the<br />
accumulated knowledge of a system provider <strong>and</strong> the client’s experience <strong>and</strong> expectations.<br />
Guaranteeing a knowledge transfer from consultants to key users both formally, through trainings<br />
<strong>and</strong> h<strong>and</strong>books, <strong>and</strong> informally, during tests, data migration, as well as parametering. Possessing<br />
knowledge about the system by the key users is one of the key factors for an appropriate ERP<br />
system validation.<br />
Guaranteeing a completion of suitable documentation on each implementation stage, if required<br />
by the validation.<br />
Guaranteeing a completion of multileveled tests, i.e. preliminary tests, in-depth tests of selected<br />
functionalities <strong>and</strong> acceptance tests. The methodics should guarantee a suitable documentation<br />
required by the validation within the range of tests completion as well as the regulation of an ERP<br />
system that is being implemented.<br />
The Life&Science branch, especially pharmaceutical companies, is treated as rich compared to other<br />
branches. Implementing management support systems, among others ERP, for this type of<br />
enterprises is more expensive. The reason is the higher labour intensity, resulting mostly from the<br />
questions of validation. Nevertheless, there are cases of implementation where the implementation<br />
budget exceeds the original budget by 100-200% <strong>and</strong> the implementation does not accomplish its<br />
organizational <strong>and</strong> economic goal, e.g. after the validation a system is not recommended for use <strong>and</strong><br />
requires regulation (tunning). Appropriate implementation methodics designed for a given<br />
“Life&Science” branch enterprise may significantly decrease the probability of organizational<br />
turbulence <strong>and</strong> an increase of implementation cost.<br />
499
Bartosz Wachnik<br />
Guaranteeing a knowledge transfer from consultants to key users both formally, through trainings<br />
<strong>and</strong> h<strong>and</strong>books, <strong>and</strong> informally, during tests, data migration, as well as parametering. Possessing<br />
knowledge about the system by the key users is one of the key factors for an appropriate ERP<br />
system validation.<br />
Guaranteeing a completion of suitable documentation on each implementation stage, if required<br />
by the validation.<br />
Guaranteeing a completion of multileveled tests, i.e. preliminary tests, in-depth tests of selected<br />
functionalities <strong>and</strong> acceptance tests. The methodics should guarantee a suitable documentation<br />
required by the validation within the range of tests completion as well as the regulation of an ERP<br />
system that is being implemented.<br />
The Life&Science branch, especially pharmaceutical companies, is treated as rich compared to other<br />
branches. Implementing management support systems, among others ERP, for this type of<br />
enterprises is more expensive. The reason is the higher labour intensity, resulting mostly from the<br />
questions of validation. Nevertheless, there are cases of implementation where the implementation<br />
budget exceeds the original budget by 100-200% <strong>and</strong> the implementation does not accomplish its<br />
organizational <strong>and</strong> economic goal, e.g. after the validation a system is not recommended for use <strong>and</strong><br />
requires regulation (tunning). Appropriate implementation methodics designed for a given<br />
“Life&Science” branch enterprise may significantly decrease the probability of organizational<br />
turbulence <strong>and</strong> an increase of implementation cost.<br />
References<br />
D. Remenyi, A. Money, M. Sherwood-Smith (2000), The Effective Measurement <strong>and</strong> <strong>Management</strong> of IT Cost <strong>and</strong><br />
Benefits, Butterworth-Heinemann, Oxford.<br />
M. Parker, J. Benson (1988), <strong>Information</strong> Economics, Prentice Hall, Upper Saddle River.<br />
Hojdyś K.(2004), Applying the GAMP 4.0 methodics in implementation of IT system validation. Process<br />
optimization on the basis of risk analysis. Oinpharma Ltd. (formerly Polfa Centre for Scientific <strong>Information</strong>),<br />
Warsaw.<br />
International Society for Pharmaceutical Engineering. Good Automated Manufacturing Practice Guide for<br />
Validation of Automated Systems, www.ispe.org<br />
General Principles of Software Validation; (January 2002) Final Guidance for Industry <strong>and</strong> FDA Staff U.S<br />
Department of Health <strong>and</strong> Human Service Food <strong>and</strong> Drug Administration, Washington.<br />
Rodriguez J., Validation of an Enterprise Resource Planning (ERP) System: An SAP Case Study. Journal of<br />
Validation Technology May 2003, Volume 9.<br />
500
PhD<br />
Research<br />
Papers<br />
501
502
<strong>Information</strong> Systems for Production Planning <strong>and</strong><br />
Scheduling <strong>and</strong> Their Impact on Business Performance<br />
Denisa Ferenčíková<br />
Tomas Bata University in Zlin, Czech Republic<br />
ferencikova@fame.utb.cz<br />
Abstract: One of the key activities of production planning <strong>and</strong> scheduling is integrated production management.<br />
In particular, discrete or partially complex production has an impact on many problems otherwise difficult to solve<br />
without <strong>using</strong> an adequate software support tool. Programming advanced planning algorithms lends a broad<br />
accent to optimally utilizing manufacturing resources <strong>and</strong> capacities, resulting in a reduction in production lead<br />
times <strong>and</strong> manufacturing cost savings (e.g. reduced need for overtime <strong>and</strong> cooperation, eliminating the failure to<br />
meet delivery deadlines, etc.). Rigid manufacturing systems (mostly push systems) already prove useless <strong>and</strong><br />
insufficient for most production companies. Due to rapidly changing market conditions, dynamic adjustment of<br />
production plans is becoming extremely important. Implementing a new information system in the area of<br />
production planning <strong>and</strong> scheduling is not always to the benefit of a company. Therefore, it is necessary to know<br />
how to measure the benefits of these applications in relation to the performance of a production process. Defining<br />
efficiency evaluation indicators for software implemented (not just in the manufacturing process) is often a<br />
complicated procedure. The biggest obstacle is the inability to clearly define the benefits of the solution put in<br />
place <strong>and</strong> to separate out issues influenced by any other innovations <strong>and</strong> improvements of a production process.<br />
As regards evaluating an information system implementation, it is necessary to look at changes in actual<br />
production control <strong>and</strong> production planning processes as a whole. A good consultant or a systems integrator not<br />
only sets up software, they also adopt the role of a good teacher - one that helps establish know-how in a<br />
company on a selected application area or aids the introduction of best practices from other similar projects. The<br />
success of system implementation is dependent on many factors. One of the most important of these, in relation<br />
to advanced planning <strong>and</strong> scheduling applications, is the form of production according to differentiation of various<br />
types. This paper also discusses basic dependencies between selected planning algorithms <strong>and</strong> classification as<br />
regards the continuity of a manufacturing process <strong>and</strong> VAT analysis.<br />
Keywords: production planning <strong>and</strong> scheduling, capacity planning, VAT analysis, IS evaluation<br />
1. Introduction<br />
Today, the environment within manufacturing companies is very dynamic. Consequently, the<br />
capability of a production process to rapidly react to altering market conditions is a key weapon for<br />
remaining competitive. A changing market environment causes a rise in complexity as well as the<br />
intensity of production planning. Fortunately, the actual marketplace is bursting with sophisticated<br />
software solutions that can greatly simplify the process of planning <strong>and</strong> scheduling. Generally these<br />
solutions are also able to flexibly react to any immediate alterations in customer dem<strong>and</strong> or the<br />
production process itself.<br />
However, it is not exceptional in reality for a situation in an organization not to change, even after<br />
implementing a costly information system with sophisticated methods for production planning <strong>and</strong><br />
control. Many companies invest considerable financial resources into purchasing various software<br />
solutions, but the results envisaged do not materialize. What is the reason for this? For a concise<br />
explanation, a quote would suffice from the similarly named book by Goldratt (2000): “Technology is<br />
necessary but not a sufficient condition”. In fact, it can be confirmed that this adage holds some truth<br />
in actual practice. Plenty of excellent software solutions are available for production planning <strong>and</strong><br />
control, but not all of them are suitable for every company. Even an impressive <strong>and</strong> sophisticated<br />
information system may not produce positive results if its selection is not preceded by a thorough<br />
analysis of the corporate environment <strong>and</strong> manufacturing process, or if the company <strong>and</strong> its<br />
employees are not adequately poised for implementing it.<br />
Many reasons could be given for unsuccessfully setting up new information systems in reality. In this<br />
paper, <strong>and</strong> in further research, focus is placed on one of these – incorrectly choosing suitable<br />
software for the type of production in question. Every company should be completely familiar with its<br />
manufacturing environment so that it can select the information system most suitable for its purposes<br />
<strong>and</strong> be able to interpret its requirements to the supplier. No business can expect excellent results<br />
from implementation without properly analyzing both its corporate environment <strong>and</strong> the possibilities of<br />
the software application.<br />
503
Denisa Ferenčíková<br />
2. Software tools for production planning <strong>and</strong> control support<br />
Methods <strong>and</strong> software tools for production planning <strong>and</strong> control have been evolving for decades, but it<br />
is only intense development in business informatics recently that has allowed them to be fully<br />
integrated in the planning algorithms of ERP systems or other individual applications for supporting a<br />
production process (Sodomka 2011). A primary distinguishing characteristic of the various planning<br />
methods is the production control principle, i.e. a pull, push or combined system (Fig. 1).<br />
PULL system<br />
Combination<br />
PUSH x<br />
PULL<br />
PUSH system<br />
MRP I MRP II<br />
JIT E-KANBAN<br />
TOC<br />
DBR OPT<br />
APS MSO<br />
SEIBA SRM<br />
N<br />
1960 1970 1980 1990 2000 2010<br />
Figure 1: Evolution of planning methods (modified by Entrup 2005)<br />
Years<br />
One of the first methods to be supported by information systems was Production Control according to<br />
a minimum inventory. This concept was later followed by methods such as MRP I (Material<br />
Requirements Planning) <strong>and</strong> MRP II (Manufacturing Resource Planning), which are still frequently<br />
used in practice (Sheikh 2003).<br />
With a changing market environment <strong>and</strong> growing dem<strong>and</strong>s for flexible manufacturing systems,<br />
st<strong>and</strong>ard push principles in production control are beginning to be dropped in many cases.<br />
<strong>Information</strong> systems producers have also respected this trend <strong>and</strong> are integrating (in their<br />
applications) methods based on pull principles. These are able to plan <strong>and</strong> manage production with<br />
regard to the requirements of Lean manufacturing. Although the core principles of the JIT method<br />
were formulated in Japan as long ago as the 1950s, they were transposed into information systems<br />
some years later. They can be perceived from two perspectives. In a narrow sense, JIT focuses on<br />
managing an internal production process <strong>and</strong> tries to achieve the output desired in the required time,<br />
in prime quality <strong>and</strong> with zero stock. From a wider perspective, JIT aims to bring about the values of<br />
production indicators mentioned above within the whole supply chain (Sledzinski 2004, Sodomka<br />
2011). The most typical example of applying JIT in an information systems environment is Electronic<br />
Kanban (eKanban).<br />
In the late 1970s, when E. M. Goldratt presented his revolutionary Theory of Constraints (later<br />
referred to as TOC), approaches to production planning began to alter. Most companies encounter<br />
the issue that it proves challenging to uniquely determine whether it is better to use push or pull<br />
principles in their production control process. In reality, it is often necessary to combine both<br />
approaches <strong>and</strong>, therefore, information systems producers have introduced new solutions that<br />
support this combination (Goldratt 2000, Sodomka 2011). Examples include a method for address<br />
production called Seiban, <strong>and</strong> others based on the TOC philosophy such as APS (Advanced Planning<br />
<strong>and</strong> Scheduling), DBR (Drum-Buffer-Rope) or OPT (Optimized Production Technology).<br />
More recently, within the development of production planning systems, a typical feature has been a<br />
transition from rigid planning algorithms to various dynamic systems with automated optimization of<br />
the production process. One of the tools mentioned above is the concept of continuous simulation<br />
<strong>and</strong> optimization known as MSO. Despite being one of the most advanced management methods, it is<br />
not often integrated in ERP systems. The next dynamic approach in production planning <strong>and</strong> control<br />
was presented in the late 1990s by German businessman Steffen Berghof. This involved the concept<br />
of cybernetic self-regulatory mechanisms known as SRM. The primary task of SRM is to constantly<br />
compare set goals with actual results then continually update <strong>and</strong> set up relevant parameters in order<br />
to reach <strong>and</strong> maintain the value required (Ferenčíková 2010, Pavlas 2009, Sodomka 2011).<br />
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Denisa Ferenčíková<br />
3. Correctly identifying the type of production process as a key factor for<br />
successfully implementing planning software<br />
Before starting the implementation process, it is absolutely necessary to properly characterize the<br />
type of production concerned <strong>and</strong> the methodology according to which production should be planned.<br />
Following this initial analysis, a company can start choosing the appropriate software support so that<br />
the latter is able to match set conditions according to the firm’s preferences (Laudon 2007). System<br />
integrators sometimes claim that their software adapts to any manufacturing environment <strong>and</strong>, after<br />
initiating implementation, businesses find out that the system is incapable of meeting all their<br />
requirements. Therefore, a thorough analysis is an inevitable step of any implementation project for<br />
every type of information system (not only production planning applications).<br />
In the following parts of the paper, two models have been selected <strong>and</strong> presented for production<br />
process classification. For each type of production the most important requirements are discussed for<br />
planning systems, those which result from the basic characteristics of each kind of production.<br />
Admittedly, there are other appropriate forms of production system classification, but due to the<br />
complex nature of their contents only two are investigated.<br />
However, it must be pointed out that in practice one often faces situations that are not in accord with<br />
any of the following examples of production process classification. It is often impossible to precisely<br />
place a defined production system in one category because individual types of production often<br />
merge with others. In spite of this, each company has to make clear which type of production system<br />
is dominant <strong>and</strong> the requirements for information systems arising from it, before announcing a tender<br />
<strong>and</strong> discussing the matter with potential suppliers.<br />
4. Types of production process according to production continuity <strong>and</strong><br />
software support<br />
The most common way of production classification for use in information systems is delineation<br />
according to production continuity. The manufacturing process can be split into these types (Vollmann<br />
2005):<br />
Discrete (discontinuous) manufacturing. This is characterized by a break in time in the<br />
production process (e.g. tool change, work-piece or tool clamping etc.). The eventual product is<br />
generally based on a bill of material (BOM). Typically, such sectors are engineering <strong>and</strong> the<br />
electronic industry.<br />
Process (continuous) manufacturing. Unlike discrete manufacturing, this proceeds without any<br />
interruption in time <strong>and</strong> is frequently linked to quality management. The sectors that normally<br />
utilize process manufacturing are the pharmaceutical, food <strong>and</strong> chemical industries.<br />
Repetitive line flow manufacturing. Generally consisting of several small <strong>and</strong> closed<br />
manufacturing cells with continuous one-way material flow <strong>and</strong> no buffer stock, it is typical for<br />
assembly lines or for producing components for the automotive industry.<br />
4.1 Requirements relating to planning software for discrete manufacturing<br />
Discrete manufacturing is very complicated for optimum production scheduling due to its limited<br />
capacities. Therefore, any planning software should facilitate flexible preparation with capacity<br />
selection <strong>and</strong> the possibility of alteration. The system must be able to reschedule production in<br />
entirety should it be necessary to suddenly prepare a prioritized job request for inclusion within a<br />
previously scheduled production plan. In so doing, manufacturing capacities have to be utilized to the<br />
maximum, <strong>and</strong> the time of the process must be kept as short as possible. Another very important<br />
factor is active stock management, which is supported by efficiently linking the planning system with<br />
the purchasing process. Discrete manufacturing is also quite cost-intensive, so the ability of the<br />
information system to continually monitor, evaluate <strong>and</strong> eventually simulate the costs of a produced<br />
item for different variants of production plans is highly valued as well (Sodomka 2011, Vollmann<br />
2005).<br />
4.2 Requirements relating to planning software for process manufacturing<br />
One distinction of process manufacturing is high automation, which increases dem<strong>and</strong>s on linking the<br />
information system with the actual manufacturing process, for example, through the use of MES<br />
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(Manufacturing Execution Systems) applications. In terms of production planning, what is especially<br />
important is the ability to track production as well as to identify the goods produced <strong>and</strong> their material<br />
composition. Software often has to support evidence concerning production lots in terms of costs,<br />
waste management <strong>and</strong>, not least, lifetime management (especially in the pharmaceutical sector).<br />
Great emphasis is also placed on quality <strong>and</strong> the ability of the system to manage it effectively<br />
(Sodomka 2011, Vollmann 2005).<br />
4.3 Requirements relating to planning software for repetitive line flow manufacturing<br />
One disadvantage of line flow manufacturing is its low flexibility <strong>and</strong> risk of frequent shutdowns due to<br />
failure of a production facility. The collapse of one machine stops the entire production process in the<br />
manufacturing cell. Nevertheless, its advantages are low production costs <strong>and</strong> a relatively short<br />
process time. However, what does this mean for selection of the planning system? Companies<br />
featuring dominant line flow manufacturing should try to find applications that especially support the<br />
pull or both the pull <strong>and</strong> push principles. The reason for this is that manufacturing cells operate on the<br />
basis of plans but customer delivery is conducted by the pull system (Sodomka 2011, Vollmann<br />
2005).<br />
5. Types of production processes according to VAT analysis <strong>and</strong> software<br />
support<br />
VAT analysis describes the main material flow through the whole production process. The deviser of<br />
this classification was E. M. Goldratt, author of the famous Theory of Constraints (TOC), on whose<br />
principles APS systems are based. Classification according to VAT analysis is not actually very<br />
commonplace but proves quite suitable for selecting planning software.<br />
5.1 V-type manufacturing <strong>and</strong> its requirements for planning software<br />
Production known as type V is characterized by a wide range of final products <strong>and</strong> a small amount of<br />
purchased material. It consists of several points of divergence, in which one semi-finished product is<br />
divided into two or more other semi-products. The technological process applicable for all products is<br />
usually the same; i.e. comprising the same operations in the same order <strong>and</strong> <strong>using</strong> the same<br />
resources. It is primarily utilized by the textile, steel <strong>and</strong> chemical industries (Inman 2011, Umble<br />
1990).<br />
Inputs Production process – type V<br />
Outputs<br />
Routing 1<br />
Figure 2: V-type manufacturing (modified by Inman 2011)<br />
One specific aspect of this type of manufacturing is a reverse bill of materials that is divided into<br />
several different products. The materials used are usually purchased in bulk <strong>and</strong>, therefore, it is not<br />
advisable to focus on reducing inventories <strong>and</strong> implementing JIT principles. Emphasis is placed<br />
instead on increasing production efficiency, as well as possibly utilizing manufacturing resources <strong>and</strong><br />
reducing downtime. Therefore, the information system should particularly support capacity planning<br />
<strong>and</strong> the monitoring of production parameters (e.g. OEE).<br />
5.2 A-type manufacturing <strong>and</strong> its requirements for planning software<br />
A-type manufacturing is inverse to the previous principle. The range of finished products is very<br />
limited but with a production process dem<strong>and</strong>ing numerous subcomponents <strong>and</strong> other raw materials.<br />
The entire production procedure consists of several points of convergent assembly, at which two or<br />
more semi-finished products are assembled to form the next component. Such a manufacturing<br />
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Denisa Ferenčíková<br />
method requires various technological processes for different parts of the final product; some of these<br />
may comprise just two or three operations, whilst others may necessitate many more. A-type<br />
manufacturing is usual in assembly facilities <strong>and</strong> sectors such as the heavy machinery, automotive or<br />
aircraft industries (Inman 2011, Umble 1990).<br />
Inputs Production process – type A<br />
Outputs<br />
Routing 1<br />
Routing 2<br />
Figure 3: A-type manufacturing (modified by Inman 2011)<br />
The information system used for production planning <strong>and</strong> control within an A-type arrangement most<br />
certainly includes BOM (Bill of Material) functionality with an emphasis on the accurate delivery of<br />
components. Additionally, of prime importance is a high level of coordination between the purchase<br />
<strong>and</strong> production processes. A technological layout of production facilities is typical for such<br />
manufacturing, which increases dem<strong>and</strong>s on capacity planning. Therefore, methods based on Theory<br />
of Constraints prove the most suitable, which respect limited resources.<br />
5.3 T-type manufacturing <strong>and</strong> its requirements for planning software<br />
Production denoted as type T contains many similar final products that have in common a limited<br />
number of purchased or produced components. The technological processes used are generally very<br />
similar <strong>and</strong> may consist of divergent points of assembly, at which two or more semi-finished products<br />
are assembled into several variants of the final product. Normally, T-type manufacturing is adopted by<br />
the electronics industry or for the production of consumer goods (Inman 2011, Umble 1990).<br />
Inputs Production process – type A<br />
Outputs<br />
Routing 1<br />
Figure 4: T-type manufacturing (modified by Inman 2011)<br />
This style of production is sometimes referred to as modular. In terms of production take-up, it is<br />
generally the ATO (Assembly-to-Order) or MTO (Make-to-Order) production system where push <strong>and</strong><br />
pull principles are combined. This condition should also be respected in the choice of supporting<br />
software governing production planning <strong>and</strong> control. In T-type production systems it is very common<br />
for materials <strong>and</strong> components to go missing between different orders. Therefore, it is important to<br />
heed the software’s ability to reserve materials for certain orders or implement methods for<br />
designated production with unique numerical identification (Seiban).<br />
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6. Benefits of implemented planning systems in relation to the performance of<br />
the manufacturing system<br />
Every company that wants to be successful in today’s tough competitive environment must produce<br />
<strong>and</strong> sell good quality products with high functionality <strong>and</strong> low prices. Therefore, it is necessary to bear<br />
in mind the so-called magic triangle: quality, cost <strong>and</strong> time. These three conditions can be greatly<br />
affected by good production planning <strong>and</strong> scheduling systems.<br />
The first of them, quality, may be influenced not only by properly selecting the suppliers of raw<br />
materials, but also by a superior planning process with regard to continuous quality control. An<br />
especially important aspect is preventing a shift of waste to the next step in the manufacturing<br />
process. The further this gets within the production procedure, the greater the cost for the company. A<br />
suitable contender for eliminating this problem is, for example, the Kanban method, because any site<br />
<strong>using</strong> Kanban “does not buy” waste from its predecessor.<br />
The next factor – time - must be considered in evaluating the benefits from implementing a new<br />
information system for production planning <strong>and</strong> control. The number of delayed orders is quite<br />
alarming in some manufacturing companies, but software that has been correctly selected <strong>and</strong><br />
implemented should be able to combat this problem. Emphasis is particularly placed on capacity<br />
management <strong>and</strong> the possibility of simulated planning (what-if functionality), which helps to state real<br />
delivery dates.<br />
The last, no less important monitored indicator, is costs. The total costs of a production process can<br />
be influenced by many factors. Determining the ordering time for purchasing material <strong>and</strong> setting-up<br />
the amount of a purchase order are also important elements that can affect stock levels as well as the<br />
costs needed to hold them. Furthermore, planning software should help to reduce work in a process<br />
that also has a major impact on expense. Costs are, in addition, closely linked with the previous two<br />
indicators: poor quality results in rising costs as well as not sticking to delivery dates (increased<br />
expenses through overtime, any necessary cooperation or penalties for failing to meet delivery terms).<br />
When evaluating the benefits from actually implementing planning software, the following<br />
characteristics <strong>and</strong> their values should be primarily monitored before <strong>and</strong> after implementation:<br />
The stock level of input materials<br />
The work-in-process level<br />
Average processing time (if the processing time of different orders is comparable)<br />
Supplier reliability, respectively the average delay time per order<br />
Average capacity utilization, especially for limited resources<br />
The number of overtime hours needed for completing delayed orders <strong>and</strong> the costs for this<br />
overtime allowance<br />
The costs of unscheduled cooperation for completing delayed orders<br />
The percentage of production costs expended on waste<br />
The rise in sales (an increase in productivity of the production process due to better production<br />
scheduling)<br />
Further research by the author, <strong>using</strong> advanced methods for production planning <strong>and</strong> scheduling in<br />
the actual practice of Czech <strong>and</strong>, later, Slovak manufacturing corporations, shall focus on evaluating<br />
the benefits of individual methods according to the above-mentioned criteria, amongst other things.<br />
The values of these criteria for each method will be considered also in relation to the previouslymentioned<br />
types of production processes.<br />
6.1 Consequential research <strong>and</strong> its methodology<br />
The research itself is realised as the combination of qualitative <strong>and</strong> quantitative methodological<br />
approaches as full-valued research alternatives.<br />
A quantitative questionnaire has been sent to Czech <strong>and</strong> Slovak manufacturing companies. The aim<br />
of the quantitative research is to determine the dependence between the successful implementation<br />
of the concrete planning algorithm <strong>and</strong> the specific type of production system, according to above-<br />
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Denisa Ferenčíková<br />
mentioned types of classification. Some identified problems, benefits <strong>and</strong> other interesting topics will<br />
be subsequently discussed directly with selected customers <strong>and</strong> then processed into case-studies.<br />
The second part of research focuses on provider/supplier organisations. It is realised by qualitative<br />
questioning in a form of market research, discussions <strong>and</strong> presentations of concrete software<br />
products. The aim of this qualitative research is to make a comprehensive overview of the Czech <strong>and</strong><br />
Slovak market with applications for advanced production planning <strong>and</strong> scheduling, their extension in<br />
practice as well as specification of their strength <strong>and</strong> weaknesses.<br />
6.2 The aims of research<br />
The objective of the research is to find out the cause of the major problems with selection,<br />
implementation or use of selected information system for production planning <strong>and</strong> control in business<br />
practice. Research should prove or disprove the hypotheses saying that success of implementation of<br />
a chosen solution for production planning <strong>and</strong> scheduling is directly dependent on the type of<br />
production system according to the stated classification criteria. After evaluation of these hypotheses,<br />
it would be possible to verify whether companies decide sensibly when selecting a specific solution for<br />
production planning <strong>and</strong> control or whether the price of the offered product is still the most important<br />
criterion for them.<br />
Also benefits, which in suppliers´ opinion the offered solutions would have for customers <strong>and</strong> real<br />
occurrence of these benefits in practice, will be assessed. Benefits will also be assessed in<br />
dependence on a proper choice of a type of solution, in accordance with the above hypotheses.<br />
7. Conclusions<br />
Even if the current dynamic market environment puts great dem<strong>and</strong>s on the flexible operation of<br />
management, especially on production systems, there are plenty of software solutions available that<br />
can greatly simplify <strong>and</strong> streamline the entire production planning <strong>and</strong> control process. However,<br />
precise selection of the most suitable planning system for the definite type of manufacturing<br />
environment in question, <strong>and</strong> following through with properly conducted implementation is often a<br />
complex task for even the most experienced managers <strong>and</strong> system integrators. The real benefit of an<br />
implemented information system can be negatively influenced by a poor database. The system itself<br />
can be excellent <strong>and</strong> ideal for a company, but its results would never be satisfactory without loading it<br />
with true data <strong>and</strong> maintaining data quality continuously. Poor database quality is often due to wrongly<br />
set material <strong>and</strong> time st<strong>and</strong>ards or due to neglecting the regular updating of relevant data. These <strong>and</strong><br />
many other aspects will be also considered during the investigation on the benefits of planning<br />
systems in relation to company performance, the results of which shall be published over time in<br />
relevant professional journals <strong>and</strong> conference proceedings by the author.<br />
Acknowledgements<br />
This work was supported by IGA UTB, project number IGA/58/FaME/11/D.<br />
References<br />
Entrup, M.L. (2005) Advanced Planning in Fresh Food Industries, Physica-Verlag, Heidelberg, Germany.<br />
Ferenčíková, D. <strong>and</strong> Sodomka, P. (2010) “PSIpenta.com: Specialista na složité výrobní procesy”, IT Systems,<br />
vol. 12, No. 6, pp 14-17.<br />
Goldratt, E.M., Ptak, C.A. <strong>and</strong> Schragenheim, E. (2000) Necessary but Not Sufficient: A Theory of Constraints:<br />
Business Novel, North River Press, Great Barrington.<br />
Inman, R.A. (2011) “Theory of Constraints”, [online], Encyclopedia of Business,<br />
http://www.referenceforbusiness.com/management/Str-Ti/Theory-of-Constraints.html.<br />
Laudon, K.C. <strong>and</strong> Laudon, J.P. (2007) <strong>Management</strong> <strong>Information</strong> Systems: Managing the Digital Firm, Prentice<br />
Hall, Upper Saddle River, New Jersey.<br />
Pavlas, R. (2009) “Modelling <strong>and</strong> Optimalization of Industrial Processes” [online], CVIS,<br />
http://www.cvis.cz/eng/hlavni.php?stranka=novinky/clanek.php&id=57.<br />
Sheikh, K. (2003) Manufacturing Resource Planning With an Introduction to ERP, SCM <strong>and</strong> CRM, McGraw-Hill,<br />
New York.<br />
Sledzinski, V. (2004) „Getting Lean: Why is it easier with an ERP system?“ [online], CVIS,<br />
http://www.cvis.cz/eng/hlavni.php?stranka=novinky/clanek.php&id=3.<br />
Sodomka, P. <strong>and</strong> Klčová, H. (2011) Informační systémy v podnikové praxi, Computer Press, Brno.<br />
Umble M. <strong>and</strong> Srikanth, M. (1990). Synchronous Manufacturing, South-Western Publishing Co., Cincinnati, Ohio.<br />
Vollmann, T. at al. (2005) Manufacturing Planning <strong>and</strong> Control Systems for Supply Chain <strong>Management</strong>, McGraw-<br />
Hill, New York.<br />
509
An Evaluation of web Services Proxies Solutions<br />
Antonio Hidalgo L<strong>and</strong>a, Ian Owens <strong>and</strong> Graham Fletcher<br />
Cranfield University, Academy of Defence, MoD, Shrivenham, U.K<br />
a.hidalgo@cranfield.ac.uk<br />
Abstract: This paper reports on a project that develops an evaluative framework to compare different<br />
technologies that have been proposed for improving the reach of web services (WS). WS are increasingly the<br />
communication method of choice for modern information systems. A problem with WS is that they become less<br />
effective over Networks that are disadvantaged. Disadvantaged networks are characterised by low b<strong>and</strong>width<br />
<strong>and</strong> high latency. Examples may include the provision of web services to mobile phones, or the use of web<br />
services in mobile ad-hoc networks (MANETS). A number of proxy or middleware solutions have been proposed<br />
to extend the reach of WS into disadvantged networks. We have developed an evaluation environment <strong>and</strong><br />
framework to assess different solutions with a few to underst<strong>and</strong>ing their relative strengths <strong>and</strong> weaknesses. In<br />
this paper we discuss the motivation for the work, describe the evaluation framework <strong>and</strong> environment, <strong>and</strong><br />
present the results from our initial experiments. Finally we make some observations <strong>and</strong> recommendations.<br />
Keywords: WebServices, SOA, low b<strong>and</strong> width, proxy<br />
1. Introduction<br />
One of the problems in research looking at web services (WS) <strong>and</strong> disadvantaged networks is the<br />
lack of a common framework that help us to compare <strong>and</strong> evaluate the performance of the different<br />
middleware or proxy solutions proposed to improve the reach of WS in networks that suffer from one<br />
or more disadvantage. Many of the proxy solutions identified in our study were designed with different<br />
purposes in mind. Therefore, it is difficult to compare <strong>and</strong> contrast the results of them directly.<br />
The aim of this research is to provide a common framework that allows comparison of the benefits of<br />
different approaches identified from the literature <strong>and</strong> one that evaluates the performance of each<br />
solution. However, there are a number of different disadvantaged network classes that can be<br />
identified, therefore to cover all aspects of each class with a single solution is not a trivial task. But it is<br />
necessary to underst<strong>and</strong> the strengths <strong>and</strong> weaknesses of each approach in order to make unbiased<br />
decisions on deployment of an appropriate solution to overcome different network disadvantages. Our<br />
framework sets out the methods we used to make these unbiased decisions.<br />
In this paper we demonstrate our framework by testing whether the use of compression techniques<br />
improves the performance of a Service Oriented Architecture (SOA) network. SOA is an architecture<br />
which introduces an extensive overhead on the metadata of its messages. It is a commonly held<br />
belief that it is possible to mitigate this overhead of the SOA protocols with compression <strong>and</strong> therefore<br />
the use of compression based solutions should provide a significant advantage over uncompressed<br />
messaging techniques in disadvantaged networks. We use d our framework to test this belief by<br />
comparing two scenarios:<br />
Connectionless communication. No compression.<br />
Connection oriented, with compression.<br />
1.1 Disadvantaged networks<br />
The classes of disadvantaged networks we selected for this experiment are latency <strong>and</strong> b<strong>and</strong>width.<br />
Other disadvantaged classes can be identified in the literature, such as high mobility, noise,<br />
disruptions or power availability (M<strong>and</strong>yam 2010).<br />
Our main focus is to evaluate SOA, therefore our evaluation is limited to SOA-specific protocols such<br />
as HTTP,XML or SOAP. We consider that lower link layer protocols or even network layer protocols<br />
are not relevant to our evaluation due to SOA being independent to these layers. Having said that, as<br />
far as we are focused just on application layer protocols (HTTP,SOAP)(Booth 2004), we are not<br />
interested in feature disadvantages outside the application layer boundaries. E.g. The topology of the<br />
network (number of nodes, state of the nodes, mobility...) are features included on the network layer,<br />
hence they are not included on our evaluations.<br />
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1.2 Service oriented architecture<br />
Antonio Hidalgo L<strong>and</strong>a, Ian Owens <strong>and</strong> Graham Fletcher<br />
Web Services (WS) are the implementation technology used in many of the major types of SOA<br />
(Booth 2004), therefore we have focused our research on WS. WS bases its messages on HTTP<br />
protocol <strong>and</strong> its meta-data on XML which is added to HTTP messages(Booth 2004). HTTP <strong>and</strong> XML<br />
meta-data can imply a significant overhead due an extensive meta-data format.<br />
1.3 Proxies <strong>and</strong> enhancement mechanisms<br />
Our approach to the problem defines it as an end to end (e2e) scenario, therefore the solutions that<br />
are interesting for us are those which are based on this premise. The most straightforward way to<br />
implement that idea, is by adding two proxies between the two end points. These two proxies will<br />
enhance the communication through the disadvantaged network. The most commonly used<br />
technologies <strong>and</strong> mechanisms available to enhance this type of communication includes<br />
compression, caching, pre-fetching <strong>and</strong> copying <strong>and</strong> forwarding techniques.<br />
Caching <strong>and</strong> prefetching techniques are frequently used to enhance WS over disadvantaged<br />
networks, <strong>and</strong> they can be used to mitigate against latency (Schreiber 2010), or to improve the<br />
communication through mobile networks (Artail 2009) <strong>and</strong> on real-time scenarios (Lam 2008).<br />
However, the content of WS messages can be unpredictable, hence common caching <strong>and</strong> preteching<br />
schemas are difficult to apply if this is case. To improve the performance of these techniques, some<br />
proposals based on artificial intelligence <strong>and</strong> collaborative solutions have been described(Artail 2009,<br />
Ali 2009, Sulaiman 2009).<br />
Copy <strong>and</strong> forwarding is a technique used to assure the delivery of WS messages in low reliability<br />
networks, <strong>and</strong> these techniques are also used on Delay Tolerant Networks (Cerf 2007, Skjervold<br />
2009, Caini 2010).<br />
Data compression techniques are numberous <strong>and</strong> they range from general purpose data<br />
compression algorithms to Document Type Definition (DTD) conscious compression or others<br />
compression oriented to compress XML structures.<br />
The Transport Layer Security (TLS) includes not just security tasks such as session h<strong>and</strong>ling,<br />
ciphering <strong>and</strong> integrity but also includes other issues as compression (deflate algorithm) which could<br />
be applied at same time than the ciphering <strong>and</strong> also could use UDP ports which provides a lightweight<br />
trans- port protocol in the communication (Dierks 2008). We have selected a TLS proxy to test<br />
whether the SOA messaging overhead can be mitigate <strong>using</strong> these compression <strong>and</strong> a lightweight<br />
transport protocol over a disadvantaged networks.<br />
2. Experimental framework<br />
Our experiments are aimed <strong>and</strong> evaluating different technological solutions to the improvement of<br />
SOAP messaging over disadvantaged grids. As mentioned in the introduction our framework<br />
simulates two common characteristics of disadvantaged networks, latency <strong>and</strong> low b<strong>and</strong>width. The<br />
framework is made up of two different virtual machines linked with a virtual network. The service<br />
provider (server) <strong>and</strong> the service requester (client) are hosted in each different machine.<br />
The experiment works by launching a pre-established number of requests from the client. The<br />
requests can be launched simultaneously, therefore queuing <strong>and</strong> load management must be<br />
implemented by the network infrastructure rather than at the application level. The mean <strong>and</strong> decay<br />
values of the exponential distribution is selected to simulate known usage parameters. For example,<br />
the traffic levels generated by 100 users of a chat server.<br />
The services being used are also constructed to simulate real services deployed by NATO troops <strong>and</strong><br />
other organisations working with disadvantaged situations. For this first experiment, the data payload<br />
of the service reply consists of100bytes of uncompressible data, this is similar to the profile of the<br />
jchat servers deployed by NATO. We have deliberately not used highly compressible data as this is<br />
not typical of the data payload of real implementations.<br />
Any technological solution to improve the service success rate must be capable of being inserted into<br />
the structure described. i.e. the service provider <strong>and</strong> consumers must still be communicating via<br />
SOAP over HTTP. We are only interested in technologies that can be added to current commercial<br />
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Antonio Hidalgo L<strong>and</strong>a, Ian Owens <strong>and</strong> Graham Fletcher<br />
implementations rather than solutions that require significant working. For example the aim is to roll<br />
out the existing jchat service closer to the front line, not re-implement it. There fore, all our<br />
modifications <strong>and</strong> possible technologies are implemented in pairs of SOAP proxies,.as shown in<br />
figure 1 The proxies are installed on the same machines as the service provider <strong>and</strong> consumer,<br />
allowing them to communicate locally <strong>using</strong> SOAP/HTTP. Communication between the proxies is over<br />
the disadvantaged network <strong>and</strong> is in the protocol defined by the proposed enhancement.<br />
In order to eliminate any bias to our experiments introduced by this proxying, solutions are not<br />
compared with the initial simulation from figures 4 <strong>and</strong> 7, but with a NULL proxy solution.<br />
Figure 1: Solutions schema: a couple transparent proxies are situated at both sides of the<br />
communication, client <strong>and</strong> server<br />
Experiment 1 - Stream based compression<br />
In this work, we show how the framework works <strong>using</strong> SSH enhancement over proxies with a<br />
simulation of chat web services.<br />
SSH adds TLS layer into the communication, providing compression to the SOA messages.<br />
Two proxy solutions were tested. The null proxy, that communicates via st<strong>and</strong>ard SOAP/HTTP <strong>and</strong><br />
the SSH proxy that still uses SOAP <strong>and</strong> HTTP but with communications running via <strong>and</strong> SSL<br />
encrypted connection.<br />
Each proxy was evaluated in a network scenario with:<br />
B<strong>and</strong>width between 0 <strong>and</strong> 70 (Kbit/s) with an exponential increase based on real technologies:<br />
1Kbit/s, 2Kbit/s, 4Kbit/s, 8Kbit/s, 10Kbit/s, 30Kbit/s <strong>and</strong> 70Kbit/s.<br />
Latency between 100 <strong>and</strong> 800ms with an exponential increase with the following values: 100ms,<br />
200ms, 400ms, 800ms, 1600ms <strong>and</strong> 2000ms.<br />
The service simulated was a chat web service. The service characteristics were: • Service request<br />
had a data payload of 10 bytes.<br />
Service reply had a data payload of 1024 bytes of r<strong>and</strong>om <strong>and</strong> therefore incompressible data.<br />
The interval between service invocations had an mean value of 2 seconds <strong>and</strong> service<br />
invocations were exponentially distributed.<br />
Each proxy was evaluated in each network configuration for 50 service invocations. The parameters<br />
measured were:<br />
The number of successful service invocations. Our experiment defines a successful service<br />
invocation when it takes less than ten seconds; a person waiting more than that time looses<br />
attention to the system (Nielsen 1993).<br />
The time between service request <strong>and</strong> reply for successful invocations. The results reported for<br />
each network configuration are:<br />
The success rate of service invocations for each proxy.<br />
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Antonio Hidalgo L<strong>and</strong>a, Ian Owens <strong>and</strong> Graham Fletcher<br />
The difference in success rates for the NULL <strong>and</strong> SSH proxies.<br />
The statistical significance of the differences between the proxies’ successes rates.<br />
The mean service delivery time for successful service invocations for each proxy.<br />
The difference between the mean service delivery time for successful service invocations for the<br />
NULL <strong>and</strong> SSH proxies.<br />
The statistical significance of the differences between the proxies’ mean service delivery time.<br />
Conclusions were drawn on the validity of the evaluation in areas of experimentation where the P<br />
values for the statistical significance was below 0.05.<br />
Experiment Results<br />
To analyse the data obtained in the experiment we compare the SSL proxy results against the NULL<br />
proxy results, then we obtain the statistical significance of those results, to highlight where are a<br />
significant improvement gain.<br />
The figures 2, 3 <strong>and</strong> 4 show the comparison between the number of successful connections between<br />
the null proxy <strong>and</strong> the SSL proxy. The results of the null proxy (figure 2) are significantly better (more<br />
successful connections) than the results with the SSL proxy (figure 3). The figure 4 shows the<br />
difference between both configurations (null proxy configuration connections less SSL proxy<br />
configuration connections) where we can appreciate that the values are mostly all the time positive<br />
(null proxy configuration has more successful connections than SSL proxy configuration).<br />
Figure 2: Quality approach results: Success rate over 50 connections with a null proxy configuration<br />
The figures 7,6 <strong>and</strong> 5 show the comparison between the successful average times. The results of the<br />
null proxy (figure 5) are significantly better (smaller average times) than the results with the SSL proxy<br />
(figure 6). The figure 7 shows the difference between both configurations, the values of the SSL proxy<br />
configuration less the values of the null proxy configuration. As far as we see in the figure 7 all the<br />
values are bigger than zero, that mean that all the responses of the ssl configuration take more time<br />
to get back a response.<br />
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Figure 3: Quality approach results: Success rate over 50 connections with a SSL proxy configuration<br />
To achieve a robust solution we include a statistical significance in our analysis. The statistical<br />
significance in the case of the response times is given by for each network configuration (b<strong>and</strong>width<br />
<strong>and</strong> latency) gets the difference between the averages of the successful connection between both<br />
proxies configurations (SSL <strong>and</strong> null) that we call threshold, then, in a process of 10.000 times, we<br />
reorder r<strong>and</strong>omly the set of successful connection <strong>and</strong> check if the difference is bigger than the<br />
threshold. We count the number of cases when the value is bigger <strong>and</strong> the half of the cases when the<br />
value is the same. The significance will be given in both sides of the value, the ones near to one <strong>and</strong><br />
the ones near to zero. Hence we consider that the value is statistical significant if the value given is<br />
bigger than 95% or lower to 5%. The results of this algorithm is shown in the figures 9 <strong>and</strong> 8. The<br />
statistical significance of the successful connections is given by a similar way, but the threshold is<br />
given by the different between the successful connection of both configurations (SSL <strong>and</strong> null proxy).<br />
The tables 2 <strong>and</strong> 1 shows the values of the results where the significance is bigger than 95%.<br />
Meanwhile the response time is improve along b<strong>and</strong>width, specially in a delay range around 800ms<br />
(figure 8, table 2), on the dimension of the delay we can see a improvement of the successful<br />
connections rate. The success rate is improved specially with a b<strong>and</strong>width near to 4 MBps, but with<br />
delays higher than 1600 ms we get a gain on the full delay spectrum(figure 9, table 1).<br />
Experiment 1 Conclusions<br />
Our analysis shows for that case, we have as we could expect, some configurations where the<br />
performance between both proxies has not a major significance (statistical significance) while in other<br />
we show that the null proxy have a significant improvement over the SSH proxy.<br />
We have made efforts to document our experiment to ensure it can be repeated with these <strong>and</strong> other<br />
parameters <strong>and</strong> mechanisms, <strong>and</strong> so we have introduced a new framework to allow the comparison<br />
of future experiments looking at improving the reach of WS through the use of proxy technology.<br />
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Figure 4: Quality approach results: Success rate difference between null proxy <strong>and</strong> SSL proxy<br />
configuration<br />
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Figure 5: Quality approach results: Mean values of the responses with null proxies<br />
Table 1: Success rate significance values<br />
B<strong>and</strong>width<br />
Delay<br />
100ms 200ms 400ms 800ms 1600ms 2000ms<br />
1 MBps 1<br />
2 MBps 1 2<br />
4 MBps 10 12 15 12 3 2<br />
8 MBps 3 2<br />
10 MBps 3 2<br />
30 MBps 3 2<br />
70 MBps 3<br />
Figure 6: Quality approach results: Mean values of the responses with SSL proxies.<br />
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Table 2: Mean response times significance values.<br />
B<strong>and</strong>width<br />
Delay<br />
100ms 200ms 400ms 800ms 1600ms 2000ms<br />
1 MBps<br />
2 MBps 2.42667<br />
4 MBps 2.51232<br />
8 MBps 3.52066<br />
10 MBps 3.38152<br />
30 MBps 3.63374<br />
70 MBps 3.67286<br />
Figure 7: Quality approach results, difference between the mean values of the responses in both<br />
proxies<br />
Figure 8: Significance matrix of response times<br />
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Antonio Hidalgo L<strong>and</strong>a, Ian Owens <strong>and</strong> Graham Fletcher<br />
Figure 9: Significance matrix of success connections rate<br />
Figure 10: Region A represents a significative improvement in the response times of null proxy<br />
configuration; region B represents a significative improvement of the success<br />
connections rate of the null proxy configuration<br />
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3. Conclusions <strong>and</strong> further work<br />
We have demonstrated <strong>and</strong> documented a test framework for proxy solutions to improve the<br />
performance of WS over disadvantaged networks that:<br />
Defines a disadvantaged network scenario.<br />
Demonstrates how the data can be gathered.<br />
Demonstrates how the results can be analysed with the view to calculating the statistical<br />
significance of different technologies.<br />
Show how interpret the results to produce a set of guidelines.<br />
We have used the framework to test the validity of an ”obvious” technology improvement that is<br />
currently used, <strong>and</strong> found that the obvious answer is incorrect. It is a small step to find out how SOA<br />
technologies actually performs over disadvantaged grids.<br />
The paper is being extended to test several other obvious solutions such as caching mechanisms,<br />
prefetching, delay tolerance networks <strong>and</strong> other compressions algorithms more focused on the<br />
content. It is also worth adding, that the framework could be extended to include other parameters to<br />
evaluate others disadvantages such as disruptions.<br />
We conclude my reiterating our motivation for the work. That is proper <strong>and</strong> comparable analysis is<br />
needed of technology solutions. It is not sufficient to rely on the results of experiments run by the<br />
proposers of the technology. If the experiments are ran by the proposers of technology the review <strong>and</strong><br />
the analysis is prone to bias. This framework allows the evaluation of the services <strong>and</strong> networks<br />
independent of the technology review.<br />
References<br />
Ali W. <strong>and</strong> Shamsuddin S.M. Neuro-fuzzy system in web client-side caching. In Computer Systems <strong>and</strong><br />
Applications, 2009. AICCSA 2009. IEEE/ACS International Conference on, pages 888 –895, May 2009.<br />
Artail H. <strong>and</strong> Saab S. A distributed system for consuming web services <strong>and</strong> caching their responses in manets.<br />
Services Computing, IEEE Transactions on, 2(1):17 –33, 2009.<br />
Booth D.,Haas H., McCabe F., Newcomer E., Champion M., Ferris C., <strong>and</strong> Orchard D.. Web services<br />
architecture. 2004.<br />
Caini C., Firrincieli R., Cruickshank H., <strong>and</strong> Marchese M.. Satellite communications: From peps to dtn. In<br />
Advanced satellite multimedia systems conference (asma) <strong>and</strong> the 11th signal processing for space<br />
communications workshop (spsc), 2010 5th, pages 62 –67, 2010.<br />
Cerf V., Burleigh S., Hooke A., Torgerson L., Durst R., Scott K., Fall K., <strong>and</strong> Weiss H.. Rfc 4838, delay-tolerant<br />
networking architecture. IRTF DTN Research Group, 2007.<br />
Dierks T. <strong>and</strong> Rescorla E. Rfc5246: the transport layer security (tls) protocol version 1.2. IETF, Aug, 2008.<br />
Lam G. <strong>and</strong> Rossiter D.. A soap-based streaming content delivery frame- work for multimedia web services. In<br />
Asia-Pacific Services Computing Conference, 2008. APSCC ’08. IEEE, pages 1097 –1102, 2008.<br />
M<strong>and</strong>yam G.D. Improving battery life for wireless web services through the use of a mobile proxy. In Personal<br />
Indoor <strong>and</strong> Mobile Radio Communications (PIMRC), 2010 IEEE 21st International Symposium on, pages<br />
2763 –2768, 2010.<br />
Nielsen J.. Usability engineering. Morgan Kaufmann, 1993.<br />
Schreiber D., Aitenbichler E., Goeb A., <strong>and</strong> Muhlhauser M.. Reducing user perceived latency in mobile<br />
processes. In Web Services (ICWS), 2010 IEEE International Conference on, pages 235 –242, 2010.<br />
Skjervold E., Hafsoe T., Johnsen F.T., <strong>and</strong> Lund K.. Delay <strong>and</strong> disruption tolerant web services for<br />
heterogeneous networks. In Military Communications Conference, 2009. MILCOM 2009. IEEE, pages 1 –8,<br />
2009.<br />
Sulaiman S., Shamsuddin S.M., Forkan F., <strong>and</strong> Abraham A.. Autonomous spy c: Intelligent web proxy caching<br />
detection <strong>using</strong> neurocomputing <strong>and</strong> particle swarm optimization. In Mechatronics <strong>and</strong> its Applications,<br />
2009. ISMA ’09. 6th International Symposium on, pages 1 –6, 2009.<br />
519
Enhancing the Success of Electronic Schools in the<br />
Kenyan Context<br />
Hesbon Nyagowa 1 , Dennis Ocholla 1 <strong>and</strong> Stephen Mutula 2<br />
1 University of Zulul<strong>and</strong>, South Africa<br />
2 University of Kwazulu Natal, South Africa<br />
nyagowa_hesbon@yahoo.co.uk<br />
docholla@pan.uzulu.ac.za<br />
MUTULASM@mopipi.ub.bw<br />
Abstract: This study evaluated the success of the NEPAD ESchool Pilot in Kenya. The evaluation was<br />
underpinned by DeLone <strong>and</strong> McLean’s (D$M) IS Success model which consists of seven dimensions, each of<br />
which contributes to the success of the IS. D&M IS success model’s seven dimensions pertinent to the eSchool<br />
system are: system quality, information quality, service quality, intention to use, use, user satisfaction <strong>and</strong> net<br />
benefits. In the adapted model for ESchool Success evaluation, re-specification was undertaken resulting in<br />
introduction of a new dimension (training effectiveness) <strong>and</strong> removal of ‘intention to use’ dimension from the D&M<br />
IS success model. The measurement of the success of each dimension was based on observation of installed<br />
eSchool systems <strong>and</strong> users’ perceptions. Survey was conducted on the study population of six eSchool <strong>and</strong><br />
5,186 eSchool users. The NEPAD ESchool Pilot in Kenya was found to be successful despite challenges of<br />
implementations. This paper discusses factors which were found to negatively impact on the success of NEPAD<br />
eSchool system in Kenya. The paper concludes with recommendations on how the success rate of eSchools can<br />
be improved in the Kenyan context.<br />
Keywords: eSchool; IS evaluation; eSchool success, Kenya, eLearning; improving eSchool success<br />
1. Introduction<br />
<strong>Information</strong> systems (IS) have generally been accepted as tools that improve efficiency <strong>and</strong><br />
effectiveness in operations in many sectors of economies, with the greatest pay-off realized in the<br />
service sector (Quinn & Baily, 1994; Smith, McKeen & Street, 2004). Extant literature supports the<br />
notion that the implementation of IS generally results in the efficient utilization of resources,<br />
particularly when resources <strong>and</strong> capabilities are well integrated (Araya, Chapparo, Orero, & Joglar,<br />
2007). Despite the dearth of information on the impact of IS in the education sector, many economies<br />
have deployed IS in schools with the aim of improving productivity in learning (Goodison, 2002) <strong>and</strong><br />
management operations in schools (Bush, 2002), <strong>and</strong> increasing access to education (Jamtsho &<br />
Bullen, 2007).<br />
Extant literature shows that eLearning has largely been successful, partly because it is cost effective<br />
to the learner (Burgess & Russell, 2003) as the learners do not forgo earning opportunities during the<br />
study period. An eSchool, on the other h<strong>and</strong>, integrates information communication technologies<br />
(ICT) in curricula delivery for students who are attending a school in the physical sense. Benefits that<br />
may translate in cost reduction include enhanced productivity in school administration, enhanced data<br />
flow for policy making, affordable in-service training of teachers, facilitation of collaboration between<br />
students in different schools (Twinomugisha, Callan & Bunworth, 2005) <strong>and</strong> reduced cost of training<br />
students when they join employment.<br />
The New Partnership for African Development (NEPAD) through its e-Africa Commission is piloting an<br />
eSchool system in 17 African countries, including Kenya. The main objective of the NEPAD eSchool<br />
is to improve the quality of graduating students. This would be evident in the extent to which students<br />
fit in the modern work environment which is highly computer intensive. The NEPAD ESchool Pilot has<br />
not achieved its objectives to date (Evoh, 2007) which include an investigation of how the challenges<br />
of eSchool may be addressed to improve success rate. The pilot project is several years behind<br />
schedule which calls for evaluation study.<br />
The current study evaluated the success of the NEPAD ESchool Pilot in Kenya <strong>using</strong> ESchool<br />
Success model which is an adaptation of DeLone <strong>and</strong> McLean’s (D&M) IS Success model. D&M IS<br />
success model comprises seven dimensions each of which contributes to the success of the IS<br />
implementation. Six of the ESchool Success model corresponds contextually with D&M IS Success<br />
model as in table 1 (Nyagowa, Ocholla & Mutula, 2011). One dimension of D&M IS success model,<br />
the ‘intention to use’ was dropped as a new dimension, ‘training for use effectiveness’ was introduced.<br />
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Table 1: Corresponding dimensions of eSchool <strong>and</strong> D$M IS success models<br />
D&M IS Success Model Dimensions eSchool System Success Model Dimensions<br />
System Quality Installed Infrastructure Quality<br />
<strong>Information</strong> Quality Content <strong>and</strong> Communication Quality<br />
Service Quality Service of Technical Personnel Quality<br />
Use Extent <strong>and</strong> Exploitative Use<br />
Intention to Use N/A<br />
N/A Training for Use Effectiveness<br />
User Satisfaction User Satisfaction<br />
Net-Benefits Net-Benefits<br />
The main objective of the current study was to establish the extent to which NEPAD eSchool system<br />
was succeeding <strong>and</strong> determine measures which would improve the success rate. This was<br />
accomplished by assessing the success of each of the seven dimensions of ESchool Success model<br />
<strong>and</strong> identifying factors inhibiting higher level success rate in each dimension. The measurement of the<br />
success of each dimension was based on data collected through observations <strong>and</strong> perception of<br />
eSchool users.<br />
2. Literature review<br />
Over the years, many economies have deployed ICT in education delivery for a variety of reasons.<br />
For example, India lured <strong>and</strong> retained students in formal education by providing ICT access in schools<br />
resulting in reduction of the large number of children without basic education (Nambiar, 2005).<br />
Scotl<strong>and</strong> introduced an eSchool system named SCHOLAR which aims to ‘re-culturalize’ school<br />
management in the maintenance of data <strong>and</strong> adoption of new teaching approaches (Simpson, Payne<br />
& Condie, 2005; Condie & Livingston, 2007). There is also the Smart Schools programme initiated in<br />
Malaysia, which applies a range of technologies in the teaching <strong>and</strong> learning of some subjects<br />
including English, Bahasa Melayu, Science <strong>and</strong> Mathematics (Ya’Acob, Nor & Azman, 2005). The<br />
Smart Schools project places emphasis on the curriculum, pedagogy, assessment methods <strong>and</strong><br />
materials for teaching <strong>and</strong> learning (Ya’Acob, Nor & Azman, 2005). A second version of Smart<br />
Schools called the Sekolah Bastari was later introduced <strong>and</strong> democratizes the school setting as it<br />
allows students to move at their own learning pace. Sekolah Bastari culture sparingly liberalizes<br />
deployment of ICT where the facilities would promote students’ aims (EL-Halawany & Huwail, 2008).<br />
NEPAD ESchool was introduced to both increase access to education <strong>and</strong> improve quality of students<br />
graduating from primary <strong>and</strong> secondary schools in Africa (NEPAD, 2003).<br />
The common ideological framework for the deployment of ICT in education is to increase productivity<br />
in schools (Machin, McNally & Silva in Draca, Sadun & Van Reenen, 2006), impart teamwork <strong>and</strong><br />
lifelong learning habits (Duta, 1999; Ya’Acob, Nor & Azman, 2005; Condie & Livingston, 2007), <strong>and</strong><br />
deal with the dual task of both increasing access to education <strong>and</strong> improving the quality of teaching<br />
(Evoh, 2007). Improving access to education is very critical in developing countries where the human<br />
development index is still very low (United Nations Development Programme, 2010). Implementation<br />
of ICT integration in teaching <strong>and</strong> learning is capital intensive (Sanchez & Salinas, 2008; Hulsmann,<br />
2004; Ryan, 2002; Bates, 2001) as realised in the 15 year project of ‘Enlaces network’ in Chilean<br />
schools <strong>and</strong> other projects. Such heavy investments require close monitoring <strong>and</strong> evaluation to guide<br />
them to success <strong>and</strong> get value from them. DeLone <strong>and</strong> McLean IS Success model which recognizes<br />
information systems as comprising seven dimensions has widely been accepted in the information<br />
systems society. Many studies have applied D&M’s IS success model, albeit with necessary respecification,<br />
while evaluating a variety of information systems in different settings, e.g. the ecommerce<br />
system (Chang, Torkzadeh & Dhillon, 2004; Molla & Licker, 2001), the knowledge<br />
management system (Ong & Lai, 2004) <strong>and</strong> educational course content management system among<br />
others. The current study likewise made re-specification to suit use of D&M IS Success model in<br />
evaluating eSchools.<br />
3. Methods<br />
At present, the NEPAD e-Africa Commission is piloting NEPAD ESchool Systems in six secondary<br />
schools in Kenya (Nyagowa, Ocholla & Mutula, 2011). To investigate the success of the eSchools the<br />
study used survey method. The eSchools <strong>and</strong> their users were considered as population of the study.<br />
The sample frame for the study comprised the six eSchools, 4,936 students <strong>and</strong> 250 teachers. All the<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
six schools were purposively included in the sample to provide insight into variation in the eSchools<br />
settings. Stratified probabilistic sampling of eSchool users was done to reduce the costs of data<br />
collection <strong>and</strong> yield results that could be inferred to the population (Guerrero, 2010). To reduce<br />
sampling error in the study an acceptably large sample was sought, <strong>and</strong> the variability of the sample<br />
characteristics was increased by <strong>using</strong> stratification within schools <strong>and</strong> between schools (Hussmann,<br />
Mehran & Varma, 1990). Stratification between schools was based on the population of eSchool<br />
users. Within each school, stratification was done at class level based on number of students in each<br />
class <strong>and</strong> the gender ratio in the case of co-education school.<br />
The respondents were spread across four levels of education (Forms I, II, III <strong>and</strong> IV). Each dimension<br />
of eSchool Success model was assessed <strong>using</strong> many question items. Blaikie (2009) observes that<br />
when many conditions have to be satisfied, the sample size should be made larger. With the average<br />
degree of freedom of 8 for each dimension, a power of alpha = 0.8, <strong>and</strong> the level of confidence of 0.05<br />
set for the current study, the desired sample size came to 754 (MacCallum, Browne & Sugawara,<br />
1996). To accommodate the use of a split-half in undertaking exploratory factor analysis, the ideal<br />
sample size was doubled to 1508. Data collected was triangulated from observations, interviews <strong>and</strong><br />
a questionnaire (Gupta, 2007). Observation was made on installed infrastructure <strong>and</strong> use of the<br />
eSchool. Interviews were conducted for school principals to get in-depth information on benefits of the<br />
eSchool <strong>and</strong> challenges encountered. The questionnaire facilitated collation of perception of eSchool<br />
users on different attributes of all the six dimensions of ESchool Success model. A total of 776<br />
completed questionnaires were returned. This constituted 51.4% response rate which is considerably<br />
high <strong>and</strong> is attributed to the h<strong>and</strong> delivery of the questionnaire (Maxfield <strong>and</strong> Babbie, 2008).<br />
4. Validation of instruments<br />
The study instruments stood the test of reliability <strong>and</strong> validity. Data was found to be stable in the splithalf<br />
exploratory factor analysis <strong>and</strong> had high reliability, with all dimensions recording an alpha value of<br />
0.7 <strong>and</strong> above apart from the ‘training for use effectiveness’ dimension which recorded alpha value of<br />
0.46. A scatter plot (figure 1) of the alpha from exploratory <strong>and</strong> confirmatory factor analysis show<br />
close correlation which confirms stability in the data sets. To validate the conceptualized seven<br />
dimensions of eSchool Success model, a scree plot of the possible factors was made <strong>and</strong> it revealed<br />
an elbow between five <strong>and</strong> nine component positions. The exact position of the elbow could be<br />
pinned to seven components as demonstrated in Figure 2.<br />
Figure 1: Scatter plots of test <strong>and</strong> confirmatory alpha<br />
Construct validity was established through factor analysis. Seven factors with many measurement<br />
items loading to them, in the same way as was theoretically conceptualised, were confirmed. These<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
two findings confirmed that the conceptualized model was suitable for the study <strong>and</strong> would lead to<br />
reliable <strong>and</strong> valid findings.<br />
Eigenvalue<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
Scree Plot<br />
1<br />
5<br />
9<br />
13<br />
17<br />
21<br />
Component Number<br />
Figure 2: Scree plot of possible factors<br />
5. Presentation of data<br />
25<br />
29<br />
5.1 Success <strong>and</strong> challenges of installed infrastructure<br />
Installed infrastructure ranged from computer laboratories, to computer hardware, operating systems<br />
<strong>and</strong> networks. Computers were connected in star configuration in LAN which was linked to satellite<br />
through VSAT for internet access. The VSATs had been disconnected from the satellite links.<br />
Respondents tended to agree or highly agree that the quality of the installed infrastructure was good<br />
(see Table 2). Respondents lowly rated the quality of the power back-up system <strong>and</strong> the printing<br />
facilities. This is attributed to frequent power outages, unreliable back-up system <strong>and</strong> unavailability of<br />
consumable supplier for Lexmark Laser printers in Kenya.<br />
Table 2: Mean perception of the quality of installed infrastructure<br />
Attribute of installed infrastructure No. Mean<br />
Buildings ho<strong>using</strong> eSchool equipment are suitable for computer laboratories 744 3.3<br />
E- school computer hardware has good speed 757 2.7<br />
ESchool smart boards give clear projection 745 3.1<br />
ESchool software is user friendly 739 3.1<br />
ESchool windows operating system makes it easy for me to navigate the system 747 3.0<br />
ESchool system has reliable power back up 752 2.5<br />
ESchool computer keyboard <strong>and</strong> screens are suitable for my use 753 3.2<br />
ESchool printers are easy to use 753 2.7<br />
5.2 Success <strong>and</strong> challenges of information content <strong>and</strong> communication<br />
The responses could be divided into two categories: those relating to content within the LAN, <strong>and</strong><br />
those relating to communication outside the eSchool. Most respondents were of the opinion that the<br />
content quality was good as shown in Table 3. On the other h<strong>and</strong>, communication effectiveness <strong>and</strong><br />
quality were rated poorly (see variables marked with * in table 3).<br />
523<br />
33<br />
37<br />
41<br />
45<br />
49<br />
53<br />
57<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
Table 3: Perceptions on content <strong>and</strong> communication quality<br />
Aspects of content <strong>and</strong> communication N Mean<br />
Std.<br />
Deviation<br />
It is efficient - getting complete reading materials through the<br />
eSchool system* 749 2.7 1.019<br />
The content retrieved from the eSchool system is specific <strong>and</strong><br />
relevant to curriculum 743 2.9 0.913<br />
Exchange of ideas with peers through e-mail has been<br />
efficient* 751 2.3 1.191<br />
The format quality of content in the eSchool system has<br />
encouraged me to use the system. 744 2.9 0.990<br />
It has been possible to get materials from other eSchools on<br />
time* 745 2.2 1.080<br />
Some teachers in my school participate in developing some<br />
content which is posted to the eSchool system <strong>and</strong> shared<br />
with other eSchools 747 2.6 1.175<br />
I have established friends through interconnection between<br />
my school <strong>and</strong> other eSchools* 746 2.1 1.160<br />
The quality of content <strong>and</strong> its suitability for the curriculum was acceptable to 72.4% of the<br />
respondents. However, quality of communication was unacceptable to 60.7% of the respondents. The<br />
major drawback in communication was limited access to internet connectivity.<br />
5.3 Success <strong>and</strong> challenges of service quality of technical staff<br />
Respondents were asked to rate the technical personnel’s knowledge of their job, the personal<br />
attention they gave to users, <strong>and</strong> how timely their responses were to calls for assistance. These<br />
ratings were divided into expectations <strong>and</strong> perceived actual levels. The level of concurrence was high:<br />
85.9% for the knowledge of work, 77.5% for giving attention to users, <strong>and</strong> 65.4% for timeliness. In this<br />
study, the differences between expected service quality level <strong>and</strong> perceived service quality level were<br />
subjected to a Student T-test to determine whether they were significantly different from zero. Table 4<br />
displays the means <strong>and</strong> Table 5 provides the test statistics.<br />
Table 4: Means of difference in service quality level<br />
Service Gap N Mean Std. Deviation Std. Error Mean<br />
Gap in IS staff knowledge of their work 716 -0.061 1.043 0.0390<br />
Gap in IS staff attention given to users 704 -0.305 1.156 0.0436<br />
Gap in IS staff promptness to tackling user<br />
issues 709 -0.190 1.249 0.0469<br />
The T-test confirms that the gap in IS personnel knowledge of their work was statistically not different<br />
from zero; t = -1.577 <strong>and</strong> p = 0.115. This means that the IS staff actually showed the knowledge level<br />
that they were expected to possess. Corresponding gap in the attention IS technical staff gave to<br />
users <strong>and</strong> the gap in IS personnel promptness in responding to eSchool users were significantly<br />
different from zero. This implies that the attention that was given to eSchool users <strong>and</strong> the<br />
promptness of IS personnel’s responses to technical issues were below expectations.<br />
A consistently high majority of the respondents agreed or highly agreed that the quality of service of<br />
IS personnel was adequate (80.5%), the technical personnel were pleasant (68.3%), <strong>and</strong> that the<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
eSchool system was always kept in good order (63.5%). The overall assessment on these three<br />
points was 2.892, which was high <strong>and</strong> significantly different from 2.0 (see Table 6).<br />
Table 5: T-test statistics<br />
Service Gap T Df<br />
Sig. (2tailed)<br />
Mean<br />
Difference<br />
95% Confidence Interval<br />
of the Difference<br />
Lower Upper<br />
Gap in IS staff knowledge of<br />
their work -1.5771 715 0.1152 -0.0615 -0.1380 0.0150<br />
Gap in IS staff attention given<br />
to users -7.0100 703 0.0000 -0.3054 -0.3909 -0.2199<br />
Gap in IS staff promptness to<br />
tackling user issues -4.0578 708 0.0001 -0.1904 -0.2825 -0.0983<br />
Table 6: T-test of the overall assessment of technical personnel<br />
T df Sig. (2-tailed)<br />
Test Value = 2<br />
Mean<br />
Difference<br />
95% Confidence Interval of<br />
the Difference<br />
Lower Upper<br />
OVSERVQ* 34.047 712 .000 .8920 .8406 .9434<br />
OVSERVQ* is the ‘overall service quality.<br />
5.4 Success <strong>and</strong> challenges of training for use effectiveness<br />
Training quality was found to be effective, with 51.5% agreeing on the variety of methods applied<br />
(figure 3) <strong>and</strong> 78% gained h<strong>and</strong>s-on experience. However, a large majority (88%) required additional<br />
training.<br />
Most respondents (62.2%) complained that the training period was not adequate. In some cases, the<br />
trainer was accused of wasting valuable time, there were frequent power outages, <strong>and</strong> literature was<br />
inadequate. Consequently, many concepts were not well understood by trainees. As a way to improve<br />
training, respondents suggested that the internet connection should be restored; those who did not<br />
benefit from initial training should be given additional training during school holidays; <strong>and</strong><br />
improvements should be made to teaching methods, with users given more time to practice.<br />
Figure 3: Perceptions of the variety of methods applied in training<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
5.5 Success <strong>and</strong> challenges of eSchool extent <strong>and</strong> exploitative use<br />
The study assessed the use of the eSchool system through three parameters: frequency of use,<br />
purpose of use, <strong>and</strong> exploitative or innovative use.<br />
Extent of use<br />
A large proportion (79.6%) of users agreed that the system was easy to use. The frequency with<br />
which the users used the system is high among a slight majority (58.6%). The ease of use of the<br />
eSchool system did not depend on where a user received training. Indeed, a very high majority<br />
(90.4%) of those who trained outside the eSchool system also found the system easy to use.<br />
Majority (61.8%) of respondents said that teachers did not integrate ICT in classroom teaching. The<br />
proportion of teachers disagreeing (53.8%) compared to the proportion of students (62.3%) was<br />
significantly different, since chi-square = 10.14 <strong>and</strong> p = 0.017. The responses elicited by this question<br />
are shown in Table 7.<br />
Table 7: Perception that teachers incorporate the use of the eSchool system in the classroom<br />
Response Frequency Percent Cumulative Percent<br />
Strongly Disagree 251 32.3 34.6<br />
Disagree 198 25.5 61.8<br />
Agree 175 22.6 86.0<br />
Strongly Agree 102 13.1 100.0<br />
Total 726 93.6<br />
A high proportion of the respondents (59.4%) agreed that they used the eSchool system to access<br />
additional material specific to the curriculum. The mean for all the responses is above 2.0. However,<br />
some means are very close to 2.0. All the mean responses were found to be statistically different from<br />
2.0, even though “<strong>using</strong> the eSchool to access lessons taught by teachers in other eSchools” <strong>and</strong><br />
“<strong>using</strong> the eSchool to collaborate with peers” were poorly rated.<br />
Exploitative use<br />
Users engage in the use of the eSchool system for different purposes. A large proportion of the users<br />
(53.3%) agreed that they used the eSchool for independent learning. A small proportion (42.9%)<br />
conceded that they accessed material that was not relevant to the curriculum. Of those who accessed<br />
material not relevant to the curriculum, the majority were teachers (57.5%), with students comprising<br />
42.5%. A large majority (62%) of the respondents agreed that some rules imposed by the<br />
administration prevented their exploitative use of the e-system. The rules affected more students<br />
(62.7%) than teachers (45.2%).<br />
Some of the rules account for the lack of motivation to use the eSchool system. Most (67.4%)<br />
respondents claimed that they had no motivation to use the eSchool system. Besides rules as a<br />
reason for their lack of motivation, some users cited the low computer to user ratio, unavailability of<br />
teachers skilled enough to use the available ICT, <strong>and</strong> outdated learning materials. Those who felt<br />
motivated to use the eSchool gave motivating factors such as: the opportunity to reach a global<br />
network of learners, exposure to new ideas, improved grades in examinations, <strong>and</strong> simplified learning<br />
tasks.<br />
5.6 Success <strong>and</strong> challenges of eSchool user satisfaction<br />
All responses on the level of satisfaction with specific aspects of the eSchool had a mean of 2.5 <strong>and</strong><br />
above. T-test revealed that all the means are statistically different from 2.0, which confirms that the<br />
users were generally satisfied with the stated aspects of the eSchool system.<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
A sizeable proportion of respondents (47.2%) declared that they were satisfied with the eSchool<br />
system. Although the proportion of respondents who were not satisfied was slightly higher than the<br />
proportion satisfied, the mean response was 2.48 <strong>and</strong> was found to be statistically different from 2.0<br />
when subjected to a T-test. This outcome can go either way, <strong>and</strong> therefore more efforts should be<br />
exerted to tilt the outcome in favour of satisfaction. The inconclusiveness of this outcome is also<br />
depicted in the high percentage (76.4%) of respondents who had a complaint about the eSchool<br />
system.<br />
5.7 Success <strong>and</strong> challenges of eSchool net-benefits<br />
A large majority of the respondents agreed that net-benefits accrued from the implementation of the<br />
eSchool system <strong>and</strong> in all facets of net-benefits as conceptualized in this study (see Table 8). A T-test<br />
reveals that all the mean responses of perceived net-benefits are statistically different from 2.0.<br />
Table 8: Means of perceived net-benefits<br />
My parents prefer the eSchool over non eSchools<br />
Infrastructure / resources in eSchools help students perform better<br />
Installation of eSchools helps in the efficient use of resources<br />
Teaching <strong>and</strong> learning through an eSchool is more enjoyable<br />
N Mean<br />
659 2.98<br />
662 3.06<br />
659 3.03<br />
665 3.28<br />
The eSchool system facilitates collaboration between teachers <strong>and</strong> students in<br />
different schools 645 2.82<br />
The eSchool system encouraged me to learn independently<br />
Users of eSchools are willing to offer recommendations for possible improvements<br />
655 2.90<br />
650 2.98<br />
My underst<strong>and</strong>ing of a lesson normally improves when I review the topic from<br />
eSchool content 657 3.00<br />
My team working skills have improved since I started <strong>using</strong> the eSchool<br />
communication system 655 2.90<br />
Measurable net-benefit is a robust means of ascertaining the success of an information system. The<br />
eSchool was implemented to achieve certain objectives which the study now shows it is achieving.<br />
Improving the level of success requires identifying weak areas <strong>and</strong> designing measures to correct<br />
apparent drifts from the desired path.<br />
6. Discussion<br />
The study was designed to ascertain the level of success of the eSchools, identify issues that could<br />
be impeding the success of eSchools <strong>and</strong> collate views of eSchool users on ways of improving the<br />
success of the different dimensions of the eSchool system. These suggestions can be scrutinized<br />
against best practices <strong>and</strong> adapted to the NEPAD ESchool System.<br />
Largely, installed infrastructure was identified as a major area of concern that tends to slow the pace<br />
of eSchool success. The quality of printing facilities <strong>and</strong> power back-up system was poorly rated. This<br />
is similar to a study on complexity of integration of ICT in education in Turkey. Akbaba-Altun (2006)<br />
found out that physical infrastructure including equipment <strong>and</strong> their breakdown was the common<br />
problematic category. Power outages may result in loss of documents, time wastage <strong>and</strong> interruption<br />
in the teaching delivery which cause users to develop negative attitude towards the system. Printing<br />
facility was not accessible because of unavailability of supplies. As a result students may complete<br />
their learning without appreciating how printing is done. The quality of communication was<br />
unacceptable to 60.4% of respondents. Quality of connectivity <strong>and</strong> therefore communication was<br />
adversely affected by the disconnection of VSAT. The users were therefore not exploiting capabilities<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
of eLearning. This is supported by finding in a study of professional development of teachers in which<br />
Ololube (2007) identified poor internet connectivity as one of the barriers to effective professional<br />
development of teachers in Nigeria. In the eSchool situation, lack of interconnectivity will result in<br />
major goals of the eSchool system, including team-working skills <strong>and</strong> lifelong learning (Ya’Acob, Nor<br />
& Azman, 2005; Condie & Livingston, 2007), not be realized.<br />
The cost of internet access in developing countries tends to be high (Ashcroft & Watts, 2005), <strong>and</strong> this<br />
may account for the inability of the Ministry of Education to budget for maintaining internet access in<br />
the eSchools. Organizations reduce access costs by pooling resources <strong>and</strong> subscribing access<br />
through an umbrella body (Adam, 2003; Peterson, 2007). The NEPAD e-Africa Commission had<br />
negotiated access to the internet through the Regional African Satellite Communication Organization<br />
(RASCOM), which is dedicated for use in rural Africa. RASCOM provides state-of-the-art facilities<br />
which allow users to pay for minutes of access in a variety of ways, including the use of scratch cards.<br />
It would be in the interest of NEPAD eSchools’ success if the Ministry of Education pooled the access<br />
requirements of eSchools <strong>and</strong> purchased, as a bundle, satellite access time from RASCOM <strong>and</strong> redistributed<br />
it to the eSchools.<br />
The majority of the respondents (61.8%) disagreed that teachers incorporate ICT in their teaching in<br />
the classroom. In most eSchools, computer hardware were installed in computer laboratories. The<br />
many classes could therefore not access laboratories for most of the teaching. This is similar to<br />
findings on ICT usage <strong>and</strong> perception of social studies teachers in Turkey in which 70.6% of teachers<br />
identified lack of access of existing infrastructure as barrier to ICT usage in teaching <strong>and</strong> learning<br />
(Gulbahar & Guven, 2008). Wide access of ICT would enable the teachers to use the facilities for<br />
teaching <strong>and</strong> give students assignments that may be marked online. Limitation in the distribution of<br />
ICT facilities could be attributed to inadequate funding (Özdemir <strong>and</strong> Kılıç, 2007; Jhurree, 2007).<br />
Insufficient funding was listed by the interviewed principals as one of the main problems bedevilling<br />
the eSchool system.<br />
Majority of respondents agreed that eSchool enhances team working skills <strong>and</strong> lifelong learning skills<br />
with each variable scoring a mean of 2.90. However, chi-square values of 89.238 <strong>and</strong> 53.14 were<br />
relatively low revealing that these perceptions were only weakly supported. This is similar to<br />
evaluation results of Malaysian Smart Schools which found out that over 50% of students valued team<br />
work but were reluctant to work in teams as it was seen as an obstacle to completing exercise<br />
assigned during lessons (Lubis, Ariffin, Muhamad, Ibrahim & Wekke, 2009). Extant literature concur<br />
that the integration of ICT in curriculum delivery empowers students with team working skills <strong>and</strong><br />
abilities for lifelong learning (Duta, 1999; Ya’Acob, Nor & Azman, 2005; Condie & Livingston, 2007).<br />
Achieving this may require re-design of curricula to remove time constraints. In the eSchools, it may<br />
require reduction of breadth of curriculum but compensation with increase in depth which in turn gives<br />
students opportunity for specialist learning strategy as opposed to generalist learning strategy.<br />
Specialist strategy of learning leads to exploitatively use of a system is known to support innovation.<br />
Of the respondents, 53.3% agreed that they exploited the capabilities of the eSchool system for<br />
independent learning, but teachers were not supporting this initiative as reported by 61.8% of the<br />
respondents who also said that teachers did not incorporate the use of ICT in classroom teaching.<br />
This finding concurs with other studies that have confirmed that teachers concentrate on the<br />
development of ICT technical skills (Tondeur, Braak & Valcke, 2007) but fail to use or improve the use<br />
of available infrastructure in classrooms (Ward, 2003). For teachers to productively use ICT in<br />
classrooms, issues of availability of infrastructure, technical competence of the teacher, teachers’<br />
readiness, <strong>and</strong> teachers’ pedagogical skills, must be addressed.<br />
Pedagogical approaches to ICT integration in curricula are known to have wide ranging effects (Yuen,<br />
Law & Wong, 2003). Such pedagogies are different from the usual pedagogical practices that<br />
traditional teachers are trained on (Ya’Acob, Nor & Azman, 2005). The integration of ICT in curricula<br />
requires a pedagogy of inquiry-based learning <strong>and</strong> reflective assessment which have been found to<br />
improve students’ learning <strong>and</strong> meta-cognitive thinking strategies (So & Kim, 2009). Teachers in the<br />
sampled eSchools had not been exposed to pedagogical skills for ICT integration, <strong>and</strong> a large<br />
majority (88%) required additional training. This finding is similar to results from other studies.<br />
Hennessy, Ruthven <strong>and</strong> Brindley (2005) established that teachers are hesitant to use ICT in<br />
classroom teaching partly because of external constraints <strong>and</strong> partly because of the culture of tying<br />
excellent teaching to students passing examination. Pedagogy for passing examination is teacher-<br />
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Hesbon Nyagowa, Dennis Ocholla <strong>and</strong> Stephen Mutula<br />
centred while integration of ICT in curriculum is student centred. Practicing teachers need re-training<br />
to unlearn traditional pedagogies <strong>and</strong> adopt new pedagogies that will both be student-centred <strong>and</strong><br />
make students high achievers.<br />
7. Conclusion<br />
The NEPAD ESchool Pilot in Kenya appears to be succeeding in attaining its major goals of<br />
improving the quality of graduating students by imparting team working <strong>and</strong> lifelong learning skills,<br />
which should make the students better prepared for the current complex workplace. The study<br />
recognizes that basic infrastructure, training <strong>and</strong> user support are in place. Teachers, students <strong>and</strong><br />
parents are supportive of the eSchool system. Each of the six dimensions is succeeding but a lot of<br />
improvement is required. Infrastructure expansion, sustainability <strong>and</strong> internet connectivity is important<br />
in facilitating user access of learning resources. Access points are currently limited to computer<br />
laboratories making it difficult for teachers to integrate ICT in every day teaching of subjects. Lack of<br />
internet connection is threatening exchange of resources <strong>and</strong> ideas between schools <strong>and</strong> peers.<br />
Further studies should be conducted on effective training methods to impart desired pedagogical skills<br />
to teachers <strong>and</strong> also investigate the ‘training for use effectiveness’ dimension to make it better<br />
measure training effectiveness.<br />
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530
The Specification of Competency Questions: An<br />
Ontological Support to Match Business Processes, IT <strong>and</strong><br />
Competences of Professionals<br />
Yadary Ortega-González 1 , Giacomo Carli 2 , Aless<strong>and</strong>ro Gr<strong>and</strong>i 2 <strong>and</strong> Mercedes<br />
Delgado-Fernández 1<br />
1<br />
Technical University of Havana (CUJAE), Cuba<br />
2<br />
University of Bologna, Italy<br />
yog@ind.cujae.edu.cu<br />
giacomo.carli@unibo.it<br />
aless<strong>and</strong>ro.gr<strong>and</strong>i@unibo.it<br />
mdelgado@ind.cujae.edu.cu<br />
Abstract: The need of facing continuous changes in <strong>Information</strong> Technologies appears particularly dem<strong>and</strong>ing<br />
for the common knowledge base of firms <strong>and</strong> competences of professionals. <strong>Information</strong> Technologies (IT) within<br />
business processes need to be linked with the required set of competences that a professional can mobilize. In<br />
order to identify the competences activated along with a change in organizational processes, where IT support<br />
large part of the routines, this study introduces a structured procedure. It combines the activities <strong>and</strong> the IT<br />
involved in an organizational process with the competences that a professional is required to apply in that<br />
situation. The proposed procedure captures knowledge from experts to create a dictionary of IT competences of<br />
professions which are matched with organizational processes <strong>and</strong> technologies. In order to manage data about<br />
competences, this study designs an ontological framework which acts as a reference with different practical<br />
applications. For instance, in universities, it could be useful in the implementation of study programs to follow a<br />
problem-based learning approach. In firms, it can enable several human resource management activities, as<br />
selection <strong>and</strong> training programs. Additionally, it can be useful for design particular competences sets that define<br />
curricula of human resources. This study aims to show the specification of the competency questions, which is an<br />
acknowledge technique to offer an ontological support to the procedure. The competency questions, formulated<br />
in natural language, with their respective answers, drive the development of the intended ontology, <strong>and</strong> delimit its<br />
scope. Competency questions are the starting point to identify the terminology that will constitute the classes <strong>and</strong><br />
their relationships in the intended ontology. A case study about the identification of IT competences of Industrial<br />
Engineering profession is presented as an example of the proposed procedure. This practical case explains how<br />
the procedure conceptual model supports the rationale behind the competency questions, which are defined in<br />
interviews with experts. Results are discussed in order to address the next steps of the proposed procedure.<br />
Keywords: knowledge management, competency questions, ontology, human resources management, industrial<br />
engineering, professional competences<br />
1. Introduction<br />
There are several studies which analyse the university-firms relation, foc<strong>using</strong> on competence level.<br />
In this context the subjects stressed are the dynamics of the lifelong learning in the human resource<br />
management policies (Bellini 2008), the different types of research <strong>and</strong> development (R&D) strategies<br />
(D’Este <strong>and</strong> Patel 2007), the allocation of professional competences in the work marketplace<br />
(Rodrigues et al. 2005), the problem-based learning approach <strong>and</strong> the curriculum updating in front of<br />
the economical sectors dem<strong>and</strong>s (Lysaght 2000).<br />
This paper aims to develop an ontological support to capture the role of a profession <strong>and</strong> its<br />
competences inside a business process, in front of some organizational triggers like technological<br />
changes <strong>and</strong> product or service innovations, which should mobilize professional capabilities. The<br />
assumption made here is that the competences of a profession –as a sort of knowledge product of<br />
universities– can be better transferred into a job market environment if firms adopt a knowledge<br />
management solution aware of the professional competences they need to increase their intellectual<br />
capital assets (Debackere <strong>and</strong> Veugelers 2005).<br />
Ontology-based systems for competences management have addressed this issue with different<br />
purposes (Paquette 2007, Dexter <strong>and</strong> Davies 2009). However, literature shows few examples in<br />
which the overall system defines the requirements specification for the ontology. Thus, this paper<br />
specifies the requirements of an ontology that supports a procedure for the identification of the<br />
competences of a profession related to a specific area of knowledge –as IT– that is critical for a<br />
business process performance.<br />
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Yadary Ortega-González et al.<br />
The remainder of the paper is organized as follows: next section explains the Industrial Engineering<br />
(IE) case study; section 3 introduces the conceptual model of the adopted procedure <strong>and</strong> the need of<br />
an ontology to support its outcome. The fourth section provides a brief background of what<br />
competency questions technique is in the ontological engineering field. Section 5 presents the<br />
application of the aforesaid technique concerning the IT competences of IE in a business consultancy<br />
process. Finally, a roadmap for the ontology development is discussed in section 6.<br />
2. The IT competences of industrial engineering as case study<br />
IE is the branch of the engineering that deals with the analysis, design, implementation <strong>and</strong> improving<br />
of complex systems integrated by people, materials, information, technology, equipment, financial<br />
resources, <strong>and</strong> energy (Salvendy 2001).<br />
In the last years, IE has been called to deliver new capacities to the information society, mainly<br />
because of its transdisciplinary nature (Sink et al. 2001), its changing role (Mundt 1982) <strong>and</strong> its<br />
potential to achieve an integrated view of IT inside the business processes (Davenport <strong>and</strong> Short<br />
1990, Subramoniam 2008). It can be said that the functions of IE have been moving from<br />
manufacturing to services <strong>and</strong> processes, where the information resource <strong>and</strong> knowledge are the raw<br />
materials (Desouza 2004, Champlin 2006).<br />
However, there is not a consensus about IE practices <strong>and</strong> its required competences yet. The<br />
aforementioned creates confusion <strong>and</strong> has serious consequences for the evaluation, acquisition, <strong>and</strong><br />
application of IE knowledge inside firms, especially in the case of the competences of the profession<br />
regarding information-based processes. Afterwards, there is a lack of a clear underst<strong>and</strong>ing for both,<br />
practitioners <strong>and</strong> managers, of how the IT competences of the profession can attain the processes<br />
goals (Matson et al. 2007, Jackson et al. 2008).<br />
Although scientific works reveal the overall competences of IE (Tirado et al. 2007, Marin-Garcia et al.<br />
2008) <strong>and</strong> others are more oriented toward a particular technology (Balderrama et al. 2008), the<br />
connections established among these works <strong>and</strong> the call for new disciplines –that allow the<br />
profession, in a holistic manner, to create business value-added through IT (Van Rensburg 2006)–<br />
appears hard to establish.<br />
As every engineering discipline, IE needs a model to reach a continuous professional development<br />
(Fink 2001). The procedure presented in this paper considers firms’ technological capacity <strong>and</strong> their<br />
business processes as the contexts where engineering must activate its competences. As a result,<br />
professional competences could be updated <strong>and</strong> linked with technologies along the business process.<br />
Therefore, the need of identifying the IT competences which the IE profession mobilizes inside a<br />
business process is the general problem statement for the conceptualization of the procedure<br />
presented in the next section.<br />
3. The PKO procedure<br />
Foc<strong>using</strong> on the IE case study, this paper introduces a procedure entitled PKO (Ortega <strong>and</strong> Delgado<br />
2011). PKO is an acronym derived from the procedure conceptual model, which combines information<br />
about three variables: the profile of a profession (P), a specific body of knowledge (K) <strong>and</strong> an<br />
organizational process (O) where the referred body of knowledge is critical (see Figure 1).<br />
<strong>Information</strong> about the profession covers its job functions <strong>and</strong> its knowledge (theoretical <strong>and</strong><br />
procedural). Data gathered about the studied process regards its goal, the roles involved in it, as well<br />
as its workflow with its tasks. So far, the body of knowledge is provided in a tabular form, in which<br />
each entry denomination is briefly defined in natural language.<br />
The proposed procedure starts from selecting a relevant process object of analysis, where a<br />
professional should apply his IT competences. The general representation of the process is linked to<br />
the IT that support its deployment <strong>and</strong> with a general professional profile of human resources roles<br />
involved in the process. The combination of these three sets of elements serves to identify the<br />
competences of the professional involved in the analysed process.<br />
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Yadary Ortega-González et al.<br />
Figure 1: The conceptual model of PKO<br />
The procedure execution requires the participation of experts. In order to identify the competences,<br />
the experts have to match the three sources of information (see Figure 2). The scope of the intended<br />
competences is delimited by the business process. That means, professionals are not required to<br />
cover all the competences of the process, but just the intersection of their own group of competences<br />
with a subset of the IT competences required within the process, as shown in Figure 3.<br />
Figure 2: The PKO flowchart<br />
An ontology is an affordable solution to manage the knowledge captured from the experts. It can<br />
serves as knowledge base for the competences within firms or universities.<br />
In this study, ontological engineering is interpreted as “a research methodology which gives us the<br />
rationale of a knowledge base” <strong>and</strong> an ontology is “a system of background knowledge of any<br />
knowledge base […] that explicates the conceptualization of the target world” (Mizoguchi 2003).<br />
The planned ontology can have different applications. In universities, it can be useful to implement<br />
<strong>and</strong> evaluate study programs following a problem-based learning approach. Furthermore, it can<br />
provide alerts of new research scenarios in order to be responsive to business process dem<strong>and</strong>s.<br />
Inside firms, it can support several human resources management activities, as selection <strong>and</strong> training<br />
programs, highlighting the professional role. This last activity can constitute a complex task in the<br />
case of transdisciplinary professions. The ontology can also be important as a way to develop a<br />
communication process between professionals, which has a critical function in teams.<br />
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Yadary Ortega-González et al.<br />
Figure 3: The PKO scope<br />
Next section presents a brief background about the competency questions technique used in the<br />
specification phase of the intended ontology.<br />
4. Background of competency questions in the ontological engineering field<br />
In the field of artificial intelligence, the definition of an ontology is established as a shared agreement<br />
about a conceptual framework for modelling the knowledge of a domain (Gruber 1993). Some<br />
assumptions or statements can be made concerning the ontology domain, motivated by the PKO use<br />
cases outlined in the previous section. Then, the points of view of the ontology users <strong>and</strong> developers,<br />
the statements can be decomposed in a hierarchy of questions from.<br />
The set of the questions that can be answered by the ontology are known as competency questions.<br />
These questions with their respective solutions, formulated in natural language, are critical to provide<br />
rationale to the ontology (Grüninger <strong>and</strong> Fox 1995). Besides, the formulation of the competency<br />
questions dictates the ontology extensibility, granularity <strong>and</strong> scalability, as well as its efficiency <strong>and</strong> its<br />
perspicuity (Kim et al. 1995).<br />
The methodologies for building ontologies agree on the importance of the ontology specification<br />
phase <strong>using</strong> the competency questions, because they can guide the ontology lifecycle, from the<br />
requirements elicitation to the evaluation of the ontology itself (Fox <strong>and</strong> Grüninger 1997, Staab et al.<br />
2001). Defining the competency questions is an important task for the reuse <strong>and</strong> reengineering of<br />
knowledge resources. Moreover, they can serve as a cognitive resource for the selection of ontology<br />
design patterns, having the same positive effects that software patterns have within software<br />
engineering (Gangemi <strong>and</strong> Presutti 2009).<br />
Recently, has emerged the NeOn Methodology that also uses the competency questions technique to<br />
capture knowledge from experts <strong>and</strong> users (Suárez-Figueroa et al. 2009). NeOn Methodology is a<br />
new development paradigm that puts its emphasis in re<strong>using</strong> ontological <strong>and</strong> non-ontological<br />
resources already developed, instead of building ontologies from scratch (Figure 4).<br />
The selection of NeOn is based on the following arguments:<br />
The methodology covers the state of the art of ontology development. In order to sustain that, it<br />
has identified nine scenarios <strong>and</strong> enhances the guidelines to combine them in lifecycle models –<br />
created ad hoc for each project–, depending on the available knowledge resources. The scenario<br />
1 is conceived for building ontology networks from scratch, without re<strong>using</strong> existing resources.<br />
The second scenario is conceived for building ontologies by re<strong>using</strong> <strong>and</strong> reengineering nonontological<br />
resources, like taxonomies <strong>and</strong> glossaries. in scenarios from 3 to 6 the aim is re<strong>using</strong>,<br />
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Yadary Ortega-González et al.<br />
merging <strong>and</strong>/or reengineering of ontologies or ontology modules. In the seventh one, the<br />
ontology is built by re<strong>using</strong> ontology design patterns. Scenarios 8 <strong>and</strong> 9 focus on restructuring<br />
<strong>and</strong> localizing ontologies, respectively.<br />
Along with the methodology, the NeOn toolkit has been developed. It supports the methodology<br />
activities.<br />
Finally, the prescriptive tasks to carry out the ontology requirements specification are improved in<br />
this approach, compared with other methodologies.<br />
Figure 4: The nine scenarios in the NeOn Methodology. Source: Gómez-Pérez <strong>and</strong> Suárez-Figueroa<br />
(2009)<br />
Although the goal of this paper is to show the first steps in the specification phase –carried out in the<br />
scenario 1–, in section 6 is explained the lifecycle planned for the PKO ontology.<br />
5. Ontological support for the IT competences of IE<br />
This section aims to obtain the set of the competency questions <strong>and</strong> their respective answers to<br />
support the PKO ontology, derived from the need of formalizing the IT competences of IE inside a<br />
business consultancy process, which takes place into a software company. This business consultancy<br />
process is executed each time a business client of the software company requires to buy one of the<br />
systems offered in its product portfolio.<br />
In this execution of PKO, seven experts belonging to two Cuban software firms <strong>and</strong> to the Cuban<br />
National Commission of IE were involved. Data concerning their expertises <strong>and</strong> provenances is<br />
shown in Figure 5.<br />
As it is suggested in NeOn Methodology, the first steps are the definition of the intended users <strong>and</strong><br />
uses of the PKO ontology. Tables 1 <strong>and</strong> 2 show the planned users <strong>and</strong> uses defined for the PKO<br />
ontology during the first iteration of its lifecycle.<br />
Then, the competency questions technique is applied. In order to adopt this technique a bottom-up<br />
approach is followed according to the conceptual model in Figure 1. The answers of the competency<br />
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Yadary Ortega-González et al.<br />
questions were provided by the experts. Table 3 shows an excerpt of the approved competency<br />
questions with their respective answers for the IE case study.<br />
Figure 5: Qualifications of the experts involved in the case study<br />
Table 1: Intended users of the PKO ontology<br />
User Description<br />
User 1<br />
Business analyst who needs to increase the intellectual capital of the firm by acquiring the<br />
competences of a profession.<br />
User 2 Professional committee board which wants to identify new scenarios for the profession execution.<br />
User 3<br />
Human agents in the academic environment that want to (re)design a discipline curriculum or<br />
identify a new role of the profession.<br />
User 4<br />
Human agents in the firm environment in charge of training, evaluation <strong>and</strong> others competence<br />
management activities.<br />
Table 2: Intended uses of the PKO ontology<br />
Use Description<br />
1 To manage the competences of the professionals within a business process in front of technological<br />
changes.<br />
2 To identify <strong>and</strong> manage a set of competences related to a new commission assigned to a profession<br />
3 To provide a learning path related to the profession inside an organizational process<br />
4 To implement a case study following a problem-based learning approach<br />
Table 3: The ontology requirements in form of competency questions<br />
Competency questions Answers<br />
Related to the profession<br />
What is the profession<br />
Industrial Engineering<br />
name?<br />
What are the Method Engineering, Business process management, Human factor engineering<br />
skills/knowledge of the<br />
profession?<br />
What are the<br />
Analysis/design/improvement of business process<br />
profession job<br />
functions?<br />
What are the<br />
<strong>Knowledge</strong> manager/business analyst<br />
profession roles?<br />
Related to the body of knowledge (BoK)<br />
What is the overall<br />
<strong>Information</strong> Technology<br />
name of the BoK?<br />
What are the names of<br />
BPM toolkit, ITIL, SAP/R3, enterprise architecture framework<br />
the BoK entries?<br />
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Yadary Ortega-González et al.<br />
Competency questions Answers<br />
Related to the organizational process<br />
What is the process<br />
Business consultancy for installing/selling (parameterize) an ERP<br />
name?<br />
What is the process<br />
Software firm<br />
owner?<br />
What are the process To analyse (feasibility study) if the information system can be installed in the<br />
goals?<br />
client’s business<br />
To establish an integral project for the ERP installation with a process-oriented<br />
approach<br />
What are the process<br />
Risks analysis, enterprise architecture modelling, business analysis<br />
activities?<br />
Related to the combination of profession <strong>and</strong> the organizational process with the BoK entries<br />
What are the required <strong>Management</strong> of the changes due to the introduction of an information system within<br />
competences that the<br />
the firm.<br />
profession should Ability to coordinate the communication among several stakeholders related to the<br />
mobilized inside the<br />
business process<br />
process?<br />
6. A roadmap in the PKO ontology development<br />
Next steps in the development of the PKO ontology can be managed considering 3 iterations in the<br />
ontology lifecycle, under the assumption that is not fully known a-priori the ontology requirements.<br />
The initial iteration will cover the first scenario, from specification to implementation. It is important to<br />
note that there is a wealth of knowledge on which a consensus is needed. That suggests the reuse<br />
<strong>and</strong> reengineering of knowledge resources already agreed. For example, the classification schema of<br />
the Association for Computing Machinery (ACM) could be a starting point for capturing the IT body of<br />
knowledge. The same kind of research will be performed related to the data of the profession. For the<br />
last iteration (scenarios 4, 5, 6) is planned the use, merge <strong>and</strong> modification of some potentially<br />
resources, like already modelled business processes.<br />
For the achievement of the planned schedule, the set of plug-ins of the NeOn toolkit environment<br />
should be explored. These are the cases, for example, of Cicero <strong>and</strong> Watson tools.<br />
Watson is a semantic search engine developed at the <strong>Knowledge</strong> Media Institute of The Open<br />
University (Sabou et al. 2007). It allows the search of the terms got from the competency questions.<br />
As a result, the retrieved elements can be imported (classes, relations, instances) if they match with<br />
the competency of the PKO ontology.<br />
Cicero was developed in the context of the NeOn project as an extension of the Semantic MediaWiki<br />
<strong>and</strong> it is based on issue-based information systems functionalities (Bechhofer et al. 2008). It facilitates<br />
an asynchronous discussion <strong>and</strong> decision taking process between domain experts <strong>and</strong> ontology<br />
developers. In this case, the Cicero argumentation model could be explored, as a better way to<br />
integrate the rationale behind the competency questions with the ontology development <strong>and</strong><br />
documentation.<br />
The use of Cicero can enable to answer more complex competency questions, like the following:<br />
Given the information of a business process <strong>and</strong> its IT infrastructure, what professions seem to be<br />
more appropriated to perform its roles <strong>and</strong> execute its tasks?<br />
Which competences required by the business process are still not considered as learning<br />
outcomes in the academy curriculum program?<br />
7. Conclusions<br />
This paper revealed the PKO procedure as a step towards the integration of professional<br />
competences into the enterprise architecture blueprint, instead of the traditional view of a profession<br />
built on a curriculum foundation. In fact, the PKO development is motivated by the need to allow<br />
professionals to learn <strong>and</strong> adapt to technological changes occurring in organizations. Such changes<br />
give rise to new bodies of knowledge <strong>and</strong> emergent professional competences. In the achievement of<br />
this effort, many questions arise <strong>and</strong> need an ontological support.<br />
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Yadary Ortega-González et al.<br />
Hence, with the intention of privileging the conceptualization of the PKO ontology specification, the<br />
procedure conceptual model <strong>and</strong> its main steps were exposed, as a mean to provide a rationale<br />
behind the competency questions of the ontology that will support the procedure outcome. In addition,<br />
it was shown how the procedure scope delimits the level of granularity of the competency questions<br />
that the ontology should be able to answer.<br />
The case study implementation pointed out some issues. The first one is that further research must<br />
be conducted concerning the adoption of mechanisms for the modularisation of sub-domains that are<br />
invariant when PKO is put into practice. Those are the cases of the profession’s principles <strong>and</strong> its key<br />
areas. Additionally, the answers provided by the experts during the case study execution affirm the<br />
adoption of ontology networks. We have to notice that such answers are, themselves, subsets of<br />
knowledge (e.g. ITIL, BPM) that can be reused, speeding up the process of building upon a<br />
consensus.<br />
Consequently, it is important to remark that the application of the NeOn Methodology <strong>and</strong> its toolkit<br />
will have much more attention in the next steps of the PKO ontology development.<br />
Acknowledgements<br />
This research was partially funded by the European Commission, through an Erasmus Mundus<br />
External Cooperation Window (EMECW Lot 19bis) grant. The authors also thank the Department of<br />
<strong>Management</strong> at the University of Bologna <strong>and</strong> the Faculty of Industrial Engineering at CUJAE for<br />
fostering the interdisciplinary nature of the subject of this paper.<br />
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Sabou, M., Dzbor, M., Baldassarre, C., Angeletou, S. <strong>and</strong> Motta, E. (2007) "WATSON: A Gateway for the<br />
Semantic Web". Paper read the 4 th European Semantic Web Conference, ESWC. Innsbruck, Austria, June.<br />
Salvendy, G. (Ed.) (2001) H<strong>and</strong>book of Industrial Engineering. Technology <strong>and</strong> Operations <strong>Management</strong>, Wiley-<br />
Interscience.<br />
Sink, D. S., Poirier, D. F. <strong>and</strong> Smith, G. L. (2001) Industrial <strong>and</strong> Systems Engineering in organizations. IN<br />
SALVENDY, G. (Ed.) H<strong>and</strong>book of Industrial Engineering. Technology <strong>and</strong> Operations <strong>Management</strong>. Third<br />
ed. Purdue, Wiley-Interscience.<br />
Staab, S., Studer, R., Schnurr, H.-P. <strong>and</strong> Sure, Y. (2001) "<strong>Knowledge</strong> Processes <strong>and</strong> Ontologies". IEEE<br />
Intelligent Systems, Vol 16, No. 1, pp 26-34.<br />
Suárez-Figueroa, M., Gómez-Pérez, A. <strong>and</strong> Villazón-Terrazas, B. (2009) How to write <strong>and</strong> use the ontology<br />
requirements specification document. IN MEERSMAN, R., DILLON, T. & HERRERO, P. (Eds.) Proceedings<br />
of the Confederated International Conferences, CoopIS, DOA, IS, <strong>and</strong> ODBASE 2009 on On the Move to<br />
Meaningful Internet Systems: Part II. Vilamoura, Portugal, Springer-Verlag.<br />
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Industrial Engineer, Vol October, 2008, pp 44-48.<br />
Tirado, L. J., Estrada, J., Ortiz, R., Solano, H., González, J., Alfonso, D., Restrepo, G., Delgado, J. F. <strong>and</strong> Ortiz,<br />
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http://hdl.h<strong>and</strong>le.net/2263/4790<br />
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The Balanced Scorecard <strong>and</strong> its Practical Applications in<br />
Oracle Balanced Scorecard<br />
Michal Pivnička<br />
Tomas Bata University in Zlin, Czech Republic<br />
pivnicka@fame.utb.cz<br />
Abstract: In today’s rapidly changing world, strategy management is a vital element of management. In<br />
connection with this, there exists a necessity to translate strategy into definite goals <strong>and</strong> steps. This facilitates<br />
communication of corporate strategy to staff at a company, <strong>and</strong> execution is simpler for an employee of the firm.<br />
Furthermore, it is imperative to maintain feedback on information about the state of performance objectives. The<br />
methodology of the Balanced Scorecard proves most appropriate for this task. Implementing the Balanced<br />
Scorecard, however, cannot be successful without the support of a high-quality business information system as,<br />
especially within a larger business, this concept will not function if not working with large amounts of data <strong>and</strong><br />
information. This paper deals with applying Balanced Scorecard methodology in business information systems,<br />
foc<strong>using</strong> on practical applications in Oracle Balanced Scorecard. Beginning with a brief overview of current<br />
knowledge about the Balanced Scorecard, it includes a discourse on the essential logic of this methodology <strong>and</strong><br />
a presentation of its individual components. Attention is also paid to the role of the Balanced Scorecard in<br />
strategic management. Following this, focus switches to the support of the Balanced Scorecard in information<br />
systems. In this section of the paper, concentration is placed on Business Intelligence <strong>and</strong> Corporate<br />
Performance <strong>Management</strong> <strong>and</strong> their relation to the above-mentioned methodology. In the main body of this<br />
study, practical solutions are addressed that support this methodology within the information system of Oracle.<br />
This part is divided into two chapters. First, a solution is dealt with from the perspective of Viewers (end users).<br />
The major benefits for employees of the company are highlighted, as is the influence on the effectiveness of their<br />
work. The other portion is devoted to the duties of designers – people transposing the Balanced Scorecard into<br />
an information system. Therefore, it constitutes a way of setting up <strong>and</strong> customizing the Balanced Scorecard<br />
within an information system. Finally, this paper summarizes the main benefits of integrating the Balanced<br />
Scorecard <strong>and</strong> an information system, such as aligning corporate goals with those of employees, improved<br />
communication <strong>and</strong> better feedback.<br />
Keywords: balanced scorecard, information system, corporate performance management<br />
1. Introduction<br />
For successful management <strong>and</strong> to achieve the objectives for which the same was established, it is<br />
essential that a company possesses a clear shared vision <strong>and</strong> strategy, <strong>and</strong> is consistently assiduous<br />
as regards implementing it. A high level of performance with a strategy can be greatly facilitated if a<br />
suitable tool is used for translating said strategy into operational terms. The Balanced Scorecard<br />
(BSC) seems like the most suitable tool for this purpose. Due to the fact that the BSC works with high<br />
volumes of data (information) that must be current <strong>and</strong> used by everyone in an organization, it is<br />
appropriate if the BSC is supported by a superior information system allowing the BSC to manage<br />
operations. Since the author is well aware of the growing importance of promoting strategic<br />
management with information systems, he has begun to devote itself to this issue. The aim of this<br />
article is to provide basic information about the Balanced Scorecard <strong>and</strong> how this tool is supported in<br />
the Oracle Balanced Scorecard application. Output will be further applied in teaching at the Tomas<br />
Bata University in Zlin, in the Czech Republic.<br />
The thesis begins by briefly introducing strategic management <strong>and</strong> the Balanced Scorecard – its logic<br />
<strong>and</strong> role in strategic management. Afterwards, the Oracle Balanced Scorecard application is<br />
described for Viewers (who use Oracle BSC in their daily jobs), Designers (who design the Balanced<br />
Scorecard) <strong>and</strong> Administrators (who ensure that the application operates without problems).<br />
2. Strategic management <strong>and</strong> the balanced scorecard<br />
Any company that wants to exist for considerable period must apply the process of creating a<br />
strategy. This usually starts with devising the business’ mission <strong>and</strong> clarifying values that the<br />
company both recognizes <strong>and</strong> intends to follow. The following is a formulation of the vision <strong>and</strong><br />
strategy of a company at this point in time. It is necessary to conduct various analyses, on the internal<br />
<strong>and</strong> external environments of a company, before such a strategy may be compiled. In the external<br />
environment, the market position in relation to other players in the same marketplace is taken into<br />
account. As for the internal environment, endeavor is placed on finding core competencies. According<br />
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to (Collis 2008), this translates into something one can do best <strong>and</strong> that creates value for a target<br />
group of customers. However, these elements are mostly intangible.<br />
After formulating a strategy, it is necessary to optimize it for the operating conditions in place. This<br />
proves essential to successful implementation of the strategy because, with an increase in the<br />
responsibilities <strong>and</strong> autonomy of employees, there is a rise in the importance of knowledge relating to<br />
the business strategy. The implication is that the strategy must be described well <strong>and</strong> measures set<br />
for the relevant strategic objectives. Once complete, operating measures may be established for<br />
which front-line employees are responsible. For this purpose, the Balanced Scorecard (BSC) is the<br />
best option. The BSC consists of a number of interrelated measures <strong>and</strong> value drivers that produce<br />
information on both company performance <strong>and</strong>, as is implicated, the future performance of the<br />
company. Each measure is, of course, relevant to a specific target.<br />
The overarching objective of any enterprise (excluding non-profit organizations <strong>and</strong> the public sector)<br />
is financial performance, i.e. how the company evaluates capital. The disadvantages of concentrating<br />
solely on financial success are a loss of focus on clients - the source of profit for the firm, <strong>and</strong> a<br />
tendency to think in the short-term (improving current financial performance at the expense of the<br />
future), as well as not investing in future business. That is precisely why the BSC reflects not only<br />
measures of financial performance, but also those of other areas of the company’s performance,<br />
which are referred to by the authors of Balanced Scorecard as perspectives.<br />
Financial Perspective is maintained <strong>and</strong> the measures contained therein monitor financial<br />
performance (for example, profit, EVA, ROCE, ROI), which covers the entire gamut of activities of a<br />
company. Customer Perspective contains measures reflecting objectives relating to clients, such as<br />
customer satisfaction, market share, customer loyalty, etc. The performance of the processes leading<br />
to satisfying customer needs forms part of the Internal Perspective. This may contain an innovation<br />
process (for example, the timing of launching a new product on the market), an operation process <strong>and</strong><br />
the after-sales service process. The cornerstone of success of any company is placed in the final<br />
perspective, known as the Learning <strong>and</strong> Growth Perspective. It is the skills of the workforce that are<br />
the basic limiting factor of a company’s performance. Consequently, this is the main reason for<br />
investing in the development <strong>and</strong> skills of individuals, to have a superior information system providing<br />
quality <strong>and</strong> timely information, <strong>and</strong> to create a business culture that will motivate staff.<br />
Measures contained in the perspectives are not r<strong>and</strong>omly chosen but selected on the basis of a<br />
cause-<strong>and</strong>-effect relationship, <strong>and</strong> thereby create a complex in which lower perspective measures<br />
influence higher perspective ones.<br />
The BSC creation process involves:<br />
Clarifying financial goals <strong>and</strong> determining measures for the same;<br />
Performing market segmentation, fixing goals for chosen segments <strong>and</strong> setting measures for<br />
these goals;<br />
Identifying processes that will lead to fulfilling requirements in selected segments <strong>and</strong> determining<br />
their measures;<br />
Identifying the skills necessary – those of employees, information system capabilities,<br />
organizational capital <strong>and</strong> setting measures for them.<br />
If a company decides to first identify their core competencies, capabilities <strong>and</strong> the identification<br />
process, then this step will be preceded by segmenting <strong>and</strong> selecting target segments.<br />
Measures provide the feedback that is a necessary part of such management. In addition to<br />
information on the status of meeting the goals, the BSC also provides information on whether the<br />
assumptions that the corporate BSC holds are valid. For example, if the business meets all its<br />
objectives for customer satisfaction, while in reality the latter does not improve, it is apparent that<br />
some of the assumptions are incorrect.<br />
A term closely connected with the BSC is Strategy Map. Although the BSC exhibits a casual<br />
relationship amongst the measures used, the Strategy Map shows the objectives of perspectives <strong>and</strong><br />
relationships between them. In the hierarchy displayed above (fig. 1) the same is ranked between<br />
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strategy <strong>and</strong> the BSC because the Strategy Map presents causal relationships between objectives,<br />
from which measures can be derived.<br />
Figure 1: The balanced scorecard <strong>and</strong> its role in strategic management (Kaplan 2004)<br />
3. Oracle balanced scorecard<br />
It is clear that the implementation of the BSC in a business is no simple matter. Especially in relation<br />
to large companies, proper use of the BSC as a strategic tool cannot proceed without the support of a<br />
good quality information system. Without this, it is almost impossible that all information would be<br />
received on time, placed in the right h<strong>and</strong>s, <strong>and</strong> in the correct form. The practical application of the<br />
Balanced Scorecard in Oracle is examined in the rest of this article.<br />
Oracle Balanced Scorecard enables support for the methodology of the Balanced Scorecard. It may<br />
also be used to support, for example, the EFQM or EVA. However, particular attention shall only be<br />
paid to supporting the BSC.<br />
Three types of users possessing different roles can utilize this application:<br />
Viewers: people <strong>using</strong> the system for monitoring performance objectives, for the achievement of<br />
which they are responsible.<br />
Designers: users in charge of designing scorecards, views, KPIs <strong>and</strong> targets for the system. They<br />
define default settings <strong>and</strong> reports.<br />
Administrators: people caring for installation, implementation <strong>and</strong> maintenance of the application.<br />
They set up the application <strong>and</strong> maintain the data structure. Moreover, they are also responsible<br />
for security of the application.<br />
3.1 Viewers<br />
Viewers of this system are people responsible for fulfilling the objectives derived from the strategy, i.e.<br />
objectives that they are responsible for or for which they possess decision-making power. A specific<br />
ID is assigned to each user. Based on this, the application displays for users merely the information,<br />
<strong>and</strong> only in such a way, that they need. Usually, therefore, the objectives owned by Users are<br />
displayed.<br />
3.1.1 Navigating scorecards<br />
After logging into the system, a Viewer will see a list pertaining to the Scorecard (fig. 2) available to<br />
the User that is logged-on. This list is for quick orientation <strong>and</strong> access to an individual Scorecard. It<br />
displays the Scorecard’s name, its owner <strong>and</strong> any additional information relating to these. Viewers<br />
can also look at details of each Scorecard. The hierarchical structure of a Scorecard shows the logical<br />
relationship between the Scorecards, not the data in the same. The application also allows a search<br />
in terms of a Scorecard name or owner. From this list, it is possible to double-click on a Scorecard’s<br />
name to access one of them.<br />
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Figure 2: List of scorecards window<br />
3.1.2 Scorecards<br />
Michal Pivnička<br />
A Scorecard is a set of interrelated objectives. Each objective in the Scorecard must be part of an<br />
Objective Group. Such an Objective Group links together objectives relating to the same subject. An<br />
objective includes KPIs <strong>and</strong> Dimensions (a way of looking at data) relating to them. The number of<br />
Scorecards is not limited in the application. A Scorecard can be browsed via several different views;<br />
indeed, a Scorecard view, a Tree view, <strong>and</strong> a Detailed view are automatically generated by the<br />
system. They form part of the application’s logic. Custom views are directly aligned with a particular<br />
Viewer. Furthermore, the number of views is not limited. It is often used for a Strategy Map or<br />
thematically-oriented Scorecard.<br />
The Scorecard view (fig. 3) allows the viewing of objectives by each Objective Group. Next to each<br />
objective, an alarm shows the progress in meeting this objective.<br />
Figure 3: Scorecard view<br />
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A Tree view (fig. 4) presents the hierarchy of Objective Groups <strong>and</strong> objectives. The important<br />
information that it shows is the default KPI. Each objective can contain a huge number of KPIs. The<br />
default KPI is the one that triggers alarms, revealing how targets are able to be met. Their status is<br />
listed in the Status column.<br />
Figure 4: Tree view<br />
A Detailed view (fig. 5) provides a list of objectives <strong>and</strong> their Objective Groups. This view also shows<br />
the actual results, anticipated results, <strong>and</strong> the percentage of deviation from the plan for each<br />
objective.<br />
Figure 5: Detailed view<br />
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A Custom view (fig. 6) allows a Designer to set the look that precisely gives a current Viewer the most<br />
benefit. Based on a graphical background, this enables one to view one’s objectives as part of an<br />
existing corporate graphic. On this graphical background, links can be added to web sites <strong>and</strong> other<br />
program hotspots to monitor objectives. It allows for insertion, for example, of a Strategy Map.<br />
Figure 6: Strategy map (custom view)<br />
3.1.3 Monitoring activities<br />
Any user responsible for achieving such objectives must be allowed to monitor them, or when viewed<br />
from a different perspective, be able to compare them, etc. Oracle Balanced Scorecard allows the<br />
user to view any objective on its monitor that is authorized. <strong>Information</strong> on them is displayed under<br />
five tabs: performance, cause <strong>and</strong> effect, assessment, information <strong>and</strong> collaboration.<br />
Performance Tab<br />
A Performance Tab shows a company’s performance in graph <strong>and</strong> table form. Data on activities can<br />
be displayed in a number of ways. Each KPI contains its own dimensions, calculations, comparative<br />
values <strong>and</strong> displayed time setting. Therefore, the application is a powerful tool for analyzing KPIs.<br />
From this perspective, one very useful feature seems to be the opportunity to look at KPIs from<br />
different dimensions. This allows data to be viewed at various levels of aggregation, <strong>and</strong> results may<br />
be compared between separate dimension objects (see figure 7). For example, a geography<br />
dimension can contain dimension objects such as a continent, region, state, district, city, etc. It is<br />
possible to display sales for one city <strong>and</strong> then compare them to sales for others. The time dimension<br />
can be set to different periods of time (days, weeks, months, quarters, years) but it must be taken into<br />
account that the chart shows only 12 consecutive periods.<br />
Comparing actual performance to other data, such as a budget, plan, the previous year, competition,<br />
etc., is also achievable. This application additionally permits forecasts for the future (the lighter<br />
columns).<br />
Outputs are, in Oracle Balanced Scorecard, displayed via graphs <strong>and</strong> tables. The application offers<br />
four types of graphs: single bar, multiple bar, simulation tree, <strong>and</strong> profit <strong>and</strong> loss.<br />
The table is displayed below the graph. For the maximum of twelve periods, the items shown are<br />
time, actual outcome <strong>and</strong> comparative values. One may then click on a value in the table to view the<br />
comparison graph.<br />
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Figure 7: Objective in oracle balanced scorecard<br />
Michal Pivnička<br />
Graphs are also used to compare values according to the dimension.<br />
Figure 8: Comparison of product lines<br />
Oracle Balanced Scorecard also enables charts <strong>and</strong> tables to be printed or exported to Excel, where<br />
further work can take place. It is also possible to create links to various documents, websites,<br />
presentations or other applications.<br />
Other tabs<br />
The task of other tabs is to display additional information on the objectives monitored. The Cause<strong>and</strong>-Effect<br />
tab gives data on objectives affecting the performance of a firm’s declared objectives <strong>and</strong>,<br />
vice versa, objectives that are affected by its objective. An information tab can provide a more<br />
thorough description of the objective. This permits greater specificity on how it contributes to the<br />
objectives of the corporate strategy in one respect, <strong>and</strong> in another it provides further important<br />
information on the objective for the person that is responsible for it. Such data may be, for example, a<br />
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necessary calculation <strong>and</strong> its interpretation, a more detailed breakdown of activities to be carried out,<br />
setting an alarm, etc. It is also possible to add links to important information. An Assessment tab is<br />
used to supplement qualitative information. The Collaboration tab allows for superior utilization of<br />
human capital, because different users can access <strong>and</strong> contribute high quality information to help in<br />
problem solving. This means that important activities for objective attainment can become more<br />
efficient. In addition, recommendations may include feedback.<br />
3.1.4 Alarms<br />
Alarms indicate the status of the default KPI for an objective, not for all KPIs in the objective.<br />
(Chhabra 2005) Such Alarms display whether the actual data are acceptable, marginal or at an<br />
unacceptable level. Their spacing can be adjusted according to the needs of the company. Any<br />
missing data are marked in gray. Actual results are compared with the plan, budget or forecast data.<br />
By clicking on an alarm, one can bring up detailed picture objectives <strong>and</strong> KPIs.<br />
3.2 The design process for oracle balanced scorecard<br />
The most important, <strong>and</strong> probably the most difficult, step is to devise the Balanced Scorecard. This<br />
implies a thorough underst<strong>and</strong>ing of the vision <strong>and</strong> corporate strategy, <strong>and</strong> expression of strategy by<br />
<strong>using</strong> the Strategy Map. Strategy is expressed as a set of objectives with cause-<strong>and</strong>-effect linkages<br />
between them. Prior to entering Scorecards onto the system, clarity must exist pertaining to all<br />
Objective Groups, objectives, measures <strong>and</strong> dimensions. There should be a Strategy Map <strong>and</strong> a list<br />
of all the things mentioned above. The subsequent insertion of a Scorecard into Oracle Balanced<br />
Scorecard is actually a very simple task for an experienced user. Scorecards <strong>and</strong> their components<br />
can be entered onto a system by every user that has been assigned the role of Designer. They create<br />
all the elements required to build a Scorecard, which is why they must have a very good knowledge of<br />
the strategy <strong>and</strong> BSC. Ideally, they ought to be present at their creation.<br />
A Designer must know the requirements of Viewers. Any Viewer who uses an information system<br />
desires clearly displayed information relevant to their work (their objectives to achieve). A Designer<br />
has to shape <strong>and</strong> make available a presentation of data that Viewers require <strong>and</strong> in the form they<br />
need it. The application provides feedback <strong>and</strong> an overview of current progress in their daily activities.<br />
Viewers’ requirements are important when it comes to designing custom views. Should the Designer<br />
also be the Viewer, naturally everything is easier. However, if the Designer produces Scorecards for<br />
other Viewers, good communication is necessary between both parties for the latter to accurately<br />
convey their needs. This requires all individuals to uniformly interpret the actualities in existence. The<br />
Scorecard should not contain information unnecessary for the Viewer, thereby eliminating any<br />
confusion over information. The Viewer merely focuses attention on critical data <strong>and</strong> information.<br />
Each Scorecard is composed of at least one Objective Group that contains thematically similar<br />
objectives. Furthermore, each objective must contain at least one KPI <strong>and</strong> differing dimensions (see<br />
figure 9).<br />
Figure 9: Structure of a scorecard<br />
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From this structure one is able to gain an insight into the process of creating a Scorecard, which<br />
proceeds from simple to more complex elements of the Scorecard.<br />
The process of Scorecard creation consists of the following steps:<br />
Creating KPIs <strong>and</strong> dimensions relating to them<br />
Creating Objective Groups <strong>and</strong> objectives<br />
Creating a Scorecard <strong>and</strong> views<br />
Figure 10: The process of creating scorecard<br />
3.2.1 Creating KPIs<br />
As shown in figure 10, the process begins with the creation of KPIs <strong>and</strong> dimensions that are bound to<br />
the KPI. The KPI is a basic unit used to measure performance <strong>and</strong> evaluate progress in a Scorecard.<br />
(Chhabra 2005) When creating a KPI, one can use either predefined KPIs via Oracle Daily Business<br />
Intelligence, or create new KPIs. The name of a KPI can be discretionary, but the system<br />
automatically assigns an internal name to each new KPI. It is a unique KPI denotation <strong>and</strong> serves as<br />
a means of identification when creating two or more KPIs with the same display name. It is also<br />
possible to enter a more detailed description.<br />
The system also permits the characteristics of KPIs to be specified (fig. 11), i.e. whether it is<br />
cumulative value (such as revenue, cost, sales) or a state that represents a snapshot at a point in<br />
time (for example, stocks, property status, orders, etc.). Then the method of aggregation is set (the<br />
average, maximum value, minimum value, sum), as is the method used to estimate future values of<br />
KPIs (the moving average, plan-based, 3-month average performance, custom or no forecast), in<br />
addition to setting properties with automatically generated values for the prototype mode, the numeric<br />
format for the axis, labeling the y-axis (x-axis is always time) <strong>and</strong> calculation methods.<br />
The calculation method allows one to view data variously, for example, as a percentage, variation,<br />
cumulative Year-to-date figure, growth, or contribution, etc.<br />
Figure 11: KPI settings<br />
Since KPIs can be formed by combining the results of the source column in the database or the value<br />
derived from existing KPIs, it is possible to create a formula in the formula editor (fig. 12) that<br />
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combines two or more KPIs (For Example: Revenue per employee KPI = Total Sales KPI/Number of<br />
employee KPI).<br />
Figure 12: Formula editor<br />
The source of data for each KPI is a column of the table in the database. St<strong>and</strong>ardly it is created for<br />
each KPI source column.<br />
3.2.2 Dimension creation<br />
Each KPI is linked with one or more dimensions. A dimension represents the perspective of how data<br />
can be viewed. Examples of dimensions could take the form of geography, product line, customers,<br />
etc. A dimension is composed of individual dimension objects, with dimensions <strong>and</strong> dimension objects<br />
performing the role of a filter.<br />
The Designer must determine <strong>and</strong> set the dimensions <strong>and</strong> dimension objects that are necessary for<br />
creating the KPIs. It is also important to underst<strong>and</strong> the “parental” relationships between dimension<br />
objects. It is better to have fewer dimension objects as this takes less space up within the database.<br />
Logically, this is why having a lot of information on the database results in increased response time. It<br />
is wiser to design a database for the aggregate data that is of most value to senior management.<br />
If the company in question implements the Daily Business Intelligence application, it is possible to use<br />
dimensions that contain this application.<br />
3.2.3 Development objectives <strong>and</strong> objective groups<br />
From the perspective of the Designer, an objective is a set of KPIs <strong>and</strong> their dimensions. As soon as<br />
all the KPIs are loaded onto the system, it is possible begin entering the objectives. All the objectives<br />
must be part of an Objective Group that clusters together thematically similar objectives.<br />
Consequently, the first step is to create an Objective Group. This is comparatively straight-forward<br />
because the Designer simply enters a name <strong>and</strong> a description.<br />
Then they proceed to the creation of individual objectives. This means making a new objective,<br />
entering its name <strong>and</strong> then assigning KPIs <strong>and</strong> dimensions that must be included. Before allotting<br />
KPIs, the Designer must know for sure which KPI is the most important. This KPI is then designated<br />
as the first one <strong>and</strong> becomes the default KPI. This default KPI triggers alarms – meaning that it<br />
reflects the performance of an objective. Then the Designer can assign other KPIs. If a change in the<br />
default KPI is necessary, it can be changed at any time.<br />
One of the most important aspects is alarm settings. An alarm is, as mentioned above, the status of<br />
the default KPI in relation to an objective that indicates the condition of fulfilling an objective. The<br />
alarms are a reflection of how one manages to meet the default KPI in relation to a default dimension.<br />
When creating objectives, thresholds must be set for the default KPI, <strong>and</strong> this reports when<br />
performance is satisfactory, tolerable <strong>and</strong> intolerable (a problem, take corrective action). It is also<br />
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important to set whether the objective target exceeded the plan, fell below expectations of the plan or<br />
was within tolerances (fig. 13).<br />
Figure 13: Alarm settings<br />
3.2.4 Creating custom scorecard views<br />
A Scorecard can be created as soon as objectives exist. Creating a Scorecard actually means that it<br />
will be made <strong>and</strong> given any name, <strong>and</strong> then objectives shall be assigned to it that must be included.<br />
The number of objectives in the Scorecard is not limited, just as there is no limit to the number of<br />
Scorecards which may exist. It is also possible to create a Scorecard in a hierarchy (parent – child).<br />
The strategy of the company can then be cascaded down to individuals.<br />
Creating views is the last point in the process of creating a Scorecard. As described above, the<br />
system automatically creates a Tree view, Scorecard view <strong>and</strong> Detailed view. The Designer, however,<br />
has the ability to devise an unlimited number of Custom views. These are tailored exactly to a specific<br />
Viewer. A typical example of the use of a custom view is the insertion of a Strategy Map.<br />
The basis of the custom view is a picture in GIF, JPG, JPEG, SVG or SOW with a maximum size of 1<br />
MB. It serves as a background for entering indicators (alarms), links to websites or other applications,<br />
labels, etc.<br />
Once a Scorecard has been built, the Designer can allot it to the intended Viewer.<br />
4. Some of the problems associated with the implementation of oracle<br />
balanced scorecard<br />
With each solution are some related issues that must be taken into account. Probably the most<br />
important problems that may arise during the implementation of Oracle BSC are:<br />
Inconsistent communication,<br />
Rejection of changes,<br />
Lack of management support.<br />
The main point of the process of the BSC implementation in the information system is communication.<br />
It requires that all participants know <strong>and</strong> underst<strong>and</strong> the business strategy. In particular, a designer<br />
should underst<strong>and</strong> the strategy very well. Customization is also very difficult to communicate. The<br />
user must be able to explain the designer how the application needs to be set. Sometimes a problem<br />
may arise because the user himself is not sure what it needs.<br />
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Michal Pivnička<br />
When any information system is implemented, the peope play the most important role. Without them,<br />
every attempt to implementation of information system fails. <strong>Management</strong> should not underestimate<br />
the communication with people. <strong>Management</strong> muse persuade employee that the implementation of<br />
information system (in this case Oracle Balanced Scorecard) is good for them (see chapter five). This<br />
should prevent the reluctance to use the system.<br />
Support of management is also very important to any change. Without this support any major change<br />
cannot be done.<br />
5. Main benefits for a company<br />
Using the benefits from implementing the BSC in itself has great advantages. It is mainly to clarify the<br />
business strategy across the company, alignment <strong>and</strong> communication objectives, providing feedback<br />
to individual employees at all levels of corporate hierarchy. Use corporate information system to<br />
support BSC brings more benefits, because it serves as a means empowering impact of corporate<br />
BSC. Specific benefits can be:<br />
Corporate strategy can be visible across entire company,<br />
Outputs can be used by all employees,<br />
People can monitor objectives,<br />
People can better work together to solve problems,<br />
Collaborative learning is encouraged,<br />
Objectives can be cascaded at the level of individual worker,<br />
Feedback to employees is provided,<br />
Scorecards <strong>and</strong> relations among them are well-arranged,<br />
The possibility of customization to individual users,<br />
The role of employees in the company is clarified (a man can see how contributes to the vision<br />
fulfilling),<br />
The objective can be seen from many different perspectives (KPIs, dimensions),<br />
The possibility of more detailed characterization of objectives,<br />
Leadership is easier because manager can see problems <strong>and</strong> can offer help,<br />
Data can be exported to Excel (the possibility of further analysis),<br />
Ease of setting of scorecards (it is very important for designer).<br />
To conclude, the benefits of Oracle BSC is that it allows the BSC to be a full-fledged management<br />
tool - to better exploit its strengths <strong>and</strong> distribute relevant information across the company. Each<br />
employee can see how he manages to fulfill the objectives. Designer could easily turn to respond to<br />
requests from individual users (viewers) <strong>and</strong> adapted form of the information according to their needs.<br />
6. Conclusion<br />
In this paper attention has been paid to Balanced Scorecard methodology <strong>and</strong> its support through the<br />
use of the Oracle Balanced Scorecard application. Utilizing this application simplifies Balanced<br />
Scorecard methodology at all levels of management. Its advantages lie in relatively easy operation<br />
<strong>and</strong> a wide range of options, which enable the proposed Balanced Scorecard transposition into a<br />
business information system. Each individual can access data <strong>and</strong> information relating to their own<br />
performance. However, care must be taken when designing a Balanced Scorecard. Without this,<br />
benefits will be poor. Designing a Balanced Scorecard is the most important step <strong>and</strong> all persons<br />
connected with it must be part of this process. The information system is only a mirror reflecting their<br />
work. A strategy of good communication throughout the company is also essential <strong>and</strong> must include<br />
communication between Designers producing Scorecards for entry onto the system <strong>and</strong> the individual<br />
Viewers who will use the results of their labors. If these conditions are adhered to, the benefits of this<br />
application are sure to positively impact on a company’s performance.<br />
Acknowledgements<br />
This work was supported by IGA UTB, project number IGA/58/FaME/11/D.<br />
551
References<br />
Michal Pivnička<br />
Collis, D. J. <strong>and</strong> Montgomery, C. A. (2008) Competing on Resources, Harvard Business Review, July – August.<br />
Chhabra, S. (2005) 11i Balanced Scorecard Ed 2: Student Guide, Oracle.<br />
Kaplan, R. S. <strong>and</strong> Norton, D. P. (2007) Balanced Scorecard. Strategický systém měření výkonnosti podniku,<br />
<strong>Management</strong> Press, Praha.<br />
Kaplan, R. S. <strong>and</strong> Norton, D. P. (2010) Efektivní systém řízení strategie, <strong>Management</strong> Press, Praha.<br />
Kaplan R. S. <strong>and</strong> Norton, D. P. (2004) Strategy map, Harvard Business School Publishing Corporation, Boston.<br />
Sodomka, P. <strong>and</strong> Klčová, H. (2011) Informační systémy v podnikové praxi, Computer Press, Brno.<br />
Voříšek, J. (2008) Principy a modely řízení podnikové informatiky, Oeconomica, Praha.<br />
552
Challenges in Business Case Development <strong>and</strong><br />
Requirements for Business Case Frameworks<br />
Bart-Jan van Putten 1, 2 , Franziska Brecht 1 , <strong>and</strong> Oliver Günther 1<br />
1<br />
Institute of <strong>Information</strong> Systems, Humboldt-Universität zu Berlin, Germany<br />
2<br />
SAP Research Dresden, Germany<br />
bart-jan.van.putten@sap.com<br />
franziska.brecht@wiwi.hu-berlin.de<br />
Abstract: Business cases (BC) are often used to support information systems (IS) investment evaluation.<br />
Unfortunately, business case development (BCD) is a complex task, especially identifying <strong>and</strong> quantifying the<br />
benefits of a proposed investment. Although today’s business case frameworks (BCF) support BCD to some<br />
extent, they have several limitations. Based on a case study <strong>and</strong> interviews with BC developers, this study further<br />
investigates challenges in BCD, describes limitations of BCF <strong>and</strong> reveals opportunities for the improvement of<br />
BCF. Thus, a starting point is provided for user-centred designers <strong>and</strong> engineers who aim to develop better tool<br />
support for BCD. The results of the study show that the general focus areas should be (1) the support for reuse of<br />
BC components, (2) enabling adaptation <strong>and</strong> maintenance of BCs over longer periods of time, <strong>and</strong> (3) improving<br />
the collaboration among BC stakeholders. More specifically, the interviewees argue that more support is needed<br />
for market potential estimation, determining information quality, clarifying reasoning, <strong>and</strong> the reuse of structure.<br />
Keywords: IS, IT, investment, evaluation, business case, cost-benefit analysis, ROI<br />
1. Introduction<br />
Due to the high expenditures on information systems (IS), it is common practice that companies<br />
evaluate IS investment proposals. ‘Cost-benefit analyses of information systems’ (Sassone 1988),<br />
‘ex-ante information system evaluations’ (Walter & Spitta 2004), <strong>and</strong> ‘IT business cases’ (Brugger<br />
2009) play an important role in supporting investment decision making.<br />
A business case (BC) consist of qualitative <strong>and</strong> quantitative descriptions of benefits, costs <strong>and</strong> risks of<br />
each proposed investment alternative (Farbey et al. 1999a). Although some researchers <strong>and</strong><br />
practitioners use different terminology, the meaning <strong>and</strong> intentions of the components are generally<br />
the same, cf. (Brugger 2009; Gambles 2009; Schmidt 2009).<br />
The development of a BC is a complex task. According to Schmidt (2003), “a short list of what it takes<br />
to produce a good IT BC holds few surprises: one needs to be thorough (track down all possible<br />
impacts, costs, <strong>and</strong> benefits), clear <strong>and</strong> logical (articulate the cause <strong>and</strong> effect chain that leads to<br />
each cost/benefit impact), objective (unbiased, including everything that is material, good or bad) <strong>and</strong><br />
systematic (have good models <strong>and</strong> rules for finding <strong>and</strong> summarizing values). Financial talent also<br />
helps as does a solid grasp of the interplay between IT capacity, service levels, user needs, <strong>and</strong> IT<br />
resource requirements”.<br />
Today’s business case frameworks (BCF), such as document guidelines <strong>and</strong> spreadsheet templates,<br />
support business case development (BCD) to some extent, but have several limitations. The aim of<br />
the study at h<strong>and</strong> is to better underst<strong>and</strong> challenges in BCD, to describe the limitations of BCF <strong>and</strong> to<br />
reveal opportunities for improvement of BCF. This should provide a starting point for user-centred<br />
designers <strong>and</strong> engineers who aim to develop better tool support for BCD.<br />
The structure of this paper is as follows: in section 2, a background for BC, BCD <strong>and</strong> BCF is provided.<br />
In section 3, the research approach is described. Section 4 summarizes the results of the case study.<br />
Based on that, section 5 proposes three solution areas for BCD support. Section 6 reports on the<br />
results of interviews with BC developers <strong>and</strong> section 7 concludes this paper.<br />
2. Background<br />
2.1 Business cases<br />
A BC is a recommendation to decision makers to take a particular course of action for the<br />
organisation, supported by an analysis of benefits, costs <strong>and</strong> risks (...), with an explanation of how it<br />
can best be implemented (Gambles 2009). It documents the relevant facts <strong>and</strong> situational analysis,<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
key metrics, financial analysis, allows different projects with different goals to be compared <strong>and</strong><br />
contrasted <strong>and</strong> serves as a communication tool (Gliedman et al. 2004). The BC can be seen as the<br />
successor of cost-benefit analysis (King & Schrems 1978; Sassone 1988). Whereas the principles of<br />
cost-benefit analysis mainly come from accounting <strong>and</strong> are thus financially oriented, BCs put<br />
additional emphasis on strategic benefits, indirect costs, risks, social <strong>and</strong> organisational factors, i.e.,<br />
the ‘intangible’ criteria.<br />
BCs commonly appear as spreadsheets, sometimes accompanied by presentations or explanatory<br />
documents. They may be presented by the project leader (BC ‘owner’ or ‘champion’) to senior<br />
management, which is responsible for prioritizing BCs <strong>and</strong> making investment decisions. This way,<br />
the BC can be used to decide about investment before project execution (‘ex-ante’), to evaluate<br />
progress during project execution <strong>and</strong> to determine to which extent the proposed value of the<br />
investment has been realized after project execution (‘ex-post’) (Ward et al. 1996).<br />
2.2 Business case development<br />
To the best of the author’s knowledge there is no definition of business case development (BCD) in<br />
literature. Therefore the following working definition is proposed: Business case development is the<br />
process of realising the business case as an ‘artefact’, by gathering <strong>and</strong> analysing data to define <strong>and</strong><br />
valuate evaluation criteria, presenting it in documents, spreadsheets or presentations. It may take<br />
place before project execution for investment appraisal, during project execution for continuous<br />
monitoring <strong>and</strong> control, or after project execution for organizational learning. This definition is quite<br />
similar to the definition of IS evaluation by Farbey et al. (1999a, p.205), but focuses on the creation of<br />
the BC as an artefact, rather than the organizational process in which it is used.<br />
There are many problems in BCD, such as those identified by Farbey et al. (1993), <strong>and</strong> most of them<br />
are still prevalent today, cf. (Ballantine & Stray 1998; Farbey et al. 1999b; Irani 2002; Walter & Spitta<br />
2004; Berghout & Remenyi 2003). Ward et al. (2008) found in a study among over 100 European<br />
companies that 65% of respondents indicated their organizations were not satisfied with their ability to<br />
identify all benefits, with 69% reporting that they do not adequately quantify <strong>and</strong> place a ‘value’ on the<br />
benefits for inclusion in the BC. 38% of the respondents believed their current approach led them to<br />
frequently overstate the benefits to obtain funding.<br />
2.3 Business case frameworks<br />
A BCF is a set of guidelines, methods, templates or tools to support BCD. Guidelines often come in<br />
the form of document or presentation outlines, which loosely describe the required components of a<br />
BC, e.g., (Cardin et al. 2007; Gliedman et al. 2004), <strong>and</strong> what metrics to use, depending on the<br />
requirements of the BC evaluators of the organization in which the BCF is used. Although these<br />
guidelines can be helpful <strong>and</strong> hardly limit BC developers in their expressiveness, they mainly concern<br />
the ‘what’, i.e., declarative BCD knowledge, <strong>and</strong> not the ‘how’, i.e., procedural BCD knowledge. One<br />
of the reasons for this is that most BCF have been designed to ease the life of BC evaluators rather<br />
than BC developers. As such, guidelines often do not provide much guidance on how the BC<br />
developer should achieve the desired results.<br />
Methods or techniques such as listed by Irani et al. (1997, p.699) or Renkema <strong>and</strong> Berghout (1997,<br />
p.10) have the potential to support BC developers in the ‘how’ of BCs, but are sometimes rather<br />
generic descriptions, see e.g., (Ward et al. 2008), <strong>and</strong> need to be combined with more specific<br />
methods, see e.g., (Love et al. 2004), to identify <strong>and</strong> quantify the benefits, costs <strong>and</strong> risks for a project<br />
in a specific industry. Moreover, it is a question which method is most suitable in which case (Farbey<br />
et al. 1995; Joshi & Pant 2008).<br />
Like guidelines, templates are often developed <strong>and</strong> kept company internal. Templates are built for<br />
specific types of projects, so companies may use multiple templates. Mostly they come in the form of<br />
a spreadsheet with a rigid structure <strong>and</strong> strict content requirements, thus limiting the expressiveness<br />
of the developer. However, such templates ensure the homogeneity among BCs <strong>and</strong> the investment<br />
alternatives within them. Homogeneity enables BC evaluators to work more efficiently, as they can<br />
then more easily compare <strong>and</strong> prioritize BCs.<br />
Tools or applications often come in the form of advanced spreadsheets, e.g., with data import <strong>and</strong><br />
export functionality, or controls that trigger changes between different worksheets of the spreadsheet.<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
Tools mainly aim to increase the efficiency of BCD <strong>and</strong> are often highly organization <strong>and</strong> project typespecific.<br />
Public templates <strong>and</strong> tools, e.g., (BusinessCase.com 2010; SolutionMatrix Ltd. 2010) –<br />
commercial or for free – are often generic implementations of traditional financials investment<br />
appraisal methods, such as Return-on-Investment (ROI), Net Present Value (NPV) <strong>and</strong> Payback Time<br />
(Brealey & Myers 1988), without much support for the real challenges for BC developers: the<br />
identification of benefits <strong>and</strong> the quantification of intangible benefits <strong>and</strong> indirect costs (Ballantine &<br />
Stray 1998; Ward et al. 2008; Irani 2002).<br />
3. Research approach<br />
The research approach of the study at h<strong>and</strong> is based on methodological triangulation, a concept from<br />
social science, described by Denzin (2006). Figure 1 gives a simplified overview of the approach. It<br />
was an iterative process, in which the insights gradually transitioned from challenges/problems to<br />
requirements/solutions. The case study led to a better underst<strong>and</strong>ing of challenges in BCD (section<br />
4). Based on that, three high-level solution areas were defined as a vision for the development of<br />
better BCF (section 5). Finally, interviews were conducted to refine the solution areas in more detail<br />
<strong>and</strong> to derive priorities for future research (section 6). Each of these steps will be described in more<br />
detail in a following section.<br />
Figure 1: Overview of the research approach<br />
4. Case study<br />
One of the authors was involved in the development of a BC at a global IT company. The BC<br />
proposed the ‘productisation’ of a concept for a new software solution, which would involve software<br />
development, marketing, sales <strong>and</strong> support of the solution. Participant observation (K. M. DeWalt et<br />
al. 1998; Douglas 1976) was applied during the BCD project, which took about 14 months. Notes<br />
were taken of all meetings <strong>and</strong> telephone calls, which resulted in a large amount of case data.<br />
Particular attention was given to challenges in BCD. To communicate these challenges in an effective<br />
manner they have been incorporated in a fictional, but realistic story. Story telling is a common<br />
technique in user-centred design to better underst<strong>and</strong> the needs of people <strong>and</strong> to express them<br />
concretely (Norman & Draper 1986). The remainder of this section will first present the story <strong>and</strong> then<br />
extract the BCD challenges. Figure 2 visualizes the story as a BPMN process model.<br />
(Start of BCD story)<br />
Marta is 35 <strong>and</strong> works as a product manager in a large IT company. Marta has an innovative idea for<br />
a new product that could potentially be sold by the company. To get approval from the company’s<br />
senior management for productisation of the idea, Marta needs a BC. The BC should consist of an<br />
explanation of the benefits for the company to extend its product portfolio, a cost model <strong>and</strong> an<br />
analysis of potential risks.<br />
As the company’s senior management is most sensitive to financial arguments (e.g., potential<br />
revenue of the new product), one of the most important things to find out is how many customers<br />
would be interested in the new product. Therefore Marta asks Peter, 28, one of her team members<br />
with experience in business analysis <strong>and</strong> marketing, to collect the required information. To give Peter<br />
a head start, Marta provides him with an old BC for another idea that has been productized in the<br />
past.<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
Peter decides to start by analyzing the old BC. It consists of a market potential estimation <strong>and</strong> a cost<br />
model in a spreadsheet. There is also a document which explains several intangible benefits (i.e.,<br />
benefits that could not be quantified) <strong>and</strong> that points to the spreadsheet for the tangible benefit:<br />
expected revenue for the new product, based on a market potential estimation.<br />
The spreadsheet appears to contain an interesting structure to distinguish between cross-selling <strong>and</strong><br />
up-selling opportunities. Unfortunately, Peter can not completely underst<strong>and</strong> the reasoning behind the<br />
calculation methods. Therefore he asks Marta for the name of the author of the BC, but learns that<br />
‘Tim’ is no longer with the company. Thus, Peter designs a new spreadsheet with an adapted<br />
calculation method that is workable for him.<br />
After that, Peter calls David, a software developer. With David he estimates the required development<br />
effort required to turn Marta’s idea into a full-fledged product. He also learns that the company<br />
currently has about 300 existing customers that would potentially be interested in the new product. As<br />
the company does not exactly know how many customers are really <strong>using</strong> the existing product, this<br />
number is an estimate that is based on the number of error messages that the company receives.<br />
Peter then calls Eva, a sales colleague. Eva says that there are about 700 existing customers, of<br />
whom 80% would probably be interested in the new product, as long as the product is interoperable<br />
with legacy systems.<br />
After that, Peter builds a first draft of the market potential estimation spreadsheet. As Eva has a closer<br />
relationship with the company's customers than David, Peter decides to use the numbers that Eva<br />
suggested. To calculate the revenue potential, Peter multiplies the expected number of customers<br />
with his estimation for the number of required licenses per customer <strong>and</strong> the price per license.<br />
Actually, Peter is applying a license-based pricing model, but he is not aware of that.<br />
A few days later, Peter calls Stephan, from the pricing strategy team. Peter explains to Stephan that<br />
he now has some underst<strong>and</strong>ing of the market for the new product. However, to calculate the<br />
potential revenue for the company, he roughly needs to know the price that can be charged for it.<br />
Stephan explains that pricing is a complicated process <strong>and</strong> that it is more likely that a usage-based<br />
pricing model will be applied. Stephan also provides Peter with some prices of similar products that<br />
are already on the market. Finally, Peter changes the pricing model, finishes the market potential<br />
estimation <strong>and</strong> presents it to Marta.<br />
(End of BCD story)<br />
When analysing the story, one sees that Peter, the BC developer, would like to reuse the market<br />
potential estimation template from the earlier BC. Unfortunately he can not underst<strong>and</strong> the reasoning<br />
behind it, nor get in contact with the earlier developer. Therefore he needs to change the calculation<br />
method. As a consequence, he may be <strong>using</strong> a less reliable quantification method <strong>and</strong> it will be<br />
harder to compare the new BC with the earlier one.<br />
Peter receives inconsistent information from David <strong>and</strong> Eva regarding the number of customers. He<br />
decides to replace David's input with Eva's information, but thereby looses the perspective of David,<br />
which may be appreciated by BC evaluators later on. Another issue is that the number of customers is<br />
bound to change. In order to keep the BC accurate, Peter needs to update it continuously, based on<br />
the information that he receives.<br />
Peter needs to apply a pricing model. At first he applies a license-based pricing model, but later on it<br />
appears that he should be <strong>using</strong> a usage-based pricing model. Such a switch is not uncommon in the<br />
iterative BCD process. However, Peter needs to develop <strong>and</strong> change the calculation methods himself.<br />
This is less efficient than if pre-defined pricing models could be applied <strong>and</strong> switched on the fly.<br />
Moreover, the ‘home grown’ method may be less reliable <strong>and</strong> will make the BC less comparable with<br />
other BCs.<br />
5. Solution areas<br />
Reuse: The content of earlier BCs can be valuable. For example, when estimating the payback period<br />
for an investment, it is possible to take an average of the payback periods of several earlier BCs. This<br />
way, data from earlier BCs could be used to evaluate the probability that a newer BCs is reliable. The<br />
reuse of BC content is about re<strong>using</strong> benefit, cost <strong>and</strong> risk factors <strong>and</strong> their values. The reuse of BC<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
structure is about re<strong>using</strong> methods for ordering, aggregating <strong>and</strong> manipulating factors <strong>and</strong> values.<br />
Current BCF support reuse to some extent. Especially the strict spreadsheet templates enable – or<br />
enforce – the reuse of structure. However, these templates are often inflexible <strong>and</strong> unusable for<br />
unexpected applications. Moreover, the reuse of content is very limited as spreadsheets are often<br />
unconnected files, residing on a developers’ individual computers. The authors envision BCF that may<br />
look <strong>and</strong> feel like ordinary spreadsheets, but which allow BC developers to interact with content that is<br />
partly stored in central databases <strong>and</strong> which support the development of reusable components of<br />
content <strong>and</strong> structure. This enables the reuse of content <strong>and</strong> structure among BCs <strong>and</strong> among BC<br />
developers.<br />
Figure 2: BCD story, modelled in BPMN<br />
Adaptation: Current BCF often only support adaptation in the sense that BC developers need to put in<br />
manual effort to do so. The authors envision BCF that support the (semi-) automatic adaptation of<br />
BCs, e.g., by st<strong>and</strong>ardizing user input parameters, such as the pricing model, <strong>and</strong> by synchronizing<br />
BC content with real-time dynamic data sources such as the databases in enterprise resource<br />
planning (ERP) systems. This will not just increase the efficiency of BCD, but will also make BCs<br />
more useful on the long-term, e.g., during project execution. Moreover, BCF could show the<br />
discrepancy between actual values (ex-post) <strong>and</strong> estimated values (ex-ante), facilitating project<br />
management interventions <strong>and</strong> organizational learning.<br />
Collaboration: Current BCF, especially spreadsheet-based BCF that are not accompanied by<br />
explanatory text documents, hardly support collaboration. Although it is possible to send around<br />
documents <strong>and</strong> ask people for input, the chances are high that other BC developers <strong>and</strong> evaluators<br />
do not underst<strong>and</strong> the underlying assumptions, the calculation methods used, or have difficulties with<br />
judging the reliability of information. The authors envision BCF that support collaborative BCD across<br />
development projects, across organizations <strong>and</strong> across time, e.g., by making assumptions explicit, by<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
clarifying the source of content, by clarifying the quality of content, by enabling different viewpoints on<br />
the same piece of information <strong>and</strong> by providing ways to share <strong>and</strong> protect information. This will not<br />
just increase the efficiency of BCD, but will also make BCs more reliable for evaluators <strong>and</strong> support<br />
today’s collaborative ways of doing business.<br />
6. Interviews<br />
To refine the identification of challenges <strong>and</strong> requirements in the reuse, adaptation <strong>and</strong> collaboration<br />
solution areas, 15 topics were identified (Table 1). Each of the topics was discussed during the eight<br />
structured interviews that were conducted with BC developers, who were invited among the industrial<br />
companies participating in three research projects (ADiWa 2010; Aletheia 2010; SemProM 2010).<br />
They were selected, because they were, or would be, developing BCs for new IS that were under<br />
investigation in those research projects. The interviewees represented different industries: high tech<br />
(3x), information technology (2x), logistics (2x), automotive (1x). The interviewees had experience in<br />
BCD, but were not necessarily experts, <strong>and</strong> were representative for the population of target users of<br />
the advanced BCF.<br />
Each interview consisted of three main parts:<br />
“Business cases in your organization”: This part investigated the development <strong>and</strong> use of BCs in<br />
the organization <strong>and</strong> the role of the interviewee in that matter.<br />
“Business case frameworks in your organization”: This part investigated the use of BCF in the<br />
organization, the role of the interviewee in that matter <strong>and</strong> the interest in a BCF that would be<br />
specific for the technology domain being investigated in the respective research project (Aletheia,<br />
SemProM, or ADiWa).<br />
“Challenges & Requirements”: This part investigated the 15 topics.<br />
Table 1: Research topics within the solution areas <strong>and</strong> the scores from the interviews<br />
Topic Reuse Adapt. Colla. Relevance Challenge Support<br />
Mean SD Mean SD Mean SD<br />
Reuse of Content X 1,14 0,90 0,43 0,53 1,29 0,49<br />
Reuse of Structure X 1,63 0,52 -0,13 1,25 1,75 0,46<br />
Aggregation X 1,14 1,21 1,50 1,22 0,50 0,84<br />
Comparison X 1,50 0,76 1,13 1,13 0,86 1,07<br />
Provider vs. Customer Persp. X 1,38 0,74 0,88 1,36 1,13 0,99<br />
Market Potential Estimation X 1,75 0,46 1,50 0,53 1,00 1,31<br />
Changing Assumptions X 1,14 1,46 0,14 1,57 1,00 1,73<br />
Product Innovation Lifecycle X 1,25 0,71 0,17 0,98 0,57 0,98<br />
Business Model Adaptivity X 1,38 1,06 2,00 0,00 0,60 1,67<br />
Clarifying Reasoning X 1,88 0,35 1,25 0,89 1,38 1,06<br />
Stakeholders’ Opinions X 1,00 1,41 0,00 0,82 0,75 1,58<br />
<strong>Information</strong> Sources X 1,50 0,53 1,00 1,07 1,00 0,58<br />
<strong>Information</strong> Quality X 1,63 0,52 1,13 0,83 1,43 0,53<br />
Sharing X 0,86 1,07 0,33 1,21 0,43 1,40<br />
Security X 1,50 0,76 -0,50 0,84 0,57 0,98<br />
The 15 topics were investigated in the interviews along three dimensions: the relevance dimension,<br />
the challenge dimension <strong>and</strong> the support dimension. The relevance dimension was used to<br />
investigate the required properties of BCs (not of BCF). E.g., a respondent could argue that<br />
‘information quality’ is a relevant property of a BC – or not. It is assumed that relevant properties<br />
should be obtainable through the use of BCF, or in the case that they can not be obtained through the<br />
use of a BCF, the BCF should at least not prevent that. The challenge dimension was used to<br />
investigate the complexity of the BCD task required to obtain (BC developer) or judge (BC evaluator)<br />
the respective property of the BC. E.g., irrespective of the relevance of the topic, the interviewee<br />
could argue that ‘determining information quality’ is a challenging BCD task. It is assumed that<br />
challenging tasks are good c<strong>and</strong>idates for BCF support. The support dimension was used to<br />
investigate the need for BCF support for the respective BCD task. This dimension implicitly measured<br />
a mixture of the respondent’s hope that a BCF would support the BCD task <strong>and</strong> the respondent’s<br />
belief in the ability of a BCF to support the task, which in turn is based on the respondent’s knowledge<br />
of state-of-the-art BCF <strong>and</strong> his/her imagination. Thus, the authors were aware of the inaccuracy of the<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
dimension, which was therefore mainly used to provoke responses regarding which BCD tasks<br />
could/should be automated <strong>and</strong> which could/should not.<br />
For each topic, for each dimension, a statement was defined. E.g., for the topic <strong>Information</strong> Quality<br />
the statements were:<br />
“The quality of information in a business case should be clear.” (relevance dimension)<br />
“Determining the quality of information in a business case is a challenge.” (challenge dimension)<br />
“A BCF should support the determination of the quality of information.” (support dimension)<br />
The interviewees were asked to what extent they agreed with the statements. A five point Likert-scale<br />
ranging from -2 (‘strongly disagree’) to +2 (‘strongly agree’), including a ‘no opinion’ option was used.<br />
Table 1 shows the mean scores <strong>and</strong> st<strong>and</strong>ard deviations, all with a sample size of eight. Based on the<br />
mean scores, Figure 3 was drawn. Each dot represents one of the 15 topics. The size of the dot<br />
represents the relevance of the topic (note that the scores have been categorized so that there are<br />
only three different sizes, which makes it easier to see the difference in size). The vertical axis<br />
represents the challenge dimension. The challenging topics need to be understood better <strong>and</strong> thus<br />
require further investigation. The horizontal axis represents the support dimension. If BCF support is<br />
needed, supporting functionality should be implemented.<br />
Figure 3: The 15 topics structured along the three dimensions, based on the interviews<br />
Four topics, Market Potential Estimation (MPE), <strong>Information</strong> Quality (IQ), Clarifying Reasoning (CR)<br />
<strong>and</strong> Reuse of Structure (RS), fall in the highest relevance category. Three of them, MPE, IQ, CR, are<br />
both challenging <strong>and</strong> require BCF support according to the interviewees. One topic, RS, only requires<br />
BCF support but is not perceived as challenging. The remainder of this section will describe the<br />
results of the interviews regarding these four topics in more detail.<br />
Market Potential Estimation (MPE) is about estimating the sales <strong>and</strong> revenue potential for a certain<br />
product or service, offered to a specific market segment. MPE is an issue for companies who sell<br />
products or services <strong>and</strong> thus make ‘provider perspective BCs’. The interviewees strongly agreed with<br />
the relevance of the topic <strong>and</strong> stated that it can be very challenging unless you have a lot of<br />
experience in the respective market. They also strongly agreed with the need for BCF support for this<br />
challenge.<br />
<strong>Information</strong> Quality (IQ) is about making sure that BCs are reliable <strong>and</strong> have predictive value.<br />
Gathering reliable data can be hard, doing quantifications on that data can be hard, but also<br />
determining the quality of information provided by others can be hard, e.g., a precise number may<br />
give an accurate impression, but may be a rough estimate in reality. Interviewees agree with the<br />
relevance of the topic, agree with the challenges <strong>and</strong> agree with the need for BCF support.<br />
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Bart-Jan van Putten, Franziska Brecht, <strong>and</strong> Oliver Günther<br />
Clarifying Reasoning (CR) is about enabling evaluators <strong>and</strong> other stakeholders of the BC to<br />
underst<strong>and</strong> the reasoning behind estimations. That way, those people may be able to better<br />
determine the quality of information <strong>and</strong> if certain estimates still hold, or if conditions have changed in<br />
such a way that estimates need to be revised. Interviewees strongly agree that this is relevant <strong>and</strong><br />
agree that it can be very challenging, depending on the stakeholders. They also strongly agree that<br />
BCF support is needed for this.<br />
Reuse of Structure (RS) is about enabling BC developers to reapply the same criteria <strong>and</strong><br />
quantification methods as used in other BCs, thereby improving the efficiency of BCD <strong>and</strong> the<br />
reliability <strong>and</strong> comparability of BCs. Interviewees agree that reuse of content <strong>and</strong> structure is relevant.<br />
Although they do not see this as a challenge, they strongly agree with the need for BCF support.<br />
However, they warn that it should always remain possible to make adjustments to templates, that<br />
reuse may lead to more mistakes, that reuse may lead to the comparison of ‘apples <strong>and</strong> eggs’ <strong>and</strong><br />
that reuse only works for the same types of BCs.<br />
7. Conclusion<br />
The aim of this study was to better underst<strong>and</strong> challenges in BCD, to describe limitations of BCF <strong>and</strong><br />
to reveal opportunities for improvement of BCF. In order to achieve this, participant observation was<br />
applied during a 14 month BCD project at a global IT company (the ‘case study’). The derived<br />
challenges in BCD were presented in the form of a story. Next, three solution areas for improvement<br />
of BCF were defined: reuse, adaptation <strong>and</strong> collaboration. These areas were refined to 15 topics,<br />
which were investigated through interviews with BC developers along the relevance, challenge <strong>and</strong><br />
support dimensions. The interviewees argued that more support is especially needed for market<br />
potential estimation, determining information quality, clarifying reasoning <strong>and</strong> the reuse of structure.<br />
This provides a starting point for user-centred researchers, designers, <strong>and</strong> engineers who aim to<br />
develop better tool support for BCD.<br />
The limitations of this study are that the case study was executed with only one company <strong>and</strong> that<br />
only eight interviews were conducted. Overall, the findings presented in this paper should be<br />
considered as explorative. The existing body of knowledge on IS evaluation is relevant, despite<br />
foc<strong>using</strong> more on the organizational challenges in the evaluation of IS, than on the individual<br />
challenges of BC developers in practice.<br />
Future work should move towards the design of an advanced BCF prototype. Usability experiments<br />
should be conducted to test whether the prototype supports the efficiency <strong>and</strong> effectiveness of BCD<br />
<strong>and</strong> if it enhances the satisfaction of BC developers when working with the BCF.<br />
Acknowledgements<br />
The authors thank the SemProM, Aletheia <strong>and</strong> ADiWa project partners who participated in the<br />
interviews. This research is partly funded by the German Ministry for Education <strong>and</strong> Research (BMBF)<br />
under contract 01IA08002, project SemProM, from February 2008 through January 2011.<br />
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561
The Relation Between Dynamic Business Models <strong>and</strong><br />
Business Cases<br />
Bart-Jan van Putten 1, 3 2, 4<br />
<strong>and</strong> Markus Schief<br />
1<br />
Humboldt-Universität zu Berlin, Germany<br />
2<br />
Technische Universität Darmstadt, Germany<br />
3<br />
SAP Research Dresden, SAP AG, Germany<br />
4<br />
SAP Research Darmstadt, SAP AG, Germany<br />
bart-jan.van.putten@sap.com<br />
markus.schief@sap.com<br />
Abstract: The agility of companies can be increased when implementing merged or changed business models in<br />
the organization <strong>and</strong> when <strong>using</strong> business cases to determine if it is time to change the business model. This<br />
study clarifies the relation between business models, as an implementation of a company’s strategy, <strong>and</strong><br />
business cases, as an abstraction of a company’s operations. The relations are analyzed from a static as well as<br />
a dynamic point of view by means of inductive reasoning <strong>and</strong> literature review. The explorative findings may be<br />
used as a starting point for further research <strong>and</strong> for the design of future information systems which utilize these<br />
relations.<br />
Keywords: business model, business case, strategy, operations, management, implementation<br />
1. Introduction<br />
Companies are continuously striving for more agility. One of the challenges is the rapid translation of<br />
changes in a company’s strategy to its operations <strong>and</strong> vice versa. For example, after the acquisition of<br />
Sun by Oracle, Oracle cut former Sun partners, without notice, from their hardware maintenance<br />
renewals business (Kovar 2010). For many of those partners, maintenance renewals were an<br />
essential part of economic survival. Therefore, these companies needed a very high degree of agility<br />
to be able to adapt their strategy <strong>and</strong> implement it in changed operations before they would go out of<br />
business.<br />
Unfortunately, there is a gap between business strategy <strong>and</strong> business processes, hampering<br />
companies’ agility (Al-Debei & Avison 2010, p.370). Al-Debei & Avison propose to fill this gap with the<br />
‘business model’ (BM), which can be used to “translate the broad strategy into more specific business<br />
architectural, co-operational, value propositional, <strong>and</strong> financial arrangements needed to achieve the<br />
strategic goals <strong>and</strong> objectives of the business“. This study builds upon that claim <strong>and</strong> aims to show<br />
that ‚business cases‘ (BC), i.e., the (documented) rationale for executing a project or investment in<br />
accordance with the strategy, complement the business model in closing the gap between strategy<br />
<strong>and</strong> operations. The mutual relationships between BM <strong>and</strong> BC may be taken into account in today’s<br />
business practice implicitly, but with some exceptions, e.g., (Casadesus-Masanell & Ricart 2010), they<br />
did not receive much attention in literature. Therefore, this study aims to clarify the relation between<br />
BM <strong>and</strong> BC, based on literature review <strong>and</strong> inductive reasoning. Throughout the study, mergers &<br />
acquisitions (M&A) will be used as an example because they often cause disruptive changes in the<br />
strategy <strong>and</strong> operations of companies.<br />
The structure of this paper is as follows. Section 2 provides a background on the BM <strong>and</strong> BC<br />
concepts <strong>and</strong> the factors ca<strong>using</strong> BM <strong>and</strong> BC dynamics. Section 3 analyzes static similarities between<br />
BMs <strong>and</strong> BCs <strong>and</strong> dynamic influences of a BM on BCs <strong>and</strong> vice versa. Section 4 concludes this<br />
paper.<br />
2. Background<br />
2.1 Business models<br />
While several definitions of business models can be found (Morris et al. 2005), Osterwalder et al.<br />
(2005) provide the following definition: “A business model is a conceptual tool that contains a set of<br />
elements <strong>and</strong> their relationships <strong>and</strong> allows expressing the business logic of a specific firm. It is a<br />
description of the value a company offers to one or several segments of customers <strong>and</strong> of the<br />
architecture of the firm <strong>and</strong> its network of partners for creating, marketing, <strong>and</strong> delivering this value<br />
<strong>and</strong> relationship capital, to generate profitable <strong>and</strong> sustainable revenue streams.”<br />
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Bart-Jan van Putten <strong>and</strong> Markus Schief<br />
According to Gordijn et al. (2005), in literature, the notion of ‘business model’ is interpreted in the<br />
following ways: (1) as a taxonomy (such as e-shops, malls, auctions) <strong>and</strong> (2) as a conceptual model<br />
of the way we do business. Taxonomies enumerate a finite number of BM types, e.g. (Bambury 1998;<br />
Timmers 1998; Weill & Vitale 2002), while a conceptualization of ‘business model’ describes a metamodel<br />
or a reference model, allowing to describe an infinite number of BMs, e.g., (Amit & Zott 2001;<br />
Gordijn & Akkermans 2003; Mahadevan 2000; Weill & Vitale 2002).<br />
Examples of BM conceptualizations, or ‘ontologies’ (Gruber 1993), are REA, e3-value, <strong>and</strong> BMO<br />
(Andersson et al. 2006), of which BMO is the ontology that is proposed by Osterwalder et al. (2005).<br />
Andersson et al. (2006) state that BMO has the widest scope. For that reason, the BMO ontology will<br />
be used in this study as an exemplary conceptualization, to be able to relate the BM concept to the<br />
BC concept. Table 1 shows the nine BM building blocks (2005).<br />
Table 1: Nine business model building blocks, adopted from (Osterwalder et al. 2005)<br />
Business Model<br />
Building Block<br />
Description<br />
Value Proposition Gives an overall view of a company’s bundle of products <strong>and</strong> services.<br />
Target Customer Describes the segments of customers a company wants to offer value to.<br />
Distribution Channel Describes the various means of the company to get in touch with its customers.<br />
Relationship Explains the kind of links a company establishes between itself <strong>and</strong> its different<br />
customer segments.<br />
Value Configuration Describes the arrangement of activities <strong>and</strong> resources.<br />
Core Competency Outlines the competencies necessary to execute the company’s business model.<br />
Partner Network Portrays the network of cooperative agreements with other companies necessary to<br />
efficiently offer <strong>and</strong> commercialize value.<br />
Cost Structure Sums up the monetary consequences of the means employed in the business<br />
model.<br />
Revenue Model Describes the way a company makes money through a variety of revenue flows.<br />
2.2 Business cases<br />
A BC is a recommendation to decision makers to take a particular course of action for the<br />
organisation, supported by an analysis of benefits, costs <strong>and</strong> risks (...), with an explanation of how it<br />
can best be implemented (Gambles 2009). It documents the relevant facts <strong>and</strong> situational analysis,<br />
key metrics, financial analysis, allows different projects with different goals to be compared <strong>and</strong><br />
contrasted <strong>and</strong> serves as a communication tool (Gliedman et al. 2004). BCs can be developed for any<br />
type of investment or project, including the investment in the extension of a company’s product <strong>and</strong><br />
service portfolio. Such BCs may be termed ‘provider perspective BCs’ as the resulting products are<br />
then sold to customers who may use ‘customer perspective BCs’ to evaluate their investment. BCs<br />
commonly appear as spreadsheets, sometimes accompanied by presentations or explanatory<br />
documents. They may be presented by the project leader (BC ‘owner’ or ‘champion’) to senior<br />
management, which is responsible for prioritizing BCs <strong>and</strong> making investment decisions. This way,<br />
the BC can be used to decide about investment before project execution (‘ex-ante’), to evaluate<br />
progress during project execution, <strong>and</strong> to determine to which extent the proposed value of the<br />
investment has been realized after project execution (‘ex-post’) (J. Ward et al. 1996).<br />
There are many authors who describe the components of a BC, e.g., (Cardin et al. 2007; Gliedman et<br />
al. 2004). Although a large variety of components can be included, the common denominator is a set<br />
of criteria to evaluate the proposed investment. Those criteria are generally classified as benefits,<br />
costs, <strong>and</strong> risks. To support decision making, a value needs to be assigned to each criterion. The<br />
value expresses the estimated future situation, in an absolute manner, or relative to the status quo.<br />
The value can be qualitative, quantitative, financial, or non-financial. To estimate the value, a wide<br />
range of methods can be applied, such as benchmarking <strong>and</strong> pilot projects (J. Ward et al. 2008). With<br />
some exceptions (Ross & Beath 2002; J. Ward et al. 2008), the term BC is infrequently used in<br />
literature. Rather, scientists study ‘information systems (investment) evaluation’. Farbey et al. (1999a,<br />
p.205) define that “as a process that takes place at different points in time or continuously, for<br />
searching for <strong>and</strong> making explicit, quantitatively or qualitatively, all impacts of an IS project”.<br />
2.3 Business model/case dynamics<br />
With a few exceptions (Al-Debei & Avison 2010; Ian MacInnes 2005; Vaccaro & Cohn 2004), most<br />
literature has taken a static perspective on business models (Lindner et al. 2010). They are used to<br />
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Bart-Jan van Putten <strong>and</strong> Markus Schief<br />
describe the value-creating logic of organizations at a certain moment in time. Hereby the implicit<br />
assumption is that business models remain steady over time, <strong>and</strong> that choices are rarely adjusted.<br />
However, in reality business models do not persist forever. Organizations often have to review their<br />
business models in order to keep in line with changing environments (Afuah & C. Tucci 2003). As a<br />
result, de Reuver et al. (2007) argue that business models have to keep up with external changes<br />
during all phases from development to exploitation.<br />
Johnson et al. (2008) describe ‘business model innovation’ <strong>and</strong> five strategic circumstances that often<br />
require business model change:<br />
The opportunity to address through disruptive innovation the needs of large groups of potential<br />
customers who are shut out of a market entirely because existing solutions are too expensive or<br />
complicated for them.<br />
The opportunity to capitalize on a br<strong>and</strong> new technology by wrapping a new business model<br />
around it, or the opportunity to leverage a tested technology by bringing it to a whole new market.<br />
The opportunity to bring a ‘job-to-be-done’ focus where one does not yet exist.<br />
The need to fend off low-end disrupters.<br />
The need to respond to a shifting basis of competition.<br />
In a similar way, Weiner et al. (2010) mention strategy, market, technology <strong>and</strong> regulatory influences<br />
on the BM. Moreover, the ‘hype cycle phase’ can be considered as an influencing factor (Fenn &<br />
Raskino 2008).<br />
As it takes a tremendous amount of time <strong>and</strong> effort to realize a BM, it is common sense that a BM,<br />
although never completely static, is used for a longer period of time (Demil & Lecocq 2010). This<br />
underst<strong>and</strong>ing is not as common in the area of BCs, where many companies only use BCs prior to<br />
investment (J. Ward et al. 2008), rather than <strong>using</strong> them as a project realization <strong>and</strong> evaluation tool.<br />
However, some authors underst<strong>and</strong> that a BC can also be useful after the initial investment decision<br />
<strong>and</strong> argue for long time use <strong>and</strong> organizational learning (Farbey, L<strong>and</strong> & Targett 1999b; J. Ward et al.<br />
1996).<br />
When a BC is used over a longer period of time, the BC (i.e., the project which the BC represents)<br />
becomes subject to similar influences like BMs. E.g., due to changes on the market, the expected<br />
revenue for a certain product for which the BC was developed, may start to decline. In addition to<br />
such external influences, BCs are subject to company internal factors, among which user<br />
involvement, project management, implementation, communication <strong>and</strong> corporate underst<strong>and</strong>ing<br />
(Farbey et al. 1993).<br />
An illustrative example for BM/BC dynamics can be drawn from mergers <strong>and</strong> acquisitions (M&A),<br />
where heterogeneous BMs <strong>and</strong> BCs need to be aligned. Thus, this study will present concepts in that<br />
context.<br />
3. Relations<br />
3.1 Similarities between business models <strong>and</strong> business cases<br />
According to Brews <strong>and</strong> Tucci (2003), BM implementation <strong>and</strong> management include the "translation"<br />
of the BM as a plan into more concrete elements, such as a business structure (e.g., departments,<br />
units, human resources), business processes (e.g., workflows, responsibilities), <strong>and</strong> infrastructure <strong>and</strong><br />
systems (e.g., buildings, ICT). This study assumes that a BC can be seen as a BM implementation,<br />
which raises the question what they have in common. To provide an initial answer, the BM <strong>and</strong> BC<br />
concepts need to be decomposed. Conceptualizations as described in section 2.1 <strong>and</strong> 2.2 may be<br />
used. The BM concept can be decomposed in its nine building blocks, <strong>and</strong> the BC concept can be<br />
seen as a set of criteria for evaluation, possibly classified as benefits, costs, risks. In Table 2 for each<br />
of the BM building blocks, some examples of common BC evaluation criteria from the domain of<br />
information systems (T.-Y. Chou et al. 2006) are presented.<br />
As a BC can theoretically contain any criterion, a BC does not necessarily contain implementations of<br />
all BM building blocks. However, on the basis of Table 2 one could argue that there are many<br />
overlaps between the BM <strong>and</strong> BC concepts. In addition to the similarities between BM <strong>and</strong> BC, there<br />
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are differences. For example, BCs often aim to improve ‘competitive advantage’, while Osterwalder et<br />
al. (2005) make the following claim about the BM concept: “We excluded all elements related to<br />
competition <strong>and</strong> to business model implementation, which we underst<strong>and</strong> as related to the business<br />
model but not as internal part of it.” Other common BC criteria that may not be considered as a part of<br />
the BM are strategic alignment, flexibility, <strong>and</strong> risk. Rather than being explicitly part of the BM, these<br />
criteria may be seen as properties of the BM as a whole, or as meta-properties of each of the BM<br />
building blocks.<br />
Table 2: BM building blocks <strong>and</strong> related IS-specific BC evaluation criteria<br />
Business Model Business Case<br />
Value Proposition A BC can be developed <strong>and</strong> maintained for each of the company’s products <strong>and</strong><br />
services. The value proposition then defines the set <strong>and</strong> scope of BCs. A BC may<br />
also be developed to change or extend the company’s value proposition. A portfolio<br />
approach may be used to help management evaluate the relative importance of BCs<br />
(J. M. Ward 1990). Examples of related IS evaluation criteria are:<br />
‘Improved product quality’ (Irani 2002)<br />
‘Provides better products or services to customers’ (Mirani & Lederer 1998)<br />
Target Customer Provider perspective BCs describe market segments <strong>and</strong> customer needs.<br />
‘Improved market share’ (Irani 2002)<br />
‘Provides new products or services to customers’ (Mirani & Lederer 1998)<br />
Distribution Channel BCs describe means to realize the foreseen benefits. Provider perspective BCs may<br />
therefore describe distribution channels. Each channel may incur certain cost <strong>and</strong><br />
revenue streams.<br />
‘Reduced delivery lead times’, ‘Improved product traceability’ (Irani 2002)<br />
Relationship A provider perspective BC could describe this, often as part of the<br />
intangible/strategic benefits.<br />
‘Improved customer loyalty’ (T.-Y. Chou et al. 2006)<br />
‘Improves customer relations’ (Mirani & Lederer 1998)<br />
Value Configuration The BC describes activities <strong>and</strong> resources as part of the benefits realization plan.<br />
The investment in one specific activity or resource could also be the goal of the BC.<br />
BCs may be infeasible due to a lack of resources.<br />
‘Labor savings’ (Ryan & Harrison 2000)<br />
‘Reduced inventory’ (Jones & Beatty 1998)<br />
‘Enhances employee productivity or business efficiency’ (Mirani & Lederer 1998)<br />
Core Competency Responsible persons or required competencies may be described in the BC as part<br />
of the benefits realization plan.<br />
‘Whether the CEO has IT knowledge’, ‘Experience in <strong>using</strong> IS’, ‘Skill of IT staff’ (T.-Y.<br />
Chou et al. 2006)<br />
‘Probability of project completion’ (Bacon 1992; Escobar-Perez 1998)<br />
‘Leader in new technology’ (Irani 2002)<br />
‘Enables focus on core in-house operations’ (Mcauley et al. 2002)<br />
Partner Network May be described as part of the realization plan. Can be described for the<br />
make/buy/partner decision.<br />
‘Ally with partner’, ‘Improved trading partner relations’ (T.-Y. Chou et al. 2006)<br />
‘Helps establish useful linkages with other organizations’ (Mirani & Lederer 1998)<br />
Cost Structure A BC contains a cost structure or ‘cash flow analysis’. The cost structure in the BM<br />
may define upper <strong>and</strong> lower bounds for the cash flow analysis in the BC. The cost<br />
structure may get less attention when it is already certain that the investment needs<br />
to be made (Joshi & Pant 2008).<br />
‘Hardware cost’, ‘Software cost’, ‘Implementation cost’, ‘Maintenance cost’,<br />
‘Consultant cost’, ‘Reduced inventory’ (T.-Y. Chou et al. 2006)<br />
‘Save money by reducing…’ (Mirani & Lederer 1998)<br />
Revenue Model A cash flow analysis is part of a provider perspective BC. The BM may set<br />
benchmarks for BCs, e.g., the minimum level of ROI (Return on Investment).<br />
‘Improved cash flow’ (Jones & Beatty 1998)<br />
‘Net present value’ (Bacon 1992; Escobar-Perez 1998)<br />
‘Internal rate of return’ (Bacon 1992; Escobar-Perez 1998)<br />
3.2 Business models affecting business cases<br />
The similarities between BM <strong>and</strong> BC constitute a static view on the relation between the two concepts.<br />
This static view can be extended with a dynamic view, by analyzing the influence of a change in the<br />
BM on BCs <strong>and</strong> vice versa. Assuming that an M&A usually affects many or all properties of a BM, the<br />
challenge is to identify how these changes impact the various BCs of the participating companies.<br />
Though the impact heavily depends on the nature <strong>and</strong> purpose of each BC, Table 3 presents a<br />
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fictional example of change of each BM building block, as well as the associated impacts on the BCs.<br />
To ease the underst<strong>and</strong>ing of the relations, they are discussed for each BM building block, every time<br />
assuming a change of that building block only while keeping all other building blocks fixed (ceteris<br />
paribus). The examples apply to fictional companies A <strong>and</strong> B, which are merged into company C,<br />
thereby also merging their BMs. Thus, the properties of company C’s BM building blocks have<br />
transformed compared to the previous BM building blocks of company A <strong>and</strong> B.<br />
Table 3: Examples of BM change affecting BCs<br />
Business Model Building Block<br />
Potential impacts on business cases<br />
(Examples for Change)<br />
Value Proposition: Company A has a<br />
BC for the development of a new<br />
product, which is already part of<br />
company B’s portfolio. Thus,<br />
company C’s product portfolio<br />
contains a redundant product.<br />
Target Customer: Company A has a<br />
BC for a product that is supposed to<br />
address a customer segment which<br />
so far has only been focused on by<br />
company B. Company C can exploit<br />
this customer segment with products<br />
from both former companies.<br />
Distribution Channel: Company A<br />
has a distribution channel that B<br />
does not yet have, but it makes<br />
sense to use it for a specific product.<br />
In company C, A’s distribution<br />
channel can also be used for B’s<br />
products.<br />
Relationship: Company A has a BC<br />
for a product that customers are not<br />
loyal to. In company C, B’s strong<br />
br<strong>and</strong>ing, relationship strategy, <strong>and</strong><br />
customer loyalty can be applied to<br />
company A’s product.<br />
Value Configuration: Company A has<br />
a BC for product development.<br />
Company B has resources which<br />
could be used for that development.<br />
In company C those resources can<br />
be used.<br />
Core Competency: Company A <strong>and</strong><br />
company B have different core<br />
competencies. In company C B’s<br />
core competencies may be applied<br />
to company A’s BCs, if applicable.<br />
Partner Network: Company A has a<br />
BC for a product that doesn’t reflect<br />
company B’s partner network. In<br />
company C, B’s partner network can<br />
be used for company A’s product.<br />
Cost Structure: Company A has a<br />
BC for a product that is based on offshoring.<br />
In company C the strategy<br />
is changed from off-shoring to nearshoring.<br />
The associated cost model<br />
in company C is hence different.<br />
Revenue Model: Company A has a<br />
BC for a product that is based on<br />
upfront license fees. In company C<br />
the revenue model is changed from<br />
license fees to ‘pay per usage’.<br />
Benefits: Decrease if one product attracts the revenues of the other<br />
one (cannibalization effects).<br />
Costs: Decrease due to company B’s experience in this area (e.g.,<br />
some mistakes in development can be avoided).<br />
Benefits: Increase due to additional target customers for company A.<br />
Costs: Decrease due to existing target customer awareness of<br />
company B (e.g., investments in promotion for this target group can<br />
be shared by the different products).<br />
Benefits: Increase due to additional distribution channels available for<br />
company B.<br />
Costs: Increase due to additional costs for the usage of the additional<br />
distribution channel (e.g., logistics costs).<br />
Benefits: Increase of company A’s sales as customer loyalty rises<br />
with the help of company B.<br />
Costs: Increase as company A needs to implement B’s strategy. For<br />
instance, they might spend additional time with customers to build<br />
trust.<br />
Benefits: Increase of company A’s product development efficiency as<br />
capabilities of company B’s resources can be used.<br />
Costs: Increase due to costs for additional resources (e.g., more<br />
alignments needed with all stakeholders).<br />
Benefits: Increase of company A’s BCs due to positive impact of<br />
additional core competencies.<br />
Costs: Increase as firm A’s employees need to be trained in B’s core<br />
competencies.<br />
Benefits: Increase of company A’s BC due to strengths of company<br />
B’s partner network.<br />
Costs: Increase due to costs for interacting with more partners (e.g.,<br />
communication efforts).<br />
Benefits: n/a<br />
Costs: Change due to changing cost structures (e.g., changes in the<br />
wage level <strong>and</strong> the exchange rates will impact the cost structure of<br />
the BC).<br />
Benefits: Change in cash flows due to changing revenue structures<br />
(e.g., switch from license-based payment to pay per usage results in<br />
short-term revenue losses <strong>and</strong> contributes to more regular cash flows<br />
in the long-run).<br />
Costs: n/a<br />
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3.3 Business cases affecting business models<br />
Similar to a BM change affecting BCs, BCs may affect the BM. There are at least two ways in which<br />
this is possible. First, the analysis of existing BCs can provide insight in the better performing parts of<br />
the business. When merging two companies, the goal is to combine the best of both businesses, but<br />
potential synergies are hard to predict <strong>and</strong> achieve. However, BCs can be used as a basis for synergy<br />
analysis on a more operational level. By comparing BCs from both companies, benchmarks <strong>and</strong><br />
performance rankings can be derived. Based on those rankings, further analyses can be started.<br />
While the well performing BCs can identify best practices, the lesser ones can identify those practices<br />
that should not be continued. The conclusions from the BC analyses may then trigger an adaptation<br />
of the BM.<br />
The second type of effect of BCs on a BM occurs when <strong>using</strong> BCs to simulate the effects of a certain<br />
BM before the BM is implemented in the organization. As Osterwalder et al. (2005) put it: “Simulating<br />
<strong>and</strong> testing business models is a manager’s dream.” For example, in the post-M&A phase the<br />
resulting BM is usually subject to analyses <strong>and</strong> discussions. Often some alternatives are proposed<br />
<strong>and</strong> a decision needs to be made. E.g., if redundant products exist in terms of the BM value<br />
configuration, a decision needs to be made if one product should be dropped for the sake of the other<br />
or if both products will remain in the portfolio. For example, in PeopleSoft’s takeover by Oracle, the<br />
redundant PeopleSoft products remained in the portfolio (Buxmann et al. 2008). Table 4 presents<br />
some exemplary conclusions that may be derived from BC analysis <strong>and</strong> may trigger BM adaptation.<br />
Table 4: Examples of BC analysis affecting the BM<br />
Business Model Building<br />
Blocks<br />
Exemplary conclusions due to BC analysis<br />
Value Proposition A certain product area offers high ROIs.<br />
Target Customer A particular target customer segment creates strong revenues.<br />
Distribution Channel Some distribution channels are more efficient, i.e. create the same revenue with<br />
less costs.<br />
Relationship A particular way how to deal with customers is superior to others.<br />
Value Configuration Certain activities <strong>and</strong> resources outperform other ones in the internal value<br />
chain.<br />
Core Competency A specific competency of involved colleagues (such as very intensive<br />
relationship to the customers) drives performance.<br />
Partner Network One dedicated partnership supports a strong performance of a BC.<br />
Cost Structure Offshoring parts of product development increases overall costs.<br />
Revenue Model Pay-per-use contracts yield better returns on the long run than initial licensebased<br />
fees.<br />
4. Conclusions <strong>and</strong> outlook<br />
The agility of companies can be increased when implementing merged or changed business models<br />
in the organization <strong>and</strong> when <strong>using</strong> business cases to determine if it is time to change the business<br />
model. This study clarifies the relation between business models, as an implementation of a<br />
company’s strategy, <strong>and</strong> business cases, as an abstraction of a company’s operations. The relations<br />
are analyzed from a static as well as a dynamic point of view by means of inductive reasoning <strong>and</strong><br />
literature review. The main contribution of this paper is the relation of two common concepts, which<br />
are often implicitly used <strong>and</strong> related in practice, but which’ relations had not been described explicitly<br />
in literature. Some implications can be found in Table 5. Future work should test the validity of the<br />
proposed relations in practice, e.g., in specific industries <strong>and</strong> in the context of different influencing<br />
factors such as M&A. Moreover, it should be investigated how managers can implement a continuous<br />
BM-BC alignment process in their companies <strong>and</strong> how software tools can be designed to support this<br />
process (Figure 1).<br />
Table 5: Possible actions after a BM or BC change<br />
High<br />
performance<br />
Low<br />
performance<br />
Good alignment Bad alignment<br />
Keep/exp<strong>and</strong> BC After BM change: will performance remain?<br />
After BC change: redesign BM to focus on this<br />
area?<br />
Can we improve the performance of the Stop projects associated with BC<br />
BC?<br />
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Bart-Jan van Putten <strong>and</strong> Markus Schief<br />
Figure 1: Approach for the alignment of BM <strong>and</strong> BCs<br />
Acknowledgements<br />
The work presented in this paper was performed in the context of the SemProM project<br />
(www.semprom.org, contract 01IA08002) <strong>and</strong> the Software-Cluster project SWINNG (www.softwarecluster.org,<br />
contract 01|C10S05), both funded by the German Ministry for Education <strong>and</strong> Research<br />
(BMBF).<br />
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Evaluation of Error <strong>Management</strong> in Health <strong>Information</strong><br />
Systems: A Review<br />
Mohamad Norzamani Sahroni 1, 2 <strong>and</strong> Maryati Mohd Yusof 1<br />
1<br />
National University of Malaysia (Universiti Kebangsaan Malaysia), Bangi,<br />
Malaysia<br />
2<br />
Universiti Teknologi MARA, Shah Alam, Malaysia<br />
zamani@tmsk.uitm.edu.my<br />
mmy@ftsm.ukm.my<br />
Abstract: In a complex environment such as health care, the occurrence of error is inevitable but it is preventable<br />
with early pre-emptive action. This paper discusses the evaluation of errors related to pre <strong>and</strong> post Health<br />
<strong>Information</strong> Systems (HIS) adoption in health care. Various studies in medical informatics show concern on errors<br />
in health care delivery <strong>and</strong> advocate the use of HIS as a means to reduce the error. In general, the evaluation of<br />
medical error in health care can be viewed from two states of circumstances. The first state is related to error that<br />
occurs prior to HIS adoption <strong>and</strong> the second state corresponds to error identified after HIS implementation.<br />
However, the extent of error reduction that can be associated to HIS implementation is subtle. Instead, the use of<br />
HIS has unintended consequences that fosters new error. Thus, it is important to evaluate how HIS outcome<br />
reduced existing error or nurtures new one in clinical process. With regards to the outcome, this research also to<br />
seek identify factor that contributes to medical error. Overall, literature in medical error highlight human as the<br />
major contributing factor to error, apart from technological <strong>and</strong> organizational factors. However, individual is just a<br />
part of a multifaceted health care environment; therefore, it is relevant to investigate other factors that relate or<br />
cause the human error, such as the complexity of organizational process. We also aim to identify potential<br />
intervention that can prevent error from re-occurring. Currently, there are a number of guidelines <strong>and</strong> frameworks<br />
that focus on medical error. Each of these frameworks has its own strength <strong>and</strong> limitation according to its context<br />
towards patient safety. Therefore, our research aims to propose a comprehensive framework on error<br />
management in HIS that could inform decision making to assess <strong>and</strong> mitigate errors prior <strong>and</strong> subsequent to HIS<br />
implementation.<br />
Keywords: evaluation, error, health information systems, review<br />
1. Introduction<br />
Studies in medical informatics show concern on errors in health care delivery. Medical error in our<br />
research context is referred to as “an injury caused by medical management rather than the<br />
underlying condition of patient’ which is contributed to big proportion of adverse event in health care<br />
(Kohn et al. 2000). Therefore, Health <strong>Information</strong> Systems (HIS) is advocated to reduce medical error<br />
as well as to provide better decision making for patient safety <strong>and</strong> cost effective measures. However,<br />
the recent study by (Liu et al. 2011) described that the adoption of HIS remains comparatively slow<br />
due to usability <strong>and</strong> cultural barriers. Earlier, Zapf (1992) usability as type of error associates with<br />
computers <strong>and</strong> particularly with HIS (Borycki <strong>and</strong> Kushniruk 2005). It shows that while HIS aims to<br />
reduce medical error, it also nurtures new one. The occurrence of error shows that patient health<br />
might be threatened by the failure of health care systems <strong>and</strong> to certain extent it can be fatal (Han et<br />
al. 2005).<br />
Error occurred in complex environment such as health care is inevitable. However, error is<br />
preventable if early pre-emptive action is deployed. The following section discusses the occurrence of<br />
error in HIS. Section 3 reviews <strong>and</strong> highlights issues associated to error in HIS. Finally, a conclusion<br />
<strong>and</strong> future work discussed in section 4 on proposing error management model in HIS.<br />
2. Medical error in HIS<br />
Error in health care can be viewed from two states of circumstances; before <strong>and</strong> after HIS adoption.<br />
Prior HIS adoption, the former error occurred in numerous occasions are; during diagnosis due to<br />
incomplete patient history, in prescription such as miscalculation of drug dosage <strong>and</strong> frequency, <strong>and</strong><br />
in transcribing doctor’s h<strong>and</strong>written prescriptions that lead to dispensing wrong drugs to the patient.<br />
Errors occurred in these medical processes can be reduced by implementing HIS such as Computer<br />
Provider Order Entry (CPOE) (Kohn et al. 2000) for better decision making <strong>and</strong> patient safety.<br />
The latter outcome of HIS associated with error after its adoption can be viewed from two<br />
perspectives; the success of HIS in reducing error <strong>and</strong> generating new error subsequent to its<br />
adoption as discusses in section 2.1.1 <strong>and</strong> 2.1.2.
Mohamad Norzamani Sahroni <strong>and</strong> Maryati Mohd Yusof<br />
2.1.1 Error reduced by HIS<br />
There were number of quantitative studies that described the realization of HIS in reducing errors.<br />
Anderson (1997) from his simulation found that number of adverse drug event <strong>and</strong> length of hospital<br />
stay reduced up to 25 percent <strong>using</strong> Clinical <strong>Information</strong> Systems (CIS) compared to manual systems.<br />
Meanwhile Bates et al. (1998), from their before-<strong>and</strong>-after comparison study proved that more than 50<br />
percent error reduction in all medication processes after the introduction of Computerized Physician<br />
Order Entry (CPOE) in actual setting of two large tertiary hospitals. A number of other studies also<br />
establish the success of HIS in reducing medical errors such (Larum et al. 2001, Hersh 2002, Chung<br />
et al. 2003, Dobson 2003, Potts et al. 2004, Kenagy 2007, Van Doormaal et al. 2009, Poon et al.<br />
2010). A systematic reviewed paper by Kaushal et al. (2003) <strong>and</strong> quasi experimental studied by Poon<br />
(2010) best concluded that the use of HIS significantly reduce medical error rates if not to eliminate all<br />
(Dror 2010).<br />
2.1.2 Error nurtured by HIS<br />
Whilst HIS is a tool to increase patient safety <strong>and</strong> to reduce medical error in healthcare, other studies<br />
revealed undesirable outcome following to HIS adoption. It is due to reason that HIS will consistently<br />
introduce new mistakes <strong>and</strong> new harm every time its adapt with new workflow <strong>and</strong> environment<br />
because of a new or enhanced system took place (Ash et al. 2004, Campbell et al. 2006). Various<br />
studies have been reported that HIS produce unintended adverse consequences (Bell et al. 2004,<br />
Ash et al. 2009, Patel <strong>and</strong> Kane-Gill 2010) after its adoption. Ash et al. (2004) in their qualitative study<br />
found that the implementation of a Patient Care <strong>Information</strong> Systems (PCIS) could actually trigger<br />
new errors that emerge from the process of entering <strong>and</strong> retrieving information, <strong>and</strong> those in the<br />
communication <strong>and</strong> coordination process. Later Ash et al. (2007) <strong>and</strong> (2009) in their mixed method<br />
study, categorized new kind of errors such as juxtaposition errors as one of the eight <strong>and</strong> the nine<br />
types of undesirable consequences. Campbell (2006) also reported the same finding of this<br />
undesirable outcome in HIS. Zhang (2004) <strong>and</strong> Sun et al. (2008) theoretically proposed different<br />
cognitive errors on individuals interactions with HIS. Borycki <strong>and</strong> Kushniruk (2005) through their<br />
simulation discovered more medical errors related to usability problem. Meanwhile, Ammenwerth <strong>and</strong><br />
Shaw (2005) provide a list of typical systems error emerge in HIS such as functional error <strong>and</strong><br />
systems crash that affect the health care processes <strong>and</strong> harm patient. Further, Koppel (2008) added<br />
various possible errors such as wrong medication <strong>and</strong> dose could emerge from the implementation of<br />
Barcoded Medication Administration (BCMA) systems. These scenario gives impression that “errors<br />
can be prevented by designing systems that make it hard for people to do the wrong thing <strong>and</strong> easy<br />
for people to do the right thing” (Kohn et al. 2000) is still questionable.<br />
2.2 The need of evaluation<br />
The evidences of error are symptoms of flawed systems (Newton et al. 2010) <strong>and</strong> that is inadequate<br />
fit the to multifaceted health care processes (Hübner-Bloder <strong>and</strong> Ammenwerth 2009, Ammenwerth et<br />
al. 2010a). Garfield (2009) <strong>and</strong> (Vozikis 2009) explained that many related studies were carried out in<br />
individual medication stages rather than the whole medication process that lead to difficulties to<br />
identify the cause of error occurrence <strong>and</strong> its impact on another medication stages. As an example,<br />
error in dispensing stage could be avoided if error in prescribing stage first identified (Valentin et al.<br />
2009, Van Doormaal et al. 2009). However, study by Garfield et al. (2009) has its limitation which lack<br />
to provide the dearth of medication process that teething problem to recognize the root cause of error.<br />
Thus evaluation in health care cannot be performed from a single <strong>and</strong> linear perspective rather need<br />
thorough analysis because of its complexity (Patel <strong>and</strong> Kane-Gill 2010).<br />
3. Highlight of issues<br />
Based on research background in section 2, this study is intended to highlight three issues related to<br />
error in HIS that further elaborates in the following sub-sections.<br />
3.1 The extent of HIS reduces <strong>and</strong> nurtures error<br />
Despite the latter success of HIS in reducing medical error (Poon et al. 2010), the claim is subtle<br />
(Anderson 1997, Kenagy 2007) <strong>and</strong> has not been demonstrated clearly (Koppel et al. 2005, Koppel et<br />
al. 2008, Ammenwerth et al. 2010b) especially related on the use of common terminology <strong>and</strong><br />
reporting such as type of error that cannot be resolved even after HIS implementation. Study by<br />
Koppel et al. (2005) is the example of work that reports explicitly on type of error occurred but limited<br />
to error on medication process as most other studies reported. The ambiguity of medical error may be
Mohamad Norzamani Sahroni <strong>and</strong> Maryati Mohd Yusof<br />
attributed to lack of underst<strong>and</strong>ing of the evaluation process (Tuten 2009) on the overall medical error<br />
management (Donabedian <strong>and</strong> Bashshur 2003, Hakimzada et al. 2008, Patel <strong>and</strong> Kane-Gill 2010). It<br />
also includes lack of the definition <strong>and</strong> the classification on type of error occurred (Zapf et al. 1992,<br />
Vozikis 2009, Habraken <strong>and</strong> Van Der Schaaf 2010) <strong>and</strong> limited error identification (Esimai 2005,<br />
Koppel et al. 2008, Garfield et al. 2009) of medical processes. Furthermore, it may also contribute to<br />
the difficulty to perform evaluation process (Mohd Yusof 2007) due to the complexity of medical<br />
process (Hübner-Bloder <strong>and</strong> Ammenwerth 2009). So, evaluation of medical error should be allencompassing<br />
in its specific setting if not entirely in the whole complex health care systems in order to<br />
get holistic underst<strong>and</strong>ing on the occurrence of error, <strong>and</strong> how well HIS is integrated <strong>and</strong> supported<br />
medical processes (Garcia-Smith 2007, Hübner-Bloder <strong>and</strong> Ammenwerth 2009). Thus, with a clear<br />
definition <strong>and</strong> classification type of error in HIS, it is expected to underst<strong>and</strong> the extent of HIS<br />
outcome in reducing error as well as nurturing new error in medical process.<br />
3.1.1 Definition of error<br />
Various definitions of error have been applied towards patient safety but there was lack of st<strong>and</strong>ard<br />
definitions <strong>and</strong> taxonomy of medical errors (Vozikis 2009) especially to have a definition of error that<br />
associates with HIS. This situation bring more issues to this area of study that lead to unclear <strong>and</strong><br />
uniform of medical error reporting. Error in general is defined as “failure of planned actions to achieve<br />
their desired goal” (Reason 1995). Cosby (2003) defines error as “a failure to meet some realistic<br />
expectation (an action, process, diagnosis, or endpoint. Therefore, this research context will define<br />
error in HIS is referred to the failure of HIS to attain its desired goal in reducing error <strong>and</strong>/or<br />
preventing new error to occur in medical process because of following wrong or incomplete planned<br />
action or deviating from its original planned action. Failure in the given definition is referring to the<br />
partial failure of HIS instead of total failure where there might be certain goal is not attained or HIS is<br />
produced undesirable outcome (Heeks 2006) such as new error.<br />
3.1.2 Type of error<br />
Literature shows that there are lacks of uniform classification on type of medical error (Vozikis 2009).<br />
This may be resulting of unclear type of error reduces or nurtures in HIS. Table 1 summarizes<br />
different classification on type of medical error.<br />
According to Leape (1993), type of medical error can be viewed from four types of diagnostic,<br />
treatment, preventive <strong>and</strong> other types. This kind of classification is based on general medical<br />
management process where the sub type of error might be changed according to setting <strong>and</strong> context.<br />
Whilst (Koppel et al. 2005) used themes to describe its two types of error; information error <strong>and</strong> HIS<br />
interface flaws. Koppel et al. study is based on the identified 22 previously unexplored medicationerror<br />
in CPOE.<br />
Meanwhile Reason’s (1995) Theory of Human Error proposed that medical error is divided into two<br />
types; slips <strong>and</strong> laps, <strong>and</strong> mistakes. Slips <strong>and</strong> lapse means the failure of the execution of planned<br />
action <strong>and</strong> mistake is the failure of the plan of intended goal even though the execution is faultless.<br />
Besides, Zhang et al. (2004) also proposed two major type cognitive taxonomy of medical error due to<br />
human factor associates with technology; mistakes <strong>and</strong> slips. Mistake is an error occurs because of<br />
the person has incorrect or incomplete knowledge to perform certain task. Meanwhile if error occurs<br />
with the person has correct knowledge to perform certain task, it was a slip. Each type then is divided<br />
into execution <strong>and</strong> evaluation where evaluation is the result of the action of executions. These types<br />
are based on the combination theories of Human Error <strong>and</strong> Norman’s Human Action. Further both<br />
Reason (1995) <strong>and</strong> Zhang et al. (2004) discussed important aspect of human error as well as<br />
contributing factor to human error. Both Reason’s (1995) <strong>and</strong> Zhang et al. (2004) classification looking<br />
consistent to be applied in different setting <strong>and</strong> context of evaluation in health care. In addition, both<br />
studies also highlighted factors associated to the occurrences of medical error. However, the limitation<br />
lingers on the cognitive of human factors.<br />
However, the classification type of error provided by Zapf et al. (1992) is much easier to apply. Zapf et<br />
al. identified functionality to represent technical error, usability to represent human error that<br />
associates with systems, interaction to represent individual communication <strong>and</strong> organization process,<br />
<strong>and</strong> inefficiency that also due to human factor because of lack of knowledge to perform optimal action<br />
path or due to habit. These types of error represent comprehensive approach to evaluation.
Table 1: Type of medical error<br />
Mohamad Norzamani Sahroni <strong>and</strong> Maryati Mohd Yusof<br />
Source Type Sub-Type / (Number of Subtype)<br />
(Zhang et al. 2004) Slips<br />
Mistakes<br />
(Reason 1995) Slips <strong>and</strong> Lapse<br />
Mistakes<br />
(Leape et al. 1993) Diagnostic<br />
Treatment<br />
Preventive<br />
Other<br />
(Koppel et al. 2005) <strong>Information</strong> Error<br />
HIS interface flaws<br />
(Zapf et al. 1992) Functionality<br />
Usability<br />
Inefficiency<br />
Interaction<br />
3.2 Contributing factor to medical error<br />
Execution slip<br />
Evaluation slip<br />
Execution mistake<br />
Evaluation mistake<br />
Recognition failures<br />
Attention failures<br />
Memory failures<br />
Selection failures<br />
(four)<br />
(five)<br />
(two)<br />
(two)<br />
(twelve)<br />
(en)<br />
(four)<br />
(four)<br />
(two)<br />
(one)<br />
The finding from the first issue will lead us seek to identify factors that cause error in HIS.<br />
Researchers (Zhang et al. 2004, Aarts et al. 2007, Borycki et al. 2009b) have commonly agreed that<br />
humans are the cause of errors in the medical field either before or after HIS adoption. However, the<br />
blame entirely on the individual is not acceptable because they are just a part of a multifaceted health<br />
care environment that might be another factor that root ca<strong>using</strong> to human error such as the complexity<br />
of organizational process (Woods <strong>and</strong> Cook 2004, Aarts et al. 2007) <strong>and</strong> the technological failure<br />
(Ammenwerth <strong>and</strong> Shaw 2005, Borycki et al. 2010). This claim is in line with George et al. (2004)<br />
where the organization <strong>and</strong> its processes are most attributable to 90 percent of errors or defects<br />
related to quality of products (HIS) or services rather than looking into human factors per se. Hence, it<br />
is necessary to underst<strong>and</strong> <strong>and</strong> identify the source of error by assessing the entire specific<br />
organizational process as well as to identify potential solution to reduce medical error in HIS (Cosby<br />
2003, Borycki et al. 2009b). Currently there is a model known as Eindhoven Classification Model<br />
(ECM) that has been applied by some studies (Kaplan et al. 1998, Habraken <strong>and</strong> Van Der Schaaf<br />
2010) that described factors related to error; human, organizational <strong>and</strong> technical. However the<br />
studies are not specifically directed to HIS. By identifying factors that contribute to medical error, it is<br />
expected to gain optimal HIS implementation in health care (Poon et al. 2010) by preventing error or<br />
new one to occur. Thus it is important to identify factors that contribute to medical error in HIS before<br />
necessary prevention strategy is applied.<br />
3.3 Framework to evaluate medical error<br />
Currently there are guidelines <strong>and</strong> frameworks developed applicable to medical error. Table 2<br />
represents frameworks with its own strength <strong>and</strong> benefit according to its context. Some guidelines are<br />
suitable to perform after an error occurred but are not adequate enough to take advanced precaution<br />
in preventing error to occur as suggested by (Reason 2000, Borycki et al. 2009a). Even though the<br />
other framework provides error detection, it also has a drawback which is limited to human <strong>and</strong><br />
workflow factors. The immediate framework related to medical error in HIS also has limitation where<br />
they focus on organizational view rather than operational in health care setting. Therefore with the<br />
varieties of strength <strong>and</strong> limitation in presented guidelines <strong>and</strong> frameworks, our research is to propose<br />
a comprehensive framework on error management in HIS that could inform decision making to assess<br />
errors prior <strong>and</strong> subsequent to HIS adoption for finest HIS implementation. Thus, it is important to<br />
have effective evaluation method that assists decision making to prevent medical error.
Table 2: Framework on medical error<br />
Mohamad Norzamani Sahroni <strong>and</strong> Maryati Mohd Yusof<br />
Framework/Source Objective Advantage/Feature Limitation<br />
National Coordinating<br />
Council on Medication<br />
Error Reporting <strong>and</strong><br />
Prevention<br />
(NCC-MERP<br />
1998,2011)<br />
Joint Commission<br />
International (JCI<br />
2011) (Chang et al.<br />
2005)<br />
International<br />
Classification for<br />
Patient Safety<br />
(TWAFPSDG et al.<br />
2009)<br />
Framework for<br />
Diagnosing<br />
Technology-Induced<br />
Errors<br />
(Borycki et al. 2009)<br />
Provides st<strong>and</strong>ard<br />
language <strong>and</strong> item of<br />
error reporting<br />
Presents goal of patient<br />
safety with general<br />
guidelines for all medical<br />
process<br />
Develops uniform<br />
classification of patient<br />
safety<br />
Identify systemic factors<br />
of error<br />
4. Conclusion <strong>and</strong> discussion on future work<br />
All health care<br />
organization use common<br />
format of error reporting<br />
Health care organization<br />
could take necessary<br />
action <strong>using</strong> provided<br />
guideline to avoid the<br />
occurrence of error<br />
Comprehensive guideline<br />
from error detection to<br />
error mitigation<br />
Conceptual framework<br />
that enable to identify<br />
systemic measures<br />
The checklist was<br />
designed purposely for<br />
medication error<br />
It is difficult to provide<br />
advance precaution<br />
action towards error to re<br />
occur<br />
Not specific to HIS<br />
General guideline without<br />
specific steps to<br />
implement.<br />
Not specific to HIS<br />
A conceptual framework<br />
without specific steps to<br />
implement.<br />
Limited to human <strong>and</strong><br />
workflow factors<br />
Not specific to HIS<br />
Focus on organizational<br />
view rather than<br />
operational in health care<br />
setting<br />
This paper has highlighted three issues related to error in HIS; the extent of HIS outcome in reducing<br />
<strong>and</strong> nurturing error, contributing factors to error <strong>and</strong> the limitation of existing framework on error<br />
management. In addition, the classification type of error is also other important issues that have been<br />
raised to specifically highlight error in HIS. These issues are the chains of initial problems to be solved<br />
before a comprehensive model of error management could be proposed.<br />
Our next step is to justify several approaches to model development. Project management<br />
methodology can be considered since the success of HIS adoption relies heavily on how well health<br />
care organization manages HIS project. Some project management features can be associated with<br />
the blunt error of HIS (Reason 1990, Borycki et al. 2009b). Moreover, risk management that has been<br />
applied in project management promised more predictive <strong>and</strong> preventing measures of error to occur in<br />
HIS in providing clear steps for error identification prior to HIS implementation (Reason 2000, Sun et<br />
al. 2008, Borycki et al. 2009a). A number of studies also advocated the application of risk<br />
management as a method on error management in HIS (Koppel et al. 2005, Hales <strong>and</strong> Pronovost<br />
2006, Heeks 2006, Aarts et al. 2007, Borycki et al. 2009a).The proposed model of error management<br />
could provide information on potential error occurrence <strong>and</strong> respective action.<br />
We will employ subjectivist or qualitative method to evaluation; case study will be carried out as a<br />
method to test the propose error management model. Prior to that, expert review will be applied to get<br />
an agreement on certain issues be conducted in order to identify factors contribute to medical error in<br />
HIS in retrospective study.<br />
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Koppel, R., Metlay, J. P., Cohen, A. & al., e. (2005) "Role of Computerized Physician Order Entry Systems in<br />
Facilitating Medication Errors", JAMA, 293.
Mohamad Norzamani Sahroni <strong>and</strong> Maryati Mohd Yusof<br />
Koppel, R., Wetterneck, T., Telles, J. L. & Karsh, B.-T. (2008) "Workarounds to Barcode Medication<br />
Administration Systems: Their Occurrences, Causes, <strong>and</strong> Threats to Patient Safety", Journal of the<br />
American Medical Informatics Association, 15, 408-423.<br />
Larum, H., Ellingsen, G. & Faxvaag, A. (2001) "Doctors' use of electronic medical records systems in hospitals:<br />
cross sectional survey", British Medical Journal, 323, 1344.<br />
Leape, L., Lawthers, A., Brennan, T. & Johnson, W. (1993) "Preventing medical injury", QRB. Quality review<br />
bulletin, 19, 144.<br />
Liu, L. S., Shih, P. C. & Hayes, G. R. (2011) Barriers to the adoption <strong>and</strong> use of personal health record systems.<br />
Proceedings of the 2011 iConference. Seattle, Washington: ACM.<br />
Mohd Yusof, M. (2007) The Evaluation of Health <strong>Information</strong> Systems Adoption in Clinical Practices. PhD, Brunel<br />
University.<br />
Newton, R. C., Mytton, O. T., Aggarwal, R., Runciman, W. B., Free, M., Fahlgren, B., Akiyama, M., Farlow, B.,<br />
Yaron, S., Locke, G. & Whittaker, S. (2010) "Making existing technology safer in healthcare", Quality <strong>and</strong><br />
safety in health care, 19, i15-i24.<br />
Patel, G. & Kane-Gill, S. (2010) "Medication Error Analysis: A Systematic Approach", Current drug safety, 5, 2-5.<br />
Poon, E. G., Keohane, C. A., Yoon, C. S., Ditmore, M., Bane, A., Levtzion-Korach, O., Moniz, T., Rothschild, J.<br />
M., Kachalia, A. B., Hayes, J., Churchill, W. W., Lipsitz, S., Whittemore, A. D., Bates, D. W. & G<strong>and</strong>hi, T. K.<br />
(2010) "Effect of Bar-Code Technology on the Safety of Medication Administration", New Engl<strong>and</strong> Journal of<br />
Medicine, 362, 1698-1707.<br />
Potts, A., Barr, F., Gregory, D., Wright, L. & Patel, N. (2004) "Computerized physician order entry <strong>and</strong> medication<br />
errors in a pediatric critical care unit", Pediatrics, 113, 59.<br />
Reason, J. (1995) "Underst<strong>and</strong>ing adverse events: human factors", British Medical Journal, 4, 80.<br />
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research ed.), 338.<br />
Van Doormaal, J. E., Van Den Bemt, P. M. L. A., Mol, P. G. M., Zaal, R. J., Egberts, A. C. G., Haaijer-Ruskamp,<br />
F. M. & Kosterink, J. G. W. (2009) "Medication errors: The impact of prescribing <strong>and</strong> transcribing errors on<br />
preventable harm in hospitalised patients", Quality <strong>and</strong> safety in health care, 18, 22-27.<br />
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Journal of <strong>Information</strong> <strong>Management</strong>, 29, 15-26.<br />
Woods, D. & Cook, R. (2004) The new look at error, safety, <strong>and</strong> failure: a primer. Technical Report, US Veterans<br />
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first validation of a taxonomy for observed errors in a field setting", International Journal of Human<br />
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of Biomedical Informatics, 37, 193-204.
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Academic<br />
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578
<strong>Management</strong> of Waiting List for Surgery <strong>Information</strong><br />
System<br />
Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
ACSS – Unidade Central de Gestão de Inscritos para Cirurgia, Lisboa, Portugal<br />
rcristovao@acss.min-saude.pt<br />
pagomes@acss.min-saude.pt<br />
Abstract: SIGIC – Integrated <strong>Management</strong> System of the Waiting List for Surgery is an integrated management<br />
system which promotes the access to hospital surgical services in terms of quality, equal treatment, efficiency<br />
<strong>and</strong> effectiveness pointing to sustainability in National Healthcare System (NHS), process <strong>and</strong> patient<br />
management transparency <strong>and</strong> accountability. It was created due to the existence of a significant number of<br />
patients waiting for treatment for longer than the clinical acceptable times, with ominous consequences not only<br />
for the individuals but also for the society, which led the government to take political actions. It manages all<br />
patients of NHS <strong>and</strong> involves public <strong>and</strong> private healthcare providers of surgical treatment. In 6 years, SIGIC<br />
brought great results to the Portuguese NHS by reducing the national waiting list for surgery in 35% <strong>and</strong> the<br />
waiting time in 62%. IGLIC is the information system that supports <strong>and</strong> controls SIGIC <strong>and</strong> interacts with the<br />
different stakeholders such as public <strong>and</strong> private healthcare providers, regional healthcare administrations, the<br />
central administration of NHS, patients, medical <strong>and</strong> clinical practitioners <strong>and</strong> the government. It provides clinical<br />
<strong>and</strong> administrative information, acting in the different stages <strong>and</strong> parts of SIGIC management process. SIGLIC<br />
must give an appropriate answer to each stakeholder according to their specific functions <strong>and</strong> needs in the NHS,<br />
keeping the necessary restriction to sensitive personal data of patients. For that, SIGLIC was built taking into<br />
account the real requirements of clinical activity in hospitals, based on the interactions between the institution <strong>and</strong><br />
the patient. SIGLIC reports in an innovative way the information for clinical governance, foc<strong>using</strong> on the core<br />
business of health which stems from the interaction between organizations <strong>and</strong> patients, designated by event.<br />
The result of that interaction is the identification <strong>and</strong> classification of the patient health problems approached in<br />
the event by scientific terms, as well as its corresponding actions suggested or applied by health providers,<br />
designated by nosological unit. Another key aspect in SIGLIC is the aggregation of the basic parts of the events<br />
in episodes that represent the set of involvements in the resolution of identified problems <strong>and</strong> in the context of a<br />
defined plan of care. SIGLIC must also possess solid information, related to the integrity of collected data. To<br />
enable this it was implemented a redundant system with different sources permanently checking data quality.<br />
This process is extremely important to guarantee that information in SIGLIC is reliable, in order that the right care<br />
is provided to a given patient, the hospital administration makes the right management decisions <strong>and</strong> the<br />
hospitals have the right funding from NHS, based on the correct information. <strong>Information</strong> is a valuable resource to<br />
make decisions <strong>and</strong> that’s what SIGLIC is about. With SIGLIC, the management process of the national waiting<br />
list for surgery is run with transparency to all players <strong>and</strong> users. It assures equal access <strong>and</strong> quality treatment in<br />
all NHS patients waiting for surgery <strong>and</strong> makes healthcare providers <strong>and</strong> patients responsible for their actions<br />
<strong>and</strong> duties in the process.<br />
Keywords: management, information system, surgery, waiting time, waiting list, ICD<br />
1. SIGIC – framework of SIGLIC<br />
SIGLIC is the supporting information system for SIGIC – Integrated <strong>Management</strong> System of the<br />
Waiting List for Surgery in Portugal, a system which promotes the access to surgical treatment in the<br />
following terms:<br />
Quality (st<strong>and</strong>ards <strong>and</strong> protocols for technical quality of the healthcare services);<br />
Equal treatment (maximum waiting time <strong>and</strong> schedule rules safeguarding medical priority <strong>and</strong><br />
waiting time);<br />
Efficiency <strong>and</strong> effectiveness in the search of sustainability of the National Health System (NHS);<br />
Process (guarantees of alternative choice if waiting time is 75% of the maximum waiting time<br />
established);<br />
Transparency <strong>and</strong> accountability (guarantee of information quality <strong>and</strong> user identification in all<br />
database records).<br />
SIGIC was created due to the existence of a significant number of patients waiting for treatment for<br />
longer than clinical acceptable times, with ominous consequences not only for the individuals but also<br />
for the society, which led the government to take political actions. It manages all patients of NHS<br />
searching for surgical treatment <strong>and</strong> involves all public healthcare providers with surgical services<br />
(58) <strong>and</strong> 60 private healthcare providers with conventions for surgical treatment with the NHS. The<br />
next figure shows the institutional framework of SIGIC.<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
SI<br />
GI<br />
C<br />
Figure 1: Institutional framework of SIGIC<br />
SIGIC was born in the Portuguese Ministry of Health as a project <strong>and</strong> it was implemented in all<br />
regions of the continent (autonomous regions such as Madeira <strong>and</strong> Azores are not included). After its<br />
implementation, SIGIC’s management <strong>and</strong> control was transferred to a more permanent structure in<br />
the NHS, the National Administration of NHS - ACSS. The central unit responsible to manage <strong>and</strong><br />
control SIGIC inside ACSS is UCGIC. SIGIC is a vertical system which is very close <strong>and</strong> serves<br />
directly the administration of ACSS <strong>and</strong> the Ministry of Health. The holistic perspective of healthcare<br />
is represented schematically in the following picture, locating SIGIC in its universe.<br />
Figure 2: The holistic perspective of healthcare <strong>and</strong> SIGIC<br />
580
Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
In Portugal, SIGIC covers 500 thous<strong>and</strong> surgeries per year, 4.5 million surgery appointments <strong>and</strong> a<br />
business volume on surgical services of more than 1.5 billion Euros a year. In a recent study, the<br />
UCGIC estimated that SIGIC saved 51 million Euros to NHS in 2010.<br />
SIGIC takes into account the new st<strong>and</strong>point that European health systems have to face, the<br />
economic efficiency <strong>and</strong> sustainability of NHS. Economic efficiency <strong>and</strong> sustainability presume, on<br />
one h<strong>and</strong>, to guarantee the value for money of services provided <strong>and</strong> an adequate communication to<br />
the patient so that he can perceive it clearly. And on the other h<strong>and</strong> the existence of reasonable costs<br />
affordable by the patient, as illustrated by the figure below.<br />
Figure 3: Key elements to NHS sustainability<br />
The key elements to NHS sustainability are the value for money <strong>and</strong> the cost of services provided.<br />
Cost has to translate the value of the service in a competitive market. Yet even if the client<br />
recognizes in the service provided a value appropriated to the cost, if the amount involved exceeds<br />
the economic <strong>and</strong> financial capability of the patient, the transaction will not take place. So the cost<br />
affects sustainability of NHS because, not only it cannot be too expensive, but also the value<br />
perceived by the patient of those services must be according to his contribution to NHS paid through<br />
taxes, otherwise he will search for alternative health systems which will provide him better value for<br />
money, jeopardizing the NHS.<br />
Value perceived by stakeholders (patients <strong>and</strong> citizens) is the price that they will be willing to pay for<br />
the service provided by NHS according to their expectations in terms of quality <strong>and</strong> cost, in order to<br />
guarantee its sustainability.<br />
The value of services provided results from:<br />
Access: the ability to access public healthcare by potential users. The good or service loses<br />
value when access is difficult. However in the current environment where speed is the hallmark of<br />
the modern world, the increased availability is particularly valuable. The time gained in access to<br />
health services in a very competitive society where there is cost <strong>and</strong> time restrictions, it acquires<br />
actual value;<br />
Quality of service provided – innovation together with increasing knowledge <strong>and</strong> the consequent<br />
requirements, determines the need to qualify the services, highlighting the features we want to<br />
see provided in the products <strong>and</strong> services we consume. Thus, in an environment of broad supply,<br />
the value is changed by an increasingly close correlation with the features that we determined for<br />
the products or services we intend to acquire. This quality should preferably be certified by<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
independent <strong>and</strong> competent entities to which we delegate the task of safeguarding the settlement<br />
between the products <strong>and</strong> services;<br />
Risk - increasingly important, it relates to the need to quantify <strong>and</strong> reduce the risk associated with<br />
the transaction (purchase of service or product) in clinical <strong>and</strong> administrative terms. Risk concerns<br />
the potential failure of the treatment, the likelihood of complications or squeals, failure of critical<br />
business processes, the occurrence of unanticipated <strong>and</strong> non-reported increased costs, the<br />
mismatch between expectations <strong>and</strong> results, <strong>and</strong> the occurrence of accidents, insolvency or<br />
incapability of the provider, amongst others;<br />
Reliability - the soundness of institutions <strong>and</strong> systems is a guarantee of continuity, durability,<br />
predictability <strong>and</strong> security. Solid institutions have first to be relevant to its potential clients, to<br />
ensure a team that is motivated <strong>and</strong> aligned with the mission <strong>and</strong> goals of the organization, to<br />
safeguard financial efficiency <strong>and</strong> economic sustainability, to evolve by adapting constantly to<br />
new market dem<strong>and</strong>s. Financing, regulatory, legal, information <strong>and</strong> other kind of systems have to<br />
assure consistency <strong>and</strong> be reliable over time, adapt to changing needs, be steady with the<br />
established goals, add value to the services provided either by interference in increasing quality<br />
<strong>and</strong> by action in reducing costs. People need to trust that NHS provides a service of quality <strong>and</strong><br />
will endure over time;<br />
Results – the value of services provided is measured by the treatment results, both in gains in<br />
health <strong>and</strong> in the implicit or explicit needs of the patient. The outcomes must be objective, satisfy<br />
the patient’s expectations <strong>and</strong> be according to the reference values. Only acceptable results can<br />
promote confidence in a transparent system. These results must address the different needs,<br />
expressed or implied, primarily in the extent of healthcare but also in the extents of comfort,<br />
empathy, aesthetics, availability <strong>and</strong> complementary services (administrative, hospitality,<br />
transport, among others).<br />
Value <strong>and</strong> cost of health services provided must be balanced over time <strong>and</strong> NHS needs to give that<br />
guarantee to the patients <strong>and</strong> the society in general. Time comprises the very notion of a continuity<br />
that is intended to be flexible to the changing environment, the values <strong>and</strong> desires <strong>and</strong> that is the trust<br />
keeper that any system needs to be pursued <strong>and</strong> cherished.<br />
Though directed at the side of access <strong>and</strong> knowledge, SIGIC focused on value chain associated with<br />
the services provided to patients, in search for implementation of a system that contributed decisively<br />
to the sustainability of the NHS. To this extent, SIGIC implemented a controlled competitive system<br />
with private providers based on more competitive access times <strong>and</strong> prices. It promoted internal<br />
negotiation practices in hospitals based on goal-setting <strong>and</strong> minimum levels of services provided. It<br />
promoted the attribution of individual responsibilities in a pre-established hierarchical skills<br />
organization. SIGIC also has implemented procedures for regular monitoring <strong>and</strong> reporting that attend<br />
the various steps in the patient management process. It mobilizes actively the dem<strong>and</strong> by<br />
disseminating <strong>and</strong> providing access to alternative but efficient providers, collaborates with other<br />
institutions in promoting <strong>and</strong> spreading clinical protocols <strong>and</strong> good practices implemented together<br />
with the Ministry of Health, such as the safe surgery program sponsored by the World Health<br />
Organization. SIGIC established indicators <strong>and</strong> periodic reports of compliance procedures, results on<br />
access, productivity, human <strong>and</strong> physical capacity, economic <strong>and</strong> financial indicators. It also audits<br />
regularly health providers <strong>and</strong> reports the results, compliances, constraints <strong>and</strong> recommendations to<br />
their guardianship.<br />
Figure 4 shows the circuit of the patient in SIGIC <strong>and</strong> the transfer to another hospital in order to<br />
guarantee the maximum waiting time established by clinical priority <strong>and</strong> adjusted by type of pathology.<br />
When a public hospital reveals inability to treat a patient in the maximum waiting time established by<br />
the Ministry of Health for his particular problem, SIGIC guarantees the transfer of the patient to a<br />
hospital capable of treating him within the guaranteed maximum waiting time.<br />
Figure 5 shows the evolution of the national waiting list for surgery since SIGIC was implemented in<br />
the NHS.<br />
In 5 years SIGIC reduce the waiting list for surgery by almost 35%, but it also achieved a significant<br />
decrease in waiting time to surgery of 61,6% to 3 months, which is a considerable improvement in the<br />
access to surgical treatment in the NHS. Figure 6 shows that evolution.<br />
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Figure 4: Circuit of the patient in SIGIC in the NHS<br />
Nr of surgical episodes<br />
250,000<br />
230,000<br />
210,000<br />
190,000<br />
170,000<br />
150,000<br />
Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
Evolution of national waiting list for surgery<br />
248,404<br />
221,208<br />
197,150<br />
‐ 34,9%<br />
174,179<br />
164,751 161,621<br />
2005 2006 2007 2008 2009 2010<br />
Figure 5: Evolution of national waiting list for surgery between 2005 <strong>and</strong> 2010, compared at the 31 st<br />
of December (source: SIGLIC)<br />
Median waiting time in month<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
Evolution of nacional waiting time for surgery<br />
8.6<br />
6.9<br />
4.4<br />
‐61,6%<br />
2005 2006 2007 2008<br />
3.7 3.4 3.3<br />
2009 2010<br />
Figure 6: Evolution of national waiting time for surgery in months between 2005 <strong>and</strong> 2010 (source:<br />
SIGLIC)<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
This improvement was only possible to accomplish due to increased effectiveness <strong>and</strong> efficiency in<br />
the management of patients registered for surgery enhanced by SIGIC, which has resulted in<br />
increased surgical production in NHS by almost 40% in the last 5 years, either by public or private<br />
hospitals performing surgery on the NHS through conventions, as shown by the figure below.<br />
Nr of surgical episodes<br />
510,000<br />
460,000<br />
410,000<br />
360,000<br />
310,000<br />
260,000<br />
Evolution of scheduled surgical production<br />
345,321<br />
39,8%<br />
403,061<br />
455,503<br />
475,293<br />
482,928<br />
2006 2007 2008 2009 2010<br />
Figure 7: Evolution of scheduled surgical production <strong>and</strong> its average waiting time to surgery between<br />
2006 <strong>and</strong> 2010 (source: SIGLIC)<br />
Not only the surgical production increased, but also the time patients actually wait to surgery has<br />
fallen by 32% to 2,8 months.<br />
The decrease in waiting time for surgery was achieved mostly through better management of access<br />
to surgical care provided by public entities, which was boosted by the rules <strong>and</strong> guidelines issued by<br />
SIGIC. As the figure below proves, since 2006 to 2010 the entries of new patients to the national<br />
waiting list for surgery have increased almost 33% but that didn´t stop the decrease in waiting time.<br />
Figure 8: Evolution of new entries to the national waiting list for surgery between 2006 <strong>and</strong> 2010<br />
(source: SIGLIC)<br />
The next figure shows the results in the improvement in quality of healthcare access made by SIGIC.<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
Figure 9: Evolution of the percentage of National Waiting List for Surgery with time above the<br />
established by SIGIC<br />
The weight of patients waiting to their surgery more than the established by SIGIC according to the<br />
clinical priority <strong>and</strong> type of pathology decreased by 39% in the last 5 years, which proves a boost in<br />
quality of surgical care access in Portugal.<br />
2. SIGLIC – information system<br />
SIGLIC is the information system that supports <strong>and</strong> controls SIGIC <strong>and</strong> interacts with public <strong>and</strong><br />
private healthcare providers, regional healthcare administrations <strong>and</strong> the central administration of<br />
NHS. To accomplish its purpose, SIGLIC must act in the different components of the process, such<br />
as:<br />
Registration <strong>and</strong> control of dem<strong>and</strong> for surgical procedures;<br />
Referral networks <strong>and</strong> management of communications network;<br />
Registration of patients interactions with the healthcare providers;<br />
Portfolio of surgical services <strong>and</strong> physical <strong>and</strong> human resources;<br />
Professionals, their accreditations <strong>and</strong> allocation to services;<br />
Registration of the services provided <strong>and</strong> production (supply);<br />
Obtained results (in services provided according to the procedures, in gains in health <strong>and</strong> in<br />
perception of added value in health quality for the patient); <strong>and</strong>,<br />
Funding <strong>and</strong> billing of the entire process.<br />
Each component of the process involves different players: the patient defines the dem<strong>and</strong> <strong>and</strong> is both<br />
client <strong>and</strong> object of change of required services; the medical professionals provide the services<br />
required; the hospitals provide the resources <strong>and</strong> logistics; the government which finances the public<br />
health system (NHS) <strong>and</strong> is both shareholder <strong>and</strong> maker of healthcare regulation. SIGLIC must give<br />
an appropriate answer to each player, keeping the necessary restriction to sensitive personal data of<br />
patients. For that, it has several entities connected by codes not accessible to users which dissociate<br />
the patient personal data of his clinical data. It also has an elaborated system of user profiles which<br />
aims to ensure that only authorized users can access information, <strong>and</strong> that it is available according to<br />
the level of access of each one.<br />
SIGLIC addresses in an innovative way the information for clinical governance, foc<strong>using</strong> on the core<br />
business of health, as illustrated in figure 11.<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
HIS: Hospital <strong>Information</strong> System<br />
Figure 10: SIGLIC <strong>and</strong> its interactions with the different players<br />
Figure 11: <strong>Information</strong> architecture of clinical data in SIGLIC<br />
The core business of healthcare stems from the interaction between organizations <strong>and</strong> patients,<br />
designated by event. The event has a minimum data set such as the date of occurrence, the patient,<br />
the professional responsible for the event <strong>and</strong> the service unit where the event occurs. The result of<br />
that interaction is the identification <strong>and</strong> classification in scientific terms of the patient health issues<br />
approached in the event, as well as its corresponding actions proposed or implemented by health<br />
providers, designated by nosological unit. The events, clinical <strong>and</strong> administrative, occur as many as<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
needed to complete the diagnosis <strong>and</strong> treatment of the patient. Those set of events are aggregated in<br />
a therapeutic episode. The episode represents the set of interventions in the resolution of identified<br />
diseases <strong>and</strong> in the context of a defined plan of care. The events occur on a specific date in a hospital<br />
unit or service. The approach to a disease or a set of diseases is made with the establishment of a<br />
care plan that projects the necessary events leading to the resolution of identified diseases. The<br />
episode is the series of events in the institution that responds to the care plan <strong>and</strong> is the institutional<br />
response to the problem identified, representing the value of services provided. The institutional<br />
response is according to its available resources (human, physical <strong>and</strong> financial) <strong>and</strong> internal<br />
organization. There can be more than one episode to treat the patient issues, according to his care<br />
plane, <strong>and</strong> the patient can be treated in more than one service <strong>and</strong> hospital. But SIGLIC takes into<br />
account the single episode which aggregates all the therapeutically episodes occurred <strong>and</strong> therefore<br />
the global time the patient waited to be treated from the moment his issues were identified.<br />
The other SIGIC’s stakeholders can access the information through reports from SIGLIC.<br />
SIGLIC is made up of modules that correspond to each of the components of SIGIC process. Each<br />
module corresponds to a feature with or more forms to register or consult information. The following<br />
illustration shows the modules main menu:<br />
Figure 12: Main menu of SIGLIC<br />
The following picture illustrates the layout <strong>and</strong> design of SIGLIC, by <strong>using</strong> one of its forms as an<br />
example.<br />
Figure 13: Form for registering or consulting general data about a surgery<br />
SIGLIC was designed to support all phases of de SIGIC process <strong>and</strong> to give information for all<br />
process' participants, according to their specific functions <strong>and</strong> needs in the NHS. For that, SIGLIC<br />
587<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
was built taking into account the real needs of clinical activity in hospitals, based on the interactions<br />
between the institution <strong>and</strong> the patient.<br />
SIGLIC must also possess solid information, related to the integrity of collected data. To enable this it<br />
was implemented a redundant system with different sources permanently checking data quality. This<br />
process is extremely important to guarantee that information in SIGLIC is reliable, in order that the<br />
right care is provided to a given patient, the hospital administration makes the right management<br />
decisions <strong>and</strong> the hospitals have the right funding from NHS, based on the correct information.<br />
The figure below shows SIGLIC’s diagram of data acquisition. The database of integrated knowledge<br />
is a unified <strong>and</strong> coherent set of information that is based on the needs revealed by patients,<br />
integrating the production processes while generating cost <strong>and</strong> value <strong>and</strong> which culminates in the<br />
perception of the gains in health <strong>and</strong> the value perceived by the patient.<br />
Figure 14: Diagram of data acquisition in SIGLIC<br />
The information is recorded by hospitals in SIGLIC or in their hospital information system, in<br />
accordance with a set of st<strong>and</strong>ards <strong>and</strong> integrated into the central database of SIGIC, as the<br />
illustrated in the figure 15.<br />
There is a minimal data set to integrate hospital data in the central database of SIGLIC. The hospitals<br />
are responsible for the quality of the data in their information systems. This data is initially validated<br />
by SIGLIC for detect procedural mistakes, in case it detects mistakes or non-reliable information<br />
according to the st<strong>and</strong>ards, SIGLIC provides it for the users.<br />
<strong>Information</strong> is a valuable resource to make decisions <strong>and</strong> that’s what SIGLIC is about. By <strong>using</strong> an<br />
adequate interface it collects data from hospitals information systems. This data is the knowledge<br />
base <strong>and</strong> it can be aggregated by surgical service, hospital, group of pathologies, group of surgical<br />
specialties, hospital, region <strong>and</strong> country. SIGLIC allows that this knowledge is shared with all the<br />
users of the information system in different perspectives, according to needs of each one <strong>and</strong> the part<br />
they play in the health business sector.<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
Figure 15: Workflow of information management in SIGLIC<br />
The data collected is about clinical, hospital capacity (human <strong>and</strong> physical resources), services<br />
provided (surgical services <strong>and</strong> procedures), hospital funding (financial resources), medical<br />
professionals, hospital production, dem<strong>and</strong> for surgical caring <strong>and</strong> process management. The private<br />
hospitals with SIGIC convention register directly their clinical <strong>and</strong> administrative activities in SIGLIC.<br />
SIGIC imposes a set of transformations in various information systems. When the healthcare<br />
providers of SIGIC do not have appropriate systems, they can use SIGLIC. So SIGLIC is not only a<br />
central information system used by the Central Administration of NHS to control SIGIC, but also can<br />
be used as a hospital information system to register activity related to surgical treatments. It also as<br />
three levels of management access: central, regional <strong>and</strong> hospital. In each of the three levels there’s<br />
a unit responsible for all matters of SIGIC concerned to their institution.<br />
The next figure shows in general terms how SIGLIC builds the information <strong>and</strong> guarantees its quality.<br />
Figure 16: Construction of the information in SIGLIC<br />
589
Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
The data collected by SIGLIC must have identification of the following: author; user that registered the<br />
information; date <strong>and</strong> time of registration; <strong>and</strong> hospital. By gathering that information, SIGLIC<br />
guarantees its quality, that is, the author is responsible for the information conveyed.<br />
The payment to healthcare providers is in accordance to the registered production. SIGLIC also<br />
provides tools to support management through financial reports <strong>and</strong> audit data.<br />
SIGLIC relies on a new paradigm based on the implementation of information systems geared to the<br />
administrative aspects of clinical registration management, as a procedural instrument of services<br />
provided to the patient. In this new approach the registration of clinical activity, complemented with<br />
appropriate administrative information, is transformed into useful information to management for<br />
various levels of use, such as: clinical, administrative <strong>and</strong> management. The information is<br />
aggregated according to the needs <strong>and</strong> access authorizations.<br />
The following picture shows the different features of SIGLIC <strong>and</strong> its interactions with other information<br />
systems, including hospital information systems (HIS), central healthcare information systems like<br />
RNU (National Patient Network) <strong>and</strong> other systems.<br />
Figure 17: Features <strong>and</strong> interactions of SIGLIC with other information systems<br />
SIGLIC is a valuable tool to monitor <strong>and</strong> control all the process <strong>and</strong> procedures regulated by SIGIC<br />
such as:<br />
To support public hospital funding <strong>and</strong> private hospital billing;<br />
To guarantee patients’ rights;<br />
To control the quality of healthcare services provided by institutions;<br />
To regulate surgical activity;<br />
To manage transfer of patients between hospitals;<br />
To promote the communication between all players in the process;<br />
To manage failures <strong>and</strong> irregularities in the process;<br />
To manage supply <strong>and</strong> dem<strong>and</strong> for surgical treatment; <strong>and</strong>,<br />
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Rita Cristóvão <strong>and</strong> Pedro Gomes<br />
To supply performance indicators (process management, quality <strong>and</strong> clinical).<br />
Finally, the following figure presents some numbers of SIGLIC database in 2010.<br />
Figure 18: SIGLIC database numbers <strong>and</strong> transactions volume in 2010<br />
With SIGLIC, the management process of the national waiting list for surgery is run with transparency<br />
to all players <strong>and</strong> users. It assures equal access <strong>and</strong> quality treatment in all NHS patients waiting for<br />
surgery <strong>and</strong> makes healthcare providers <strong>and</strong> patients responsible for their actions <strong>and</strong> duties in the<br />
process.<br />
591
592
Work<br />
in<br />
Progress<br />
Papers with<br />
Posters<br />
593
594
<strong>Information</strong> <strong>Management</strong> Enabling Collaborative oak Tree<br />
Population Care: How to Define <strong>and</strong> Initiate a Change<br />
<strong>Management</strong> Process in a Local Community in Sweden<br />
Maria Bergenstjerna<br />
Gothenburg University, Göteborg, Sweden<br />
Maria.Bergenstjerna@chalmers.se<br />
Abstract: This short paper presents forthcoming research in information management related to natural<br />
resources, the background <strong>and</strong> analysis of its scope <strong>and</strong> method. It concludes by exp<strong>and</strong>ing on data collection.<br />
Keywords: change, change management, information management <strong>and</strong> sustainable development<br />
1. Introduction<br />
It is argued that biodiversity is a precondition for sustainable development (United Nations 2010). In<br />
this respect, an old oak tree is said to provide an excellent environment, as it grows for one hundred<br />
years, thrives for one hundred years <strong>and</strong> dies for another hundred years. This long continuity is a<br />
prerequisite for the biodiversity that can be found in an oak tree (United Nations 2011). However,<br />
knowledge about these trees in local communities in which they form a natural part is also required in<br />
order for biodiversity to increase.<br />
2. Research scope<br />
There is an oak tree population, which has grown for generations in a local community in Sweden.<br />
One major part of the forest is protected as a nature reserve of national <strong>and</strong> European interest, which<br />
has rendered a veteran oak survey <strong>and</strong> arboricultural management plan (ProNatura 2004). The<br />
remaining part of the community consists of parkl<strong>and</strong>s <strong>and</strong> private properties scattered in forest<br />
remains (Bergenstjerna 2008). Here there are two forests of high conservation interest but they lack<br />
official protection. The local authorities own one of them <strong>and</strong> the other is private. <strong>Management</strong> of such<br />
an oak population in a densely populated community is not well understood by the authorities, nonprofit<br />
organisations nor by local people (Googins <strong>and</strong> Rochlin 2000, Bergenstjerna 2011,<br />
Dalsl<strong>and</strong>skommunernas Kommunalförbund 2011). Therefore, striving for better knowledge as a<br />
prerequisite for preservation <strong>and</strong> protection of the remaining oak trees is important as urbanization<br />
continues.<br />
Recently, there has been an increase in the number of green industry businesses offering a variety of<br />
skilled tree services to property owners in the area, such as tree trimming <strong>and</strong> pruning, tree removal,<br />
tree stump removal <strong>and</strong> emergency tree services. Property owners make tree care choices for safety<br />
reasons but also for aesthetics, gardening ease <strong>and</strong> for economic reasons, not to say the least. Thus,<br />
to avoid conflict with the natural needs of the trees while people are living modern lives in modern<br />
homes there is a need to find means to locally manage an oak tree population through a balance of<br />
interests between on one h<strong>and</strong> private property owners with a right to decide for themselves <strong>and</strong> on<br />
the other h<strong>and</strong> interests of the public expressed through government as a long term need for<br />
biodiversity <strong>and</strong> sustainability (Young et al. 2005).<br />
However, stakeholders vary from having no picture at all of the future oak tree management; what it<br />
actually means, what is important <strong>and</strong> how it should be carried out; to having created long-term<br />
concepts of change management. Thus, some of them have an idea of their own role <strong>and</strong> the role of<br />
others in the change process but these pictures of underst<strong>and</strong>ing are not well communicated.<br />
Therefore, in order to successfully establish <strong>and</strong> pursue collaborative oak tree population care the<br />
stakeholders have a need for close dialog on all aspects of oak tree lives enabled by better<br />
information flow <strong>and</strong> IT use in all its forms (Bol<strong>and</strong> <strong>and</strong> Tenkasi 1995, Friedman <strong>and</strong> Miles 2006).<br />
Therefore, the research scope will be foc<strong>using</strong> information management enabling collaborative oak<br />
tree population care <strong>using</strong> information systems theory (Langefors 1980) <strong>and</strong> system thinking<br />
(Checkl<strong>and</strong> 2000) in order to reach a balanced investment (Forrester 1971, Checkl<strong>and</strong> 1985, Frisk<br />
2011).<br />
595
3. Research method<br />
Maria Bergenstjerna<br />
The research method idea gradually developed through several occasions where we had the<br />
opportunity to unite a private oak tree interest <strong>and</strong> an interest in research. On each occasion we acted<br />
out of a role, the role as private property owner, the role as member of a non-profit organisation, the<br />
role as citizen <strong>and</strong> the role as researcher.<br />
Inspired by the ProNatura veteran oak survey <strong>and</strong> encouraged by the regional authorities, a simple<br />
private oak tree survey was carried out in the surrounding part of the community by the private<br />
property owner. The result showed that there were as many veteran oak trees outside as within the<br />
nature reserve, which highlighted issues of relevant professional knowledge for oak tree population<br />
care (Bergenstjerna 2008). The report was distributed to local <strong>and</strong> regional authorities as well as local<br />
non-profit organisations <strong>and</strong> interested people in the community. Three years later, a new contact was<br />
made with the regional authorities, now as a member of a non-profit organisation. A fine hint from an<br />
authority representative triggered an application arguing for advancing knowledge about oak trees on<br />
private properties through a complementary survey. The survey is to be conducted by members of the<br />
local chapter of The Swedish Society for Nature Conservation, SSNC (2011) <strong>and</strong> qualified expertise<br />
given the permission by private residence owners (Bergenstjerna 2011). The application was made in<br />
the role of a member of the non-profit organisation SSNC together with the local authority.<br />
In the past some thirty years ago, people in the local community put down efforts, out of concern for<br />
the oak trees, to inform the authorities about the need for preservation <strong>and</strong> to engage local people in<br />
their protection. Today, a sustainable future is envisioned when people with different responsibilities,<br />
power <strong>and</strong> influence in the local community come together in a collaborative oak tree population care.<br />
Then what becomes clear to an active citizen reflecting on the present is that change is vital but<br />
managing change will be complex. When change is in its infancy like in this particular situation, some<br />
stakeholders have a vague idea of the change management process <strong>and</strong> others cannot picture the<br />
process at all. It is like a federation, where nobody has the whole picture or the means to control the<br />
others since everybody is a stakeholder with a differing view, means of power, will etc. Who will be<br />
first to attain power? What is the change management task? What suitable means are there for<br />
change management? How can change management operate <strong>and</strong> drive change in a situation where<br />
all stakeholders are not even aware of the phenomena <strong>and</strong> the need for change, where there are no<br />
clear development goals <strong>and</strong> no clear development process to be implemented by relevant<br />
stakeholders? (Enquist et al. 2001, Senge et al. 1999). <strong>Information</strong> <strong>and</strong> knowledge is required in order<br />
to deal with these issues <strong>and</strong> for the process to be wise. Thus, the main issue is how to define <strong>and</strong><br />
initiate change management.<br />
From the researchers eye, it is interesting to see how the private simple survey report (Bergenstjerna<br />
2008) gradually opened people’s hearts <strong>and</strong> minds <strong>and</strong> how they in turn acted on the information. For<br />
example, a local authority representative found inspiration to form an application to the regional<br />
authorities, which argues for a collaborative effort among ten local authorities to find the means to<br />
protect the veteran trees in all their local communities (Dalsl<strong>and</strong>skommunernas Kommunalförbund<br />
2011). Reflecting on this, it appears the action would not have been the same without the written<br />
documents; the private report <strong>and</strong> the SSNC <strong>and</strong> local authority application. Together with the Internet<br />
<strong>and</strong> email conversations it can be argued that documents played an important role in the exchange of<br />
ideas <strong>and</strong> eventually for the research method to develop.<br />
The idea is to use action-research through a change management coaching process in order to find<br />
means for dealing with change management issues (Checkl<strong>and</strong> 2000, Mathiassen 1998). It includes<br />
two researchers who will use a combination of DELTA change management framework, a previous<br />
research result (Enquist et al. 2001) <strong>and</strong> reflection in the research process.<br />
4. Data collection<br />
The scope of the research is thus to be conducted adjacent to change <strong>and</strong> the change management<br />
process preferably <strong>using</strong> action-research through a change management coaching process for data<br />
collection. One researcher will be active in oak tree projects <strong>and</strong> reflect on the change management<br />
process in the local community through the light of the individual roles; as private property owner, as<br />
member of a non-profit organisation, as citizen <strong>and</strong> as researcher. The other researcher, experienced<br />
in change management <strong>and</strong> a mentor, will play an active role in the research process but will be idle<br />
in oak tree projects.<br />
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Maria Bergenstjerna<br />
Data will be collected through remnants such as documents, notes <strong>and</strong> email conversations with<br />
people in tree care <strong>and</strong> in research that has come out of the process so far <strong>and</strong> will come out during<br />
the forthcoming process, Once the research project is clear <strong>and</strong> set data must be carefully collected<br />
<strong>and</strong> the coaching process should be transparent. Previously, PowerPoint slides <strong>and</strong> a digital<br />
communication tools enabling picture <strong>and</strong> sound recording has been successfully tested in previous<br />
collaboration between the two researchers <strong>and</strong> will therefore serve as method for data collection<br />
together with a research diary.<br />
In this way, knowledge of initiation, development <strong>and</strong> implementation of information management<br />
related with natural resources is likely to grow thereby making a contribution to both science <strong>and</strong><br />
practice.<br />
References<br />
Bergenstjerna, M. (2008) Var finns de skyddsvärda träden utanför naturreservatet Särö Västerskog? En privat<br />
inventering av främst grov ek inom kommunal och privat mark på Särön.<br />
Bergenstjerna, M. (2011) Skyddsvärda träd och trädmiljöer på Särö, Ansökan om bidrag för lokala<br />
naturvårdsprojekt (LONA), Länsstyrelsen Hall<strong>and</strong>.<br />
Bol<strong>and</strong>, R. J. Jr. <strong>and</strong> Tenkasi, R. V. (1995) Perspective Making <strong>and</strong> Perspective Taking in Communities of<br />
Knowing, Organization Science, Vol. 6, No. 4 (Jul. - Aug.) pp. 350-372.<br />
Checkl<strong>and</strong>, P. (1985) Achieving ‘Desirable <strong>and</strong> Feasible’ Change: An Application of Soft Systems Methodology,<br />
Operational Research Society Vol. 36, No. 9, pp 821-831.<br />
Checkl<strong>and</strong>, P. (2000) Soft Systems Methodology: a Thirty Year Retrospective, Systems Research <strong>and</strong><br />
Behavioral Science, 17: S11–S58.<br />
Enquist, H., Magoulas, T., Bergenstjerna, M. <strong>and</strong> Holmqvist, M. (2001) DELTA Meta Architecture for Proactive<br />
<strong>Management</strong> of Coordinated Development in Complex Enterprises <strong>and</strong> <strong>Information</strong> Systems, Final Report,<br />
Project P10525, <strong>Management</strong> of Continuous Needs-based Development <strong>and</strong> Change of Complex<br />
Comm<strong>and</strong> <strong>and</strong> Control Systems, NUTEK Program for Complex Technical System.<br />
Forrester, J. W. (1971) World dynamics, Wright-Allen Press.<br />
Friedman, A. L. <strong>and</strong> Miles, S. (2006) Stakeholders: theory <strong>and</strong> practice, Oxford University Press, Oxford.<br />
Frisk. E. J. (2011) Evaluating as Designing: - Towards a Balanced IT Investment Approach, Ph.D. thesis,<br />
Department of Applied <strong>Information</strong> Technology, Chalmers University of Technology & University of<br />
Gothenburg.<br />
Googins, B. K. <strong>and</strong> Rochlin, S. A. (2000) Creating the Partnership Society: Underst<strong>and</strong>ing the Rethoric <strong>and</strong><br />
Reality of Cross-Sectoral Partnerships, Business <strong>and</strong> Society Review, Issue 105, Part 1, pp 127-144.<br />
Dalsl<strong>and</strong>skommunernas Kommunalförbund (2011) Värna skyddsvärda träd, Ansökan om bidrag för lokala<br />
naturvårdsprojekt (LONA), Länsstyrelsen Hall<strong>and</strong>.<br />
Langefors, B. (1980) Infological models <strong>and</strong> information user views. <strong>Information</strong> Systems 5: 17-32.<br />
Mathiassen, L. (1998) Reflective Systems Development, Sc<strong>and</strong>inavian Journal of <strong>Information</strong> Systems, Vol 10,<br />
Issue 1-2.<br />
Pro Natura <strong>and</strong> Treework Environmental Practice (2004) Särö Västerskog, Veteran Oak Survey <strong>and</strong><br />
Arboricultural <strong>Management</strong> Plan, on behalf of Länsstyrelsen i Hall<strong>and</strong>, Enheten för naturvård &<br />
miljöövervakning, Meddel<strong>and</strong>e 2004:26. Kopieringsbolaget AB, Halmstad.<br />
Senge, P., Kleiner, A., Roberts, C., Ross, R., Roth, G., Smith, B. <strong>and</strong> Guman, E. C. (1999) The dance of change:<br />
The challenges to sustaining momentum in learning organizations. Performance Improvement, 38: 55–58.<br />
The Swedish Society for Nature Conservation, 2011, [online]; http://www.naturskyddsforeningen.se/in-english/<br />
United Nations (2010) International Year of Biodiversity 2010, [online],<br />
http://www.un.org/apps/news/story.asp?NewsID=33393&Cr=envirionment<br />
United Nations (2010) International Year of Forests 2011, [online], http://www.un.org/en/events/iyof2011/<br />
Young, J., Watt, A., Nowicki, P., Alard, D., Clitherow, J., Henle, K., Johnson, R., Laczko, E., McCracken, D.,<br />
Matouch, S., Niemela, J. <strong>and</strong> Richards, C. (2005) Towards sustainable l<strong>and</strong> use: identifying <strong>and</strong> managing<br />
the conflicts between human activities <strong>and</strong> biodiversity conservation in Europe, Biodiversity <strong>and</strong><br />
Conservation, Vol 14, No. 7, pp1641–1661.<br />
597
Motivations in Virtual Communities: A Literature Review<br />
Giovanni Camponovo<br />
University of Applied Sciences of Southern Switzerl<strong>and</strong><br />
Giovanni.Camponovo@supsi.ch<br />
Abstract: One of the major recent trends in the IT l<strong>and</strong>scape is the fast emergence of community-based models<br />
centered on the active participation of users as contributors. This trend is so strong that many observers consider<br />
it as a step in the evolution of systems, for instance by referring to it as Web 2.0. Community-based models<br />
permeated various types of services like social networks, user generated content communities, interest or<br />
practice communities, peer-to-peer networks, open source software communities, wireless communities <strong>and</strong> so<br />
on. However, <strong>using</strong> a community-based model is not a guarantee of success, as the primary key success factor<br />
is the ability to attract a critical mass of contributing users. Therefore, a key research issue is to underst<strong>and</strong> what<br />
motivates users to actively participate in such virtual communities typically characterized by a loose group of<br />
individuals that primarily interact via some computer-mediated communication media. This paper proposes a<br />
review of existing studies of user motivation in various types of virtual communities with the goal of highlighting a<br />
few general motivations that are recurring across the various community types as well as suggesting that<br />
motivations are context sensitive by pointing out that the importance of the various types of motivation is<br />
somewhat different across the different types of communities. The results of this paper are a taxonomy of<br />
communities in four broad types according to their primary orientation (social relationships, contents, interests<br />
<strong>and</strong> resources), a taxonomy of motivations (intrinsic, psychological, social <strong>and</strong> economical) <strong>and</strong> a mapping<br />
between the various community types <strong>and</strong> motivations.<br />
Keywords: virtual communities, motivations, literature review<br />
1. Introduction<br />
The rapid emergence of community-based applications <strong>and</strong> business models centered on the active<br />
participation of users as contributors is probably the most influential trends occurring in the ICT<br />
l<strong>and</strong>scape. This trend is so strong that many observers consider it as a step in the evolution of<br />
information systems. For instance, many now commonly refer to community-based web systems like<br />
social networks, blogs <strong>and</strong> user-generated content sites as “Web 2.0”, implicitly suggesting that they<br />
are more evoluted than the old “Web 1.0” sites. This view is well described by Musser <strong>and</strong> O’Reilly<br />
(2006): “Web 2.0 is a set of economic, social, <strong>and</strong> technology trends that collectively form the basis<br />
for the next generation of the Internet—a more mature, distinctive medium characterized by user<br />
participation, openness, <strong>and</strong> network effects”.<br />
The characteristics or user participation, openness <strong>and</strong> network effects are the basis of a more<br />
general family of community-based business models which includes various types of services such as<br />
communities of interest or practice (e.g. thematic forums <strong>and</strong> news), social networks (e.g. Facebook),<br />
user generated content communities (e.g. Youtube, Flickr), peer-to-peer networks (e.g. BitTorrent),<br />
open source software communities (e.g. SourceForge), wireless communities (e.g. FON) <strong>and</strong> so on.<br />
Although there are many successful examples of business <strong>using</strong> a community-based model, the<br />
major difficulty <strong>and</strong> primary key success factor is the ability of the community to attract a critical mass<br />
of contributing users. It is widely acknowledged that the development <strong>and</strong> sustainability of a<br />
community heavily depends on the involvement of many motivated members willing to make<br />
contributions or share their resources with it. The value of a community does indeed strongly depends<br />
on network externalities (as the number of members increases, the network becomes more valuable<br />
which then attracts even more users <strong>and</strong> so forth) <strong>and</strong> thus building critical mass is a key imperative<br />
for growth <strong>and</strong> sustainability.<br />
Therefore, a key research issue is to underst<strong>and</strong> what motivates users to actively participate in such<br />
virtual communities typically characterized by a loose group of individuals that primarily interact via<br />
some computer-mediated communication media. This research question has been tackled by many<br />
researchers in different contexts <strong>and</strong> with different theoretical models. Because this heterogeneity<br />
makes it difficult to get a comprehensive broad overview of research in this topic, it is useful to<br />
aggregate <strong>and</strong> summarize the various contributions in a literature review. This paper therefore<br />
proposes a review of existing studies of user motivation in various types of virtual communities with<br />
the goal of highlighting a few general motivations that are recurring across the various community<br />
types as well as suggesting that motivations are context sensitive by pointing out that the importance<br />
of the various types of motivation is somewhat different across the different types of communities.<br />
598
2. Methodology<br />
Giovanni Camponovo<br />
Relevant papers about motivations in virtual communities were identified through an extensive<br />
literature review whose initial corpus consisted in the articles published after year 2000 in the top ten<br />
journal in the information systems discipline as proposed by the Association for <strong>Information</strong> Systems<br />
<strong>and</strong> in particular by the ranking of Rainer <strong>and</strong> Miller (2005) 1 as well as the main IS conferences (ICIS<br />
<strong>and</strong> the various regional conferences).<br />
To this corpus, we added other papers we could find through online databases like ACM Digital<br />
Library, ABI Inform, JSTOR, Elsevier <strong>and</strong> SpringerLink. The search strategy used to identify articles in<br />
those search engines was based on combining relevant keywords like virtual communities (with<br />
variants such as online communities, electronic communities, electronic networks of practice as well<br />
as the various specific types of communities identified thereafter in the paper) <strong>and</strong> motivation (with<br />
variants like participation, contribution, gratifications <strong>and</strong> action).<br />
Finally, other references were obtained from this initial corpus by looking at the references cited in the<br />
various papers, with the process being repeated iteratively until no further references were identified.<br />
In this phase we also collected the various papers describing the various general motivation theories<br />
cited in the various articles.<br />
Of all the references collected, we only retained papers proposing empirical studies <strong>using</strong> primary<br />
data: we considered both qualitative studies (e.g. based on interviews or content analysis) <strong>and</strong><br />
quantitative studies (e.g. based on surveys) leaving out purely theoretical papers. These references<br />
were then entered into a reference management software to check for duplications <strong>and</strong> relevant<br />
papers were classified by type of community <strong>and</strong> summarized into a spreadsheet containing the<br />
authors, year or publication, methodology, community type, country, reference theories employed, the<br />
various motivations found <strong>and</strong> their relevance.<br />
3. Literature review<br />
3.1 General motivation theories<br />
Human motivation is a popular theme among researchers in a broad number of disciplines like<br />
psychology, sociology, economics <strong>and</strong> information systems. Consequently, many theories have been<br />
developed to explain human behaviour <strong>and</strong> hereafter we briefly illustrate the ones that are most<br />
relevant to our context (that have been used as a basis to explain motivations for participation in<br />
virtual communities).<br />
One early theory is the expectancy-valence theory (Vroom, 1964; Atkinson, 1966), which suggests<br />
that individuals are motivated to do an activity if they expect that their efforts will lead to a good<br />
performance (expectancy), that will lead to desirable outcomes (instrumentality) that are valuable to<br />
them (valence).<br />
A first stream of motivation theories focuses on the determinants of intentional behaviour. The Theory<br />
of Reasoned Action (Fishbein <strong>and</strong> Ajzen, 1975) suggests that a person’s behavioural intention<br />
depends on his attitude towards the behaviour (i.e. “a function of beliefs about the behaviour’s<br />
consequences <strong>and</strong> evaluations of those consequences”) <strong>and</strong> his subjective norm (i.e. his “beliefs that<br />
relevant referents think he should or should not perform the behaviour <strong>and</strong> his motivation to comply<br />
with the referents”). The Theory of Planned Behaviour (Ajzen, 1991) extends it by adding the<br />
construct of perceived behavioural control to consider “the perceived ease or difficulty of performing<br />
the behaviour”. Building on these two theories, the Technology Acceptance Model (Davis, 1989)<br />
states that intention of <strong>using</strong> a technology is determined by its perceived usefulness (the belief that it<br />
would enhance one’s performance) <strong>and</strong> its perceived ease of use (the belief that it would be free of<br />
effort). Finally, the Unified Theory of Acceptance <strong>and</strong> Use of Technology (UTAUT) (Venkatesh et al.,<br />
2003) combines several of the preceding theories by considering four determinants of intention<br />
(performance expectancy, effort expectancy, social influence <strong>and</strong> facilitating conditions) <strong>and</strong> four<br />
moderating variables (gender, age, experience <strong>and</strong> voluntariness of use). It is worth to notice, that<br />
1 MIS Quarterly, Communications of the ACM, <strong>Information</strong> Systems Research, <strong>Management</strong> Science, Journal of <strong>Management</strong><br />
<strong>Information</strong> Systems, Harvard Business Review, Decision Sciences, IEEE Transactions (various), Decision Support Systems,<br />
ACM Transactions on <strong>Information</strong> Systems <strong>and</strong> European Journal of <strong>Information</strong> Systems<br />
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Giovanni Camponovo<br />
there are many variants of these models that consider others constructs like trust, playfulness, selfefficacy<br />
etc.<br />
The last aspect of self-efficacy is the cornerstone of the Social Cognitive Theory (B<strong>and</strong>ura, 1977): if<br />
people believe in their capabilities to perform a specific action (the idea of self-efficacy) that they<br />
believe to be capable of attaining a desired outcome (outcome expectancy) they are more inclined to<br />
do so (they also considering perceived impediments <strong>and</strong> opportunities).<br />
The self determination theory (Deci <strong>and</strong> Ryan, 1985; Valler<strong>and</strong>, 1997) offers another well suited<br />
theoretical framework as it explains motivations of people within social contexts. Unlike the preceding<br />
theories, it does not treat motivation as a unitary concept that simply varies in intensity, but<br />
differentiates different kinds of motivations. More specifically, it raises a distinction between intrinsic<br />
motivation (doing something for the pleasure of doing an interesting activity or to satisfy some on<br />
psychological innate needs for competence, autonomy <strong>and</strong> relatedness) <strong>and</strong> extrinsic motivation (we<br />
do something for the purpose of receiving some separable outcome as a result of our action such as<br />
obtaining tangible rewards or avoiding punishments, obtaining social rewards such as approval <strong>and</strong><br />
status or obtaining some psychological reward such as get self-esteem, pride or avoid guilt or<br />
anxiety). While this theory suggests that people can have more than one motivation type, several<br />
studies propose that extrinsic motivation can have a negative effect on intrinsic motivation, the socalled<br />
crowding out effect (see Gagné <strong>and</strong> Deci, 2005 for a brief review).<br />
Another interesting stream of research in social psychology has studied motivations underlying<br />
prosocial behaviour intended to benefit other people such as helping, comforting, sharing <strong>and</strong><br />
cooperating (Batson, 1998). While much of this research studied spontaneous helping in unexpected<br />
situations, some authors have also examined planned helping such as volunteering. For instance,<br />
Clary et al. (1998) propose that people volunteer because it serves one or more functions such as<br />
gaining knowledge, express one’s values, comply with social expectations, get utilitarian<br />
recompenses, enhance one’s ego or protect oneself against negative feelings about oneself. While<br />
members may not see contributing to a virtual community as volunteering, It appears to be fruitful to<br />
examine whether those typical motivations are a factor in members’ decisions to join <strong>and</strong> participate in<br />
a community (Butler, 2004).<br />
Other applicable theories focus on the idea of exchange. Economic exchange theory posits that<br />
individuals behave rationally according to self-interest (i.e. when rewards exceed costs), whereas<br />
social exchange theory (Blau, 1964) suggests that social exchange also involves intangible benefits<br />
such as improved relationships as well as feelings like reciprocal obligation, gratitude, trust etc.<br />
Innovation diffusion theory (Moore, 1999; Rogers, 2003) describe the patterns of adoption of an<br />
innovation among the members of a social system <strong>and</strong> propose a set of factors that influence this<br />
process. These theories describe a number of characteristics of an innovation that favor its diffusion<br />
(relative advantage, compatibility, complexity, trialability, observability) <strong>and</strong> the characteristics of the<br />
different adopter types (from the more venturesome early adopters that may be more attracted by<br />
intrinsic reasons to the more skeptical <strong>and</strong> traditional late adopters which mainly seek proven<br />
solutions <strong>and</strong> less risky outcomes).<br />
Finally, the expectation-confirmation model complements the abovementioned theories by not<br />
foc<strong>using</strong> on the initial adoption of a system, but on its continued use which is also critical for its longterm<br />
viability. This model was ideated by Oliver (1980) to explain repurchase intentions based on<br />
satisfaction, which in turn depends on the confirmation of initial expectations against performance.<br />
This model has been applied to information systems by Bhattacherjee (2001), suggesting that<br />
continuance intention is determined by its perceived usefulness <strong>and</strong> the user satisfaction, with the<br />
latter being determined by the confirmation of expectations following actual use as well as its<br />
perceived usefulness.<br />
Many of the concepts of the various theories are rather similar <strong>and</strong> can be regrouped as follows:<br />
The taxonomy of motivation proposed in table 1 will then be used as a basis to describe the<br />
motivation in the various types of wireless communities, with the exception that effort <strong>and</strong> facilitating<br />
conditions will not be included because they are not motivations in a strict sense, but rather contextual<br />
factors that may hinder or facilitate participation. On the other h<strong>and</strong>, we will distinguish utility into two<br />
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Giovanni Camponovo<br />
separate concepts: the satisfaction of a personal need <strong>and</strong> the attainment of an external reward. We<br />
also add the concept of reciprocity as it is one of the defining element of virtual communities.<br />
Table 1: Mapping of motivation theories <strong>and</strong> concepts<br />
Psychological factors Social factors Utilitarian factors<br />
THEORY enjoyment competence values relations<br />
Expectancy<br />
Valence<br />
Theory<br />
Theory of<br />
Reasoned<br />
Action<br />
Theory of<br />
Planned<br />
Behaviour<br />
Technology<br />
Acceptance<br />
Model<br />
UTAUT<br />
Social<br />
Cognitive<br />
Theory<br />
Innovation<br />
Diffusion<br />
Theory<br />
Self<br />
Determinati<br />
on Theory<br />
Prosocial<br />
behaviour<br />
theory<br />
attitude<br />
toward<br />
behaviour<br />
attitude<br />
toward<br />
behaviour<br />
Affect /<br />
Anxiety Self-efficacy<br />
intrinsic<br />
motivation<br />
enhanceme<br />
nt<br />
introjection<br />
(competenc<br />
e)<br />
underst<strong>and</strong>i<br />
ng<br />
identificatio<br />
n (values)<br />
introjection<br />
(relatednes<br />
s)<br />
3.2 Definition <strong>and</strong> types of virtual community<br />
social<br />
influence<br />
subjective<br />
norm<br />
subjective<br />
norm<br />
Social<br />
Influence<br />
observabiilt<br />
y (image)<br />
introjection<br />
(approval)<br />
Utility Cost/effort Facilitating<br />
conditions<br />
instrumentality<br />
expectancy<br />
perceived<br />
usefulness<br />
performanc<br />
e<br />
perceived<br />
ease of<br />
use<br />
effort<br />
expectancy<br />
expectancy<br />
outcome<br />
expectation<br />
s<br />
relative<br />
advantage<br />
external<br />
regulation<br />
(rewards)<br />
values social career<br />
perceived<br />
behavioural<br />
control<br />
facilitating<br />
conditions<br />
complexity compatibility<br />
One of the first definition of virtual communities (also called online communities) is the one from<br />
Rheingold (Rheingold, 2002): “social aggregations that emerge from the Net when enough people<br />
carry on those public discussions long enough, with sufficient human feeling, to form webs of personal<br />
relationships in cyberspace”. While this definition highlights the social character as a defining element<br />
of a virtual community, other authors propose a larger set of elements of what constitutes a<br />
community which includes shared resources, interests, needs or activities that are the primary reason<br />
for belonging to the community, common values, reciprocal behaviour <strong>and</strong> a shared context of social<br />
conventions (Whittaker et al., 1997; Preece, 2000).<br />
Based on such a broader view of what constitutes an online community, several authors identify<br />
various types of virtual communities <strong>and</strong> propose different classifications.<br />
Many classifications are based on the primary goal of the community. One of the first of such<br />
classifications is proposed by Armstrong <strong>and</strong> Hagel (1996) who distinguish four different types of<br />
virtual communities: communities of transaction, interest, fantasy <strong>and</strong> relationship. A comparable<br />
classification is proposed by Hummel <strong>and</strong> Lechner (2002), who classify communities from the more<br />
communication oriented to the more transaction oriented, distinguishing five types of communities:<br />
gaming communities, communities of interest, B2B communities, B2C communities <strong>and</strong> C2C<br />
communities. Finally, Markus (2002) proposes an exp<strong>and</strong>ed taxonomy of virtual communities that<br />
encompasses both classifications which distinguishes based on their social orientation (relationship<br />
building <strong>and</strong> entertainment), professional orientation (expert network <strong>and</strong> learning) <strong>and</strong> commercial<br />
orientation (B2B, B2C <strong>and</strong> C2C). We also feel that it is important to add communities of resourcesharing“<br />
such as peer-to-peer networks <strong>and</strong> wireless communities.<br />
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Giovanni Camponovo<br />
A different criteria is employed by Porter (2004), who based on community structure distinguishes<br />
between member-initiated <strong>and</strong> organization-sponsored communities: the former is established <strong>and</strong><br />
self-managed by members <strong>and</strong> can have a social or professional orientation, the latter is established<br />
<strong>and</strong> managed by either a commercial, non-commercial or governmental organization. This distinction<br />
is also made by Camponovo <strong>and</strong> Picco-Schwendener (2010), who differentiate pure communities<br />
(built <strong>and</strong> managed by members in a self-organized way) <strong>and</strong> hybrid communities (built <strong>and</strong> managed<br />
by an organization that supports individual members that are willing to participate).<br />
Because both criteria are expected have an important impact on members’ motivations, we propose<br />
here to use an integrated taxonomy that combines both criteria which is shown in the figure below<br />
(remark that a community may also span over more than one community type at the same time).<br />
Table 2: Taxonomy of virtual communities (adapted from Markus 2002, Porter 2004)<br />
Type Social orientation Professional orientation Commercial orientation<br />
Subtype<br />
memberinitiated <br />
organizationsponsored<br />
Entertainment<br />
(e.g. gaming,<br />
user-generated<br />
content)<br />
Relationship<br />
building<br />
(e.g. common<br />
interests)<br />
Expert<br />
network<br />
(e.g.<br />
practice,<br />
knowledge)<br />
Learning<br />
(e.g. open<br />
source)<br />
B2B<br />
(e.g. br<strong>and</strong>,<br />
e-markets)<br />
C2C<br />
(e.g. P2P,<br />
auctions)<br />
This framework is used as a basis for the following chapters dedicated to describing the motivation in<br />
the various types of communities. Our choice of community is made firstly by choosing three types of<br />
communities according to their goal: a social-oriented type of community like communities of interest,<br />
a professional-oriented community like open-source communities <strong>and</strong> a commercial oriented<br />
community like a wireless community (C2C). Then within the three types we will make a further<br />
distinction based on community structure, distinguishing between member-initiated <strong>and</strong> organizationsponsored<br />
communities.<br />
3.3 Motivations in wireless communities<br />
A nice starting point for describing research on motivation in wireless communities is a literature<br />
review (Bina <strong>and</strong> Giaglis, 2005) that identifies 8 papers that propose a first list of motivations<br />
(cooperative spirit, gain prestige, challenge telecom firms <strong>and</strong> promote free communication) without<br />
empirical investigation.<br />
The first attempt to study these motivations empirically developed a theoretical model with a broad<br />
mix of intrinsic (enjoyment, competence, autonomy, relatedness), obligation-based (reciprocity,<br />
shared values) <strong>and</strong> extrinsic motivations (explicit rewards, external pressure, self-esteem, ego<br />
involvement, connectivity needs, human capital, career prospect, altruism). The model was tested<br />
with surveys in Greece (Bina <strong>and</strong> Giaglis, 2006) <strong>and</strong> Australia (Lawrence et al., 2007), finding that<br />
different groups of members participate with different mixes of intrinsic <strong>and</strong> extrinsic motivations, with<br />
the former being more prevalent.<br />
Subsequent studies in Canada (Wong <strong>and</strong> Clement, 2007; Cho, 2008) found that similar short-term<br />
motivations based on personal interest (fun, learning, social, professional networking, free access) are<br />
complemented by long-term motivations based on public interest (promoting inclusion in the<br />
<strong>Information</strong> Society, media democracy, civic activism). A recent paper (Shaffer, 2010) found similar<br />
self interest motivations like gratification from <strong>using</strong> technical skills, obtaining free access <strong>and</strong> public<br />
interest motivations like contributing to exp<strong>and</strong>ing broadb<strong>and</strong> access.<br />
Finally, (Camponovo <strong>and</strong> Picco-Schwendener, 2010) analyzed motivations in large ‘hybrid’ community<br />
(supported by a firm) finding that unlike in pure communities members are motivated mainly by<br />
utilitarian (free network access) or psychological (idealism <strong>and</strong> feeling competent) rather than intrinsic<br />
or social motivations (socializing with peers or feel part of a community).<br />
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Giovanni Camponovo<br />
A graphical summary of these papers <strong>and</strong> the relative motivation is shown below.<br />
Table 3: Motivations in wireless communities<br />
Psychological factors Social factors Utilitarian factors<br />
Author type Interest competenc<br />
enjoymen e self-<br />
t esteem<br />
altruistic<br />
values<br />
social<br />
relations<br />
social<br />
influence<br />
reciprocity<br />
Utility<br />
(pers.<br />
need)<br />
Utility<br />
(rewards)<br />
(Bina <strong>and</strong><br />
pure<br />
Giaglis, 2006)<br />
(Lawrence et<br />
pure<br />
al., 2007)<br />
atlruism,<br />
collective<br />
rewards<br />
interest competence relatedness<br />
ideology<br />
identificatio reciprocity connectivity (insignifican<br />
n<br />
t)<br />
intrinsic competence atlruism,<br />
(Wong <strong>and</strong><br />
Clement, pure<br />
2007)<br />
(Cho, 2008) pure<br />
(Shaffer, variou<br />
2010) s<br />
(Camponovo<br />
<strong>and</strong> Picco- hybrid<br />
Schwendener<br />
2010)<br />
(Camponovo<br />
<strong>and</strong> Piccohybrid<br />
Schwendener,<br />
2011)<br />
collective<br />
rewards<br />
relatedness<br />
ideology<br />
identificatio reciprocity connectivity (insignifican<br />
n<br />
t)<br />
promoting<br />
cooperative<br />
reduce<br />
access<br />
connectivity<br />
membership<br />
costs<br />
(low)<br />
providing social<br />
professional<br />
fun learning<br />
free WiFi networking<br />
related<br />
goals<br />
use<br />
exp<strong>and</strong><br />
technical<br />
connectivity save money<br />
access<br />
skills<br />
cheap<br />
feeling altruistic contact with sense of<br />
reciprocity connectivity router,<br />
competent reasons members community<br />
revenue<br />
cheap<br />
technical spirit of<br />
reciprocity connectivity router,<br />
interest sharing<br />
revenue<br />
It appears that while motivations are very heterogeneous, utilitarian motivation (obtain free<br />
connectivity), together with altruistic motivation (help others by offering access) <strong>and</strong> competence (the<br />
possibility to learn <strong>and</strong> show technical skills) are the most frequently cited motivations. While the mix<br />
of utilitarian <strong>and</strong> altruistic motivation may seem strange, it is worth noticing that with the diffusion of<br />
flat-fee broadb<strong>and</strong> connections offering free access to others does not have any impact on costs or<br />
personal use.<br />
What is more interesting is that social <strong>and</strong> intrinsic motivations are higher in pure communities,<br />
whereas utilitarian motivations are more salient in hybrid communities. This may be explained by the<br />
presence of a firm in hybrid communities, their greater use of rewards (which tend to have a negative<br />
effect on intrinsic motivation (Gagné <strong>and</strong> Deci, 2005)), their larger size (which increases utility due to<br />
network externalities (Economides, 1996) <strong>and</strong> reduces the strength of social ties among members<br />
(Olson, 1971)) or because they emerged later (thus attract late adopters that are more attracted by<br />
tangible aspects (Moore, 1999)).<br />
3.4 Motivations in virtual communities of practice<br />
Virtual communities of interest or practice are without doubt the most studied virtual communities,<br />
probably because they have a much longer tradition than the other types (they exist since more than<br />
30 years in the form of Usenet newsgroups <strong>and</strong> forums) <strong>and</strong> have been widely adopted inside<br />
organizations (in particular to help communication <strong>and</strong> share knowledge among employees). A<br />
selection of the most relevant empirical studies of member motivations in such communities is shown<br />
in the next table.<br />
The investigation of motivation for contributing to organizational communities of practice aimed at<br />
sharing knowledge inside organizations has produced a large body of literature that focuses on the<br />
importance of sharing knowledge as a foundation for a firm’s competitive advantage (cf. Grant, 1991)<br />
<strong>and</strong> the importance of personal beliefs, institutional structure <strong>and</strong> context (cf. Bock et al., 2005 for a<br />
nice literature review).<br />
With regard to empirical studies about the motivations of individuals, various authors have been<br />
inspired by different theories <strong>and</strong> have consequently found rather heterogeneous results as shown<br />
below in table 5. For instance Bock et al. (2002; 2005) found that contributors are driven primarily by<br />
anticipated reciprocal relationships, a sense of self-worth by contributing <strong>and</strong> an organizational climate<br />
that is fair <strong>and</strong> innovative, but may be hindered by extrinsic rewards. In contrast, (Kankanhalli et al.,<br />
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Giovanni Camponovo<br />
2005) confirmed that self-efficacy was important, but also found that extrinsic factors like rewards<br />
played an important role. Other studies also add recognition as an expert as a relevant motivation<br />
(Ardichvili et al., 2003). It is difficult to fully explain such a heterogeneity of motivation, which probably<br />
depends a lot on contextual factors such as organizational culture (trust, climate, norms etc.), business<br />
sector <strong>and</strong> national culture.<br />
Table 4: Motivations in virtual communities of practice<br />
Author communit<br />
y type<br />
Bock<br />
2002<br />
Ardichvili<br />
2003<br />
Bock<br />
2005<br />
Kankanh<br />
alli 2005<br />
Wasko<br />
2000<br />
Butler<br />
2002<br />
Wasko<br />
2005<br />
Nonneck<br />
e 2006<br />
enterpris<br />
e<br />
enterpris<br />
e<br />
enterpris<br />
e<br />
enterpris<br />
e<br />
public<br />
public<br />
public<br />
public<br />
Peddibh<br />
otla 2005 public<br />
Sangwan<br />
2005<br />
Chen<br />
2006<br />
Huang<br />
2008<br />
public<br />
public<br />
public<br />
Interest<br />
enjoyment<br />
Psychological factors Social factors Utilitarian factors<br />
competenc<br />
e self-<br />
esteem<br />
expected<br />
contributio<br />
n<br />
sense of<br />
self worth<br />
knowledge<br />
selfefficacy<br />
enjoyment<br />
entertainin learn<br />
g<br />
enjoy<br />
myself<br />
entertainm<br />
ent (not<br />
sig.)<br />
selfexpertise<br />
(not sig.)<br />
competenc<br />
e<br />
self<br />
expression<br />
altruistic<br />
values<br />
public<br />
interest<br />
enjoyment<br />
in helping<br />
others<br />
altruism<br />
pro-social<br />
altruistic<br />
benefits<br />
enjoy<br />
helping<br />
offer my<br />
expertise<br />
altruistic<br />
(not sig.)<br />
social<br />
relations<br />
expected<br />
association<br />
s<br />
anticipated<br />
relationship<br />
s<br />
interaction<br />
with a<br />
community<br />
social<br />
benefits<br />
(relations)<br />
social<br />
influence reciprocity<br />
expert<br />
status<br />
image<br />
(not sig.)<br />
visibility<br />
benefits<br />
giving back<br />
Fairness<br />
reciprocity<br />
centrality reputation reciprocity<br />
(not sig.)<br />
make<br />
friends<br />
social<br />
interaction<br />
(-)<br />
social<br />
interaction<br />
expectation<br />
discussing<br />
with people<br />
be a<br />
communit<br />
y member<br />
social<br />
adjustive<br />
(not sig.)<br />
Utility<br />
(pers.<br />
need)<br />
reciprocity valuable<br />
information<br />
<strong>Information</strong><br />
benefits<br />
get<br />
answers<br />
knowledge<br />
& utilitarian<br />
information<br />
needs<br />
knowledge<br />
expectatio<br />
n<br />
usefulness<br />
&<br />
information<br />
Utility<br />
(rewards)<br />
expected<br />
rewards (-)<br />
anticipated<br />
rewards (-)<br />
organizatio<br />
n rewards<br />
Communities of practice in public settings, such as thematic forums <strong>and</strong> newsgroups, have also<br />
received a lot of attention. Motivations differ to a certain extent with regard to enterprise communities,<br />
especially as social aspects <strong>and</strong> personal needs are much higher (Chen, 2007; Huang et al., 2008).<br />
These motivations have been extensively investigated as part of a debate on lurkers versus active<br />
contributors, based on the observation that many members just to get the information they need but<br />
do not actively contribute. Butler et al. (2007) found that active participant have higher social <strong>and</strong><br />
altruistic motivations (they really enjoy interacting with people with similar interests as well as helping<br />
them) but are less motivated by information benefits than lurkers. Nonnecke et al. (2006 ) similarly<br />
focused on the difference between poster <strong>and</strong> lurkers, finding similar results except posters also had<br />
higher motivations with regard to information benefits as well as intrinsic enjoyment. Other papers<br />
also add competence <strong>and</strong> visibility as other significant motivations (Wasko <strong>and</strong> Faraj, 2000; 2005;<br />
Peddibhotla <strong>and</strong> Subramani, 2005; Sangwan, 2005). The absence of rewards from motivations is not<br />
surprising as they are hardly used by this type of communities.<br />
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Giovanni Camponovo<br />
3.5 Motivations in open source software communities<br />
Literature about motivation in open source software communities is also quite large. In the following<br />
table we summarize the most relevant papers that study contributors’ motivations empirically. It is<br />
worth noticing that there also are a number of papers describe motivations <strong>using</strong> a case-study<br />
methodology or economic models (see Bitzer et al. (2007) for a concise review) which are not<br />
reported in the following table as they do not offer an empirical justification.<br />
In contrast with the other two types of communities examined in this paper, in this case it is often not<br />
possible to make the distinction between member-generated <strong>and</strong> firm-supported communities since<br />
most of the papers described below wither addressed their surveys to a mix of communities (thus<br />
potentially comprising communities of both types) or did not specify to which type the community<br />
belonged.<br />
Table 5: Motivations in Open Source communities<br />
Author<br />
(Hars <strong>and</strong> Ou,<br />
2001)<br />
Interest<br />
enjoyment<br />
self-determination<br />
(Lakhani <strong>and</strong><br />
Wolf, 2005) enjoyment<br />
(David <strong>and</strong><br />
Shapiro, 2008)<br />
(Oreg <strong>and</strong><br />
Nov, 2008)<br />
(Baytiyeh <strong>and</strong><br />
Pfaffman,<br />
2010 )<br />
like the<br />
challenge<br />
flow<br />
Psychological factors Social factors Utilitarian factors<br />
competenc<br />
e selfesteem<br />
human<br />
capital<br />
improve<br />
skills<br />
learn &<br />
get better<br />
selfdevelopme<br />
nt<br />
learning &<br />
creation<br />
altruistic<br />
values<br />
altruism<br />
ideological<br />
motives<br />
ideological<br />
& altrusim<br />
altruistic<br />
altruism<br />
social<br />
relations<br />
community<br />
identificatio<br />
n<br />
like the<br />
team<br />
(low)<br />
interact with<br />
developers<br />
social<br />
influence reciprocity<br />
peer<br />
recognitio<br />
n (low)<br />
enhance<br />
reputation<br />
(low)<br />
reputationbuilding<br />
contribute<br />
because<br />
use<br />
Utility<br />
(pers.<br />
need)<br />
personal<br />
needs<br />
personal<br />
needs<br />
personal<br />
needs<br />
Utility<br />
(rewards)<br />
paid for<br />
developmen<br />
t<br />
paid for<br />
contribution<br />
employer<br />
pressure<br />
(low)<br />
Table 3 shows that the motivations that drive open source participants are variegate. The most<br />
important motivations appear to be the need of feeling competent (which is also close to the feeling of<br />
enjoyment of taking on a challenge) as well as altruism (which is coherent with the values of freedom<br />
behind the open source movement). Another common motivation is linked to personal need: many<br />
open source projects <strong>and</strong> contributions do indeed start with the idea of developing functionalities<br />
needed by the developers themselves. The presence of rewards is also unsurprising, as enterprises<br />
increasingly make use of the open source development model <strong>and</strong> developers are increasingly being<br />
paid to work on it (Fitzgerald, 2006). On the other h<strong>and</strong>, it is surprising that reputation <strong>and</strong> social<br />
relations are seldom found to be important motivations.<br />
4. Discussion <strong>and</strong> conclusions<br />
By performing a literature review of empirical studies in virtual communities, this paper shows that the<br />
motivations that drive members to participate in such communities are rather diverse <strong>and</strong> variegate:<br />
they comprise intrinsic psychological reasons (such as intrinsic enjoyment, need to feel worthy <strong>and</strong><br />
competent <strong>and</strong> good feeling of being altruistic), social reasons (such as the desire to entertain social<br />
relations with interesting people, get social recognition or respect reciprocity exchanges in a<br />
community) as well as economic reasons (such as the utility obtained by satisfying a personal need<br />
as well as extrinsic benefits).<br />
This paper also proposed a classification that distinguishes among various types of virtual<br />
communities based on their orientation (social, professional <strong>and</strong> commercial) <strong>and</strong> their structure (pure<br />
communities self-managed by members <strong>and</strong> hybrid communities supported by a firm or nonprofit<br />
organization).<br />
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Giovanni Camponovo<br />
By examining empirical paper in three types of communities (communities of practice, open source<br />
communities <strong>and</strong> wireless communities), this paper found that motivations are diverse both within <strong>and</strong><br />
across communities. In particular, while empirical results of papers are somewhat heterogeneous –<br />
namely because of the large number of reference theories employed (see section 3.1) <strong>and</strong> thus often<br />
foc<strong>using</strong> only on a subset of potentially relevant motivations supported by the chosen reference<br />
theory – some general observations can be made. Firstly it appears that the importance of extrinsic<br />
rewards is more important in hybrid communities supported by a firm (this can be seen in wireless<br />
communities <strong>and</strong>, to a lesser extent, in communities of practices). Secondly, it appears that members<br />
often are motivated by a combination of different motivation that reinforce each other such as<br />
satisfying personal needs (which triggers usage of the community) as well as social <strong>and</strong> psychological<br />
needs (which also favor a more active contribution).<br />
Of course this paper has some limitations in that it only focuses on empirical studies (thus neglecting<br />
to do proper justice to the vast amount of more theoretical papers) <strong>and</strong> only considers three types of<br />
virtual communities. It might therefore be interesting to extend this work to pure relationship<br />
communities such as social networks, entertainment communities such as gaming <strong>and</strong> user<br />
generated content communities (e.g. video <strong>and</strong> photo communities), commercial communities (e.g.<br />
social shopping sites, buyer groups, br<strong>and</strong> communities) as well as peer-to-peer networks.<br />
We hope that this work makes a bit of order in the existing research <strong>and</strong> stimulates further research.<br />
We feel that it is especially important to extend existing research in three directions: 1) make an effort<br />
to avoid an excessive proliferation of reference theoretical models by comparing, integrating <strong>and</strong><br />
consolidating reference theories, which would permit both a better evaluation of competing theories<br />
as well as a better comparability of results across studies; 2) better underst<strong>and</strong> the impact of many<br />
contextual factors that could help explain the heterogeneity of results across the different studies both<br />
within <strong>and</strong> across the various types of community <strong>and</strong> 3) exp<strong>and</strong> the research about communities<br />
within <strong>and</strong> across of different types of communities.<br />
Acknowledgment<br />
This paper has been supported by a research project financed by the Swiss National Science<br />
Foundation under grant number 100014-127006.<br />
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An Enterprise Ontology Approach for Defining Enterprise<br />
<strong>Information</strong> Architecture<br />
Bernardo Gomes, André Vasconcelos <strong>and</strong> Pedro Sousa<br />
Instituto Superior Técnico, Oeiras, Portugal<br />
INOV, Lisboa, Portugal<br />
bernardosilvagomes@gmail.com<br />
<strong>and</strong>re.vasconcelos@ist.utl.pt<br />
pedro.sousa@ist.utl.pt<br />
Abstract: The role played by information in organizations is becoming increasingly important, since it is<br />
becoming clear its relevance as a central background for Enterprise Architecture <strong>and</strong> Enterprise Engineering.<br />
The enormous amount of <strong>Information</strong> in organizations leads to the development of <strong>Information</strong> Architectures in<br />
order to support this problem. Thus, the Portuguese Public Administration, being aware of that, wants to be well<br />
prepared regarding the information context, having a consistent <strong>Information</strong> Architecture to be used as a<br />
reference. Such architecture aims to identify the fundamental business information, define the data independently<br />
from the applications or systems, <strong>and</strong> provide the basis for corporative data management. This work aims to<br />
contribute in the development of that <strong>Information</strong> Architecture, introducing the Enterprise Ontologies theme in the<br />
Portuguese Public Administration context, as a new approach for Enterprise Architecture, especially for<br />
<strong>Information</strong> Architecture development. In this paper we present a new methodology for developing <strong>Information</strong><br />
Architecture, based on the DEMO methodology, in particular in the Transaction concept in order to extract<br />
<strong>Information</strong> Entities, their Attributes <strong>and</strong> Relationships for an <strong>Information</strong> Architecture. In our research this<br />
methodology is being tested in some case studies among the Portuguese Public Administration. The<br />
methodology proposed major steps are: (1) collecting of the necessary amount of data about the case study, (2)<br />
which must be resumed in some legible text. From that text, the first steps of DEMO are performed ((3) Performa-<br />
Informa-Forma Analysis, (4) Coordination-Actors-Production Analysis, (5) Transaction Pattern Synthesis), in<br />
order to identify the Transactions that describe that environment. Based on those Transactions, (6) both the<br />
<strong>Information</strong> Entities <strong>and</strong> Attributes are identified. In order to identify Relationships between those entities, (7) the<br />
Result Structure Analysis step is performed. To complete the methodology, <strong>and</strong> based on the previously results,<br />
an (8) Entity-Relationship is designed to represent the entities <strong>and</strong> their relationships.<br />
Keywords: enterprise architecture, information architecture, information entities, attributes, relationships,<br />
enterprise ontologies, DEMO<br />
1. Introduction<br />
Despite the awareness that we live today in an information society, in many organizations information<br />
is still not well managed (Martin, Dmitriev <strong>and</strong> Akeroyd, 2010: 6-12). Thus, <strong>Information</strong> Architecture<br />
(IA) arises as a top discipline towards the improvement of information management, since it can be<br />
viewed as a structured set of multidimensional interrelated elements that support all information<br />
processes (Watson, 2000: 7059). The highest-level of IA is usually very similar among organizations<br />
from the same business area (Inmon, 2000), which allows the development of reference IAs. Public<br />
administration is not an exception in this context, since the amount of information that it deals with is<br />
larger <strong>and</strong> more dispersed. This sense, it also must have an IA that describes the information entities<br />
that underlie the business processes execution (Vasconcelos, 2007).<br />
This work proposes to contribute to the development of an IA to the Portuguese public administration,<br />
susceptible to be used as a reference. It intends to identify <strong>and</strong> describe the information entities that<br />
cut across the entire public administration. Furthermore, it proposes a new approach to the<br />
formulation of that IA, so that it also considers the essence, coherence, consistence, completeness<br />
<strong>and</strong> objectivity that should be important features of it. This new approach is based in the enterprise<br />
ontologies theme, taking in consideration the DEMO methodology.<br />
Figure 1 presents the problem definition, <strong>using</strong> a conceptual map. In that picture, the most relevant<br />
motivation concepts are depicted, <strong>and</strong> also how they are related to each other. Finally, the<br />
relationships stressed with an orange dashed line are the core problems of this work.<br />
This article is structured in order to address the main themes that are the support for this work. Firstly<br />
there is a review in terms of the ‘state of the art’, in order to describe the major theoretical concepts<br />
that support this work. The themes covered are: enterprise ontologies (including the Ѱ-theory <strong>and</strong><br />
DEMO) <strong>and</strong> information architecture (including Inmon taxonomy). After this theoretical review, it will<br />
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be described the proposed methodology for develop information architectures based on enterprise<br />
ontologies <strong>and</strong> DEMO. This includes an academic example already developed. Then it will be<br />
described the research questions that driven from this proposal. Finally, some conclusions are drawn,<br />
in order to describe the key ideas that should be retained from this work so far.<br />
Figure 1: Conceptual map defining the context <strong>and</strong> problem for this work<br />
2. Enterprise ontologies<br />
The enterprise ontology concept is a concretization of the ontology definition applied to enterprises.<br />
According to Dietz <strong>and</strong> Hoogervorst (2007), its goal is to underst<strong>and</strong> the essence of the construction<br />
<strong>and</strong> operation of complete systems, more specifically, of enterprises. This definition is aligned with the<br />
system ontology definition, looking through the distracting <strong>and</strong> conf<strong>using</strong> actual appearance of an<br />
enterprise right into its deep essence, like an X-ray machine can let you look through the skin <strong>and</strong> the<br />
tissues of the body right into the skeleton (Dietz <strong>and</strong> Hoogervorst, 2007).<br />
2.1 The Ѱ-Theory<br />
The enterprise ontology as described by Dietz (2006) is founded on the Ѱ-theory. This is a holistic<br />
<strong>and</strong> integrative theory, based in a set of four axioms (Dietz, 2006); the operation axiom; the<br />
transaction axiom; the composition axiom; <strong>and</strong> the distinction axiom.<br />
The operation axiom states that the operation of an enterprise is constituted by the activities of actor<br />
roles, which are elementary chunks of authority <strong>and</strong> responsibility, fulfilled by subjects. These<br />
subjects perform two kinds of acts: production acts (P-acts) <strong>and</strong> coordination acts (C-acts), which<br />
produce production facts (P-fact) <strong>and</strong> coordination facts (C-fact), respectively.<br />
The transaction axiom reads that coordination acts are performed as steps in universal patters, called<br />
transactions, which involve two actor roles <strong>and</strong> are aimed at achieving a particular result. A<br />
transaction (which basic pattern is described in Figure 2) evolves in three different phases: the order<br />
phase (O-phase), the execution phase (E-phase) <strong>and</strong> the result phase (R-phase). It is performed by<br />
two actors: the initiator <strong>and</strong> the executor.<br />
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Figure 2: The basic transaction pattern (Dietz, 2006)<br />
The composition axiom arises from the two possible ways that a transaction is initiated, namely<br />
enclosing <strong>and</strong> self-activation. It reads that every transaction is enclosed in some other transaction, or<br />
is a customer transaction of the organization under consideration, or is a self-activation transaction.<br />
The distinction axiom reads that there are three distinct human abilities playing a role in the operation<br />
of actors: performa, informa, <strong>and</strong> forma (Dietz, 2006).<br />
2.2 Design <strong>and</strong> Engineering Methodology for Organizations (DEMO)<br />
DEMO (Design <strong>and</strong> Engineering Methodology for Organizations) is firstly a theory about the<br />
‘construction’ <strong>and</strong> the ‘operation’ of organizations. It is also a methodology for the design,<br />
engineering, <strong>and</strong> implementation of organizations <strong>and</strong> networks of organizations (Enterprise<br />
Engineering Institute, 2011). DEMO is based in Ѱ-theory (Hoogervorst <strong>and</strong> Dietz, 2008), <strong>and</strong> takes<br />
into consideration the organization theorem. It is composed by four distinct aspects models, which<br />
correspond to diagrams, tables <strong>and</strong> lists. Its initial point must use all documentation about enterprise,<br />
of whatever kind. There are six major initial steps are: Performa-Informa-Forma analysis;<br />
Coordination-Actors-Production analysis; Transaction Pattern synthesis; Result Structure analysis;<br />
Construction synthesis; Organization synthesis.<br />
3. <strong>Information</strong> Architecture<br />
Dillon (2002: 821-823) defined IA as the process of designing, implementing, <strong>and</strong> evaluating<br />
information spaces that are humanly <strong>and</strong> socially acceptable to their intended stakeholders.<br />
According to Vasconcelos (2007) IA (or data architecture) is proposed as one of the sub-architectures<br />
of the enterprise architecture spectrum. According to Spewak (1993), there are three different<br />
concepts for IA:<br />
<strong>Information</strong> Entity: any person, place, concept or event that is meaningful in the business context,<br />
<strong>and</strong> which information might be stored.<br />
Attribute: some feature of an entity, which details its definition.<br />
Relationship: an attribute that is related with some other entity.<br />
3.1 <strong>Information</strong> entities by Inmon<br />
Inmon taxonomy, introduced by W. Inmon, arises as an important methodology to classify data. Data<br />
can be classified according to three dimensions (Inmon, 1989): primitive vs. derived; historic vs.<br />
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projected; publics vs. private. Those different type of data determine the data access features <strong>and</strong><br />
also of its management information systems. Taking in consideration those dimensions, we have the<br />
following type of data: primitive data; derived data; historic data; projected data; public data; private<br />
data.<br />
4. <strong>Information</strong> Architecture based on enterprise ontologies<br />
The solution proposed in this work is DEMO based, allowing the creation of an IA for the considered<br />
ontological world. This solution might be organized <strong>and</strong> described in a sequential set of steps. Most of<br />
them are from DEMO methodology, <strong>and</strong> the others are additions made in order to achieve our aim.<br />
Figure 3: The proposed methodology<br />
The purpose of each step of the methodology (Figure 3) might be described as follows:<br />
Step I – Identify <strong>and</strong> separate Performa, Informa <strong>and</strong> Forma items.<br />
Step II – Identify actor roles, C-acts/facts <strong>and</strong> P-acts/results.<br />
Step III – Cluster facts <strong>and</strong> results into transactions; depicts their results.<br />
Step IV – Identify information entities <strong>and</strong> attributes based on the result types of each transaction;<br />
classify attributes <strong>using</strong> Inmon taxonomy.<br />
Step V – Identify dependencies between transactions; identify relationships between entities.<br />
Step VI – Create an E-R model to describe the IA.<br />
4.1 Example<br />
In order to better underst<strong>and</strong> the proposed methodology it will be described an example based on the<br />
library example case used by Dietz (2006), about the operation of a typical library, including the<br />
possibility to be a member of it, loan books, etc. The first two steps, described in (Dietz, 2006), regard<br />
both the performa-informa-forma analysis <strong>and</strong> the coordination-actors-production analysis. Based on<br />
those steps, the third step of the proposed methodology depicts the transactions that describe the<br />
scenario. The result of step III is detailed in Table 1, which also includes a part of step IV, (entities<br />
<strong>and</strong> attributes depicted in green <strong>and</strong> red, respectively.<br />
Table 1: Step III of the proposed methodology<br />
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Step IV (Table 2) identifies the information entities <strong>and</strong> attributes (classified by Inmon taxonomy).<br />
Table 2: Step IV of the proposed methodology for the library example<br />
Step V of the proposed methodology, described in Figure 4, applies the structure analysis of DEMO.<br />
Figure 4: Step V of the proposed methodology for the library example<br />
Finally, step VI describes the E-R model for this basic IA, depicted in Figure 5.<br />
Figure 5: Step VI of the proposed methodology for the library example<br />
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5. Research questions<br />
Bernardo Gomes, André Vasconcelos <strong>and</strong> Pedro Sousa<br />
After the description of the proposed methodology <strong>and</strong> of the correspondent academic example, it is<br />
important for the reader to underst<strong>and</strong> the questions that appear associated with its development.<br />
These research questions driven from the challenges faced in creating a new methodology. The<br />
objectives associated with this work might be summed up through the description of a set of major<br />
research questions that the result from it might answer. Thus, the main questions/problems that this<br />
work aims to solve are:<br />
How might enterprise ontologies be used in order to define an IA?<br />
Specifically, how might the transactions defined by DEMO (based on enterprise ontologies) be<br />
used in order to extract the information entities that define an IA?<br />
6. Conclusions<br />
As a response to the awareness of the importance of information among organizations, a Portuguese<br />
Public Administration Agency is developing an IA that might be used as a reference in the Portuguese<br />
public administration context. That architecture intends to depict the most important information<br />
entities that transverse that wide spectrum.<br />
Several efforts have been done in order to create that IA, <strong>and</strong> some other to improve its quality.<br />
However, the actual architecture is still in development, <strong>and</strong> it is expected for it to have a higher<br />
quality. In this context, our work intends to be part of this development process, improving the final<br />
result quality. Taking in consideration a different approach, based on the enterprise ontologies, the<br />
main objective is to underst<strong>and</strong> how the enterprise ontologies, especially the DEMO methodology,<br />
might be used to develop an organization IA. The proposed solution is based in the DEMO, in order to<br />
extract information entities to represent an IA. This information entities, its attributes <strong>and</strong> relations are<br />
intended to be extracted based on the transactions defined by DEMO.<br />
Due to this decision of <strong>using</strong> enterprise ontologies <strong>and</strong> DEMO, there are several issues that are<br />
intended to be addresses <strong>and</strong> possible solved, while there are advantages that are associated. The<br />
work that is intended to be developed in this research aims to combine ‘good practices’ from work<br />
already done, tested <strong>and</strong> accepted. This sense, this aims to be a combination of both IA <strong>and</strong><br />
enterprise ontologies, achieving the best of the two worlds through the benefits from both. The result<br />
from this work might enable the development of an IA not to be as ad hoc as it is nowadays. The<br />
definition of a methodology might enable this development to be schematized <strong>and</strong> well-defined,<br />
enabling better results. Another major advantage that should come out from this work are the features<br />
from DEMO, that should be transposed to the methodology performed. Since this methodology is<br />
based on enterprise ontologies <strong>and</strong> especially the DEMO methodology, its benefits should also be<br />
part of the methodology features. Those benefits are: coherency, consistency, completeness,<br />
modularity, <strong>and</strong> objectivity.<br />
Besides those advantages, there are some problems that might occur during this work. This is a<br />
research to define a new methodology, <strong>and</strong> the possibility for this methodology not be as possible as<br />
we think should not be neglected. This sense, the fact that enterprise ontologies do not define<br />
(clearly) the information entity concept might be a problem in its identification, <strong>and</strong> should be<br />
considered as a vital step for this methodology. Furthermore, there are also other problems that might<br />
appear during the development of this work, which might be related to the complexity associated with<br />
the public administration context. It might be a problem for us to gather the necessary information<br />
(documents, etc.) in order to apply DEMO in order to apply the proposed methodology.<br />
References<br />
Dietz, J.L.G. (2006) Enterprise Ontology: Theory <strong>and</strong> Methodology, Berlin: Springer.<br />
Dietz, J.L.G. <strong>and</strong> Hoogervorst, J.A.P. (2007) 'Enterprise Ontology <strong>and</strong> Enterprise Architecture – how to let them<br />
evolve into effective complementary notions', GEAO Journal of Enterprise Architecture.<br />
Dillon, A. (2002) '<strong>Information</strong> architecture in JASIST: just where did we come from?', Journal of the American<br />
Society for <strong>Information</strong> Science <strong>and</strong> Technology, pp. 821-823.<br />
Enterprise Engineering Institute (2011) Welcome to the website of the Enterprise Engineering Institute, [Online],<br />
Available: HYPERLINK "http://www.demo.nl/" http://www.demo.nl/ [Nobember 2010].<br />
Hoogervorst, J.A.P. <strong>and</strong> Dietz, J.L.G. (2008) 'Enterprise Ontology in Enterprise Engineering', Symposium on<br />
Applied Computing, Fortaleza, 572-579.<br />
614
Bernardo Gomes, André Vasconcelos <strong>and</strong> Pedro Sousa<br />
Inmon, W. (1989) Data Architecture: The <strong>Information</strong> Paradigm, 2 nd edition, QED <strong>Information</strong> Sciences.<br />
Inmon, W. (2000) Using the Generic Data Model, Author.<br />
Martin, A., Dmitriev, D. <strong>and</strong> Akeroyd, J. (2010) 'A resurgence of interest in <strong>Information</strong> Architecture', International<br />
Journal of <strong>Information</strong> <strong>Management</strong>, pp. 6-12.<br />
Spewak, S. <strong>and</strong> Hill, S. (1993) Enterprise Architecture Planning: developing a blueprint for data, applications <strong>and</strong><br />
technology, Boston: QED Pub. Group.<br />
Vasconcelos, A. (2007) PhD Thesis: Arquitecturas dos Sistemas de Informação: Representação e Avaliação,<br />
Lisbon: Author.<br />
Watson, R.W. (2000) 'An Enterprise <strong>Information</strong> Architecture: A Case Study for Decentralized Organizations',<br />
Proceedings of the 33rd Hawaii International Conference on System Sciences, p. 7059.<br />
615
Review of Lean Method Application for Improvement in<br />
Health <strong>Information</strong> Systems<br />
Soudabeh Khodambashi <strong>and</strong> Maryati Mohd Yusof<br />
UKM University, Bangi, Malaysia<br />
s.khodambashi@gmail.com<br />
mmy@ftsm.ukm.my<br />
Abstract: Medical care is undergoing considerable change due to the application of information technology <strong>and</strong><br />
management tools <strong>and</strong> techniques. Health <strong>Information</strong> Systems (HIS) are used extensively in healthcare to<br />
enhance data processing. Various tools <strong>and</strong> techniques including quality management methods are available to<br />
improve efficiency of HIS. Lean method has become relatively popular in improving clinical process cycle <strong>and</strong><br />
work flow, eliminating non-value added activities known as waste. By applying Lean that optimizes clinical work<br />
flow, we can gain safe, efficient <strong>and</strong> high quality care as well as cost reduction. The aim of this paper is to<br />
investigate the application of Lean method <strong>and</strong> its effectiveness in healthcare. We also focus on several Lean<br />
techniques, its major implementation steps as well as the requirements for implementing Lean in healthcare. The<br />
focus would be on implementation of Lean on clinical process related to HIS. The paper also highlights critical<br />
success factor for healthcare organization to consider when implementing Lean method.<br />
Keywords: lean method, health information system, value stream mapping, clinical work flow<br />
1. Introduction<br />
Health <strong>Information</strong> Systems (HIS) are used extensively in healthcare organizations to support various<br />
conventional data processing tasks. They are also used for scheduling, automating nurse stations,<br />
monitoring intensive care patients, <strong>and</strong> providing preliminary diagnoses. The simplest HIS collects<br />
<strong>and</strong> processes data (Yusof et al., 2008b). The application of information technology in healthcare<br />
highlights significant potentials <strong>and</strong> benefits, particularly with regard to innovations in improving both<br />
clinical <strong>and</strong> administrative processes.<br />
A number of quality management methods have been extensively employed in order to improve<br />
health care quality since the last decade. For example, in optimizing clinical workflow as one of the<br />
critical factor of HIS adoption, Lean method would be a better choice (Schweikhart <strong>and</strong> Dembe, 2009,<br />
Yusof et al., 2008a). Health care organizations adopt Lean in their clinical processes. Some of the<br />
public healthcare systems are planning to use Lean or have already adopted it for improving safety<br />
<strong>and</strong> quality of healthcare (Holden, 2010, Jones <strong>and</strong> Mitchell, 2006). It was reported that 53% of the<br />
current hospitals, implemented Lean method (Holden, 2010).<br />
The aim of this paper is to represent the key findings of a literature review on adoption of Lean<br />
method in clinical practices. This paper focuses on Lean concept, tools that would be useful <strong>and</strong><br />
applicable in healthcare, <strong>and</strong> some of the critical success factors for Lean implementation.<br />
2. Lean method<br />
Lean concept was introduced from Toyota Production System <strong>and</strong> it was first implemented in a US<br />
auto manufacturing. Lean is a quality improvement tool which uses quantitative methods for tracking<br />
data to reach the stated goals by documenting progress to improve quality <strong>and</strong> reduce costs<br />
(DelliFraine et al., 2010). Lean aims to improve efficiency by eliminating non-value added activities<br />
that is known as waste (Schweikhart <strong>and</strong> Dembe, 2009).<br />
In Lean method, all steps <strong>and</strong> activities which add value will be maintain by eliminating intermediate<br />
steps, time, <strong>and</strong> people (Poppendieck, 2002). This goal could be achieved by reducing delivery cycle<br />
or shortening delivery batches without adding additional cost (Hines et al., 2004). Lean concept has<br />
been divided into five categories that are value, value stream, flow, pull, <strong>and</strong> perfection (Staats et al.,<br />
2010).<br />
Some of the tools <strong>and</strong> methods in Lean include Value Stream Mapping, Kaizen (short-cycle continues<br />
improvement, Work St<strong>and</strong>ardization, 5S, cellular manufacturing, inventory management, root cause<br />
analysis, A3 report, Poka-yoke (mistake-proofing), change over time reduction (Singh et al., 2010,<br />
Monden <strong>and</strong> Engineers, 1998, Hines et al., 2004, Monden <strong>and</strong> Engineers, 1983, Schonberger, 1986,<br />
Harrison, 1992, Vinodh et al., 2010, Holden, 2010).<br />
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Soudabeh Khodambashi <strong>and</strong> Maryati Mohd Yusof<br />
One of the primary steps of Lean which is also important is known as the Value Stream Mapping<br />
(VSM) (Vinodh et al., 2010). In Lean methodology, patient pathway is considered as a value stream.<br />
VSM is a structured diagram, originated by Toyota which includes steps that are all key activities such<br />
as resources, people, information, <strong>and</strong> material flow is mapped graphically in a clear <strong>and</strong> explicit<br />
manner (Singh et al., 2010). VSM is used to identify <strong>and</strong> track all types of waste <strong>and</strong> process flow<br />
integration to increase process efficiency by reorganizing <strong>and</strong> redesigning the system (Schweikhart<br />
<strong>and</strong> Dembe, 2009, Singh et al., 2010, Vinodh et al., 2010, McDonald et al., 2002, Lasa et al., 2008).<br />
3. Lean application in healthcare<br />
Application of Lean in healthcare focuses on eliminating wastes (delays) <strong>and</strong> repeated errors <strong>and</strong><br />
inappropriate procedures (Liptak <strong>and</strong> Patras, 2007). Lean supports users to improve their process<br />
around the customer requirements, values, <strong>and</strong> expectations. In the healthcare environment, the<br />
customer can be a patient, their family, a physician, a nurse, an administrator or any other stakeholder<br />
in the process.<br />
Since one of the important objectives of HIS is to assist physicians <strong>and</strong> nurses to trace most of the<br />
activities in automatic clinical workflow, identifying all the steps which are involved in HIS should be<br />
documented <strong>and</strong> reviewed. VSM creates a holistic schema of all the processes <strong>and</strong> workflows to<br />
underst<strong>and</strong> interdependency of functions, departments <strong>and</strong> even the whole unit over another. Once<br />
the value stream is mapped, the next step is to identify the critical path. Possible improvements<br />
should also be studied to improve value stream (Singh et al., 2010). When improvements in VSM are<br />
identified, the future VSM state should be created to show how a process should work after it is<br />
redesigned. If redesigning is implemented in the VSM, smaller number of steps <strong>and</strong> also shorter<br />
waiting time between steps could be achieved. As a result, HIS will fit into the clinical pathways if VSM<br />
is implemented in advance.<br />
Most studies on HIS implementation, reported efficiency in their processes. For example, medical<br />
error reduction, especially drug interaction <strong>and</strong> other prescription errors, increased patient safety <strong>and</strong><br />
foster just in time approach could achieved by integrating IT system such as electronic medical<br />
records (Liptak <strong>and</strong> Patras, 2007). Based on the literature, Lean method has been implemented in<br />
many hospitals in their clinical workflow such as histology laboratories, operating room <strong>and</strong><br />
emergency department. Buesa (2009) reported that workflow improvement is attributed by 40%<br />
reduction of operational costs in technical personnel, increased productivity <strong>and</strong> decrease bottleneck<br />
as a result of Lean implementation in fifteen histology laboratories. Other studies reported process<br />
improvement in terms of reduced patient waiting time <strong>and</strong> other turnaround time (DelliFraine et al.,<br />
2010b).<br />
A number of challenges have been identified from the pertinent literature. One important issue in<br />
improving the VSM is that isolated improvements within one department or part of the system that<br />
belongs to one department increased the risk of sub optimization that helps the individual<br />
departments but harms the overall system. In order to consider limited time <strong>and</strong> budget when a VSM<br />
as a starting point of Lean is designed, problems should identified, prioritized <strong>and</strong> solved according to<br />
their impact on patients <strong>and</strong> the other stakeholders. In addition, physician resistance exists during<br />
quality improvement process. Thus, employee involvement <strong>and</strong> empowerment in suggesting <strong>and</strong><br />
making changes could be helpful. As a result, a Lean project team could prepare a draft of<br />
documentation, then, the entire department can provide their inputs <strong>and</strong> comments in the draft.<br />
Furthermore, formalizing of methods would be helpful for better management <strong>and</strong> improving of the<br />
workflow. To achieve quality improvement, culture <strong>and</strong> creative thinking should be given more<br />
attention. While traditional management tries to blame individuals for errors, Lean mindset shows that<br />
94% of errors “belong to the system” (Graban, 2008, Deming, 1994). When we learn from errors, we<br />
can use knowledge to prevent future errors (Black, 2005). There are so many companies that failed in<br />
Lean implementation especially in the stage of cultural changes (Yamamoto <strong>and</strong> Bellgran, 2010). On<br />
the other h<strong>and</strong>, training through st<strong>and</strong>ardized work decreases the risk of verbal training. Even with<br />
external expert in Lean, internal stakeholders also are needed to translate Lean from general tools to<br />
local context (Holden, 2010).<br />
4. Discussion <strong>and</strong> conclusion<br />
Lean has potential to healthcare process <strong>and</strong> applicable in healthcare as it increases efficiency,<br />
reduces medical errors, increases patient safety, reduces operational cost <strong>and</strong> decrease bottleneck.<br />
By <strong>using</strong> Lean, we aim to improve <strong>and</strong> increase collaboration <strong>and</strong> team work across departments, so<br />
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Soudabeh Khodambashi <strong>and</strong> Maryati Mohd Yusof<br />
the risk of sub-optimization can be minimized. By only designing the overall process, the entire<br />
problems will not be solved. However, prioritizing them based on constraint to solve them is an<br />
important aspect to consider. Clinicians are the ones who are very familiar with the details of their<br />
work, hence, they can help to identify better. On the other h<strong>and</strong>, st<strong>and</strong>ardizing the work as a<br />
foundation of Lean should also be considered. In order to have clinician’s agreement to accept<br />
st<strong>and</strong>ardized work, it is important to get them involved in the process. Cultural changes are also<br />
needed to achieve the stated result. Furthermore, having a formal training helps us to reach much<br />
better result. Leadership commitment <strong>and</strong> involvement of internal stakeholders also is another factor<br />
in achieving the goal (Graban, 2008). To conclude, it is worth mentioning that implementing quality<br />
management tools in healthcare which is adopted from a different industry requires an adaption from<br />
its original form <strong>and</strong> context. The underst<strong>and</strong>ing of actors, roles <strong>and</strong> responsibilities, clinical workflow,<br />
processes, <strong>and</strong> critical success factors in Lean implementation in healthcare are crucial to achieve<br />
success. Furthermore, considering Lean method before implementation could be helpful for a project<br />
manager to have a speedy development since st<strong>and</strong>ardized work has been done <strong>and</strong> wasteful<br />
activities has been deleted from the clinical process. Moreover, Lean concepts could be helpful in<br />
mapping the value stream of development processes in software development. This paper is<br />
potentially useful for researchers who desire to conduct study on Lean method in HIS <strong>and</strong> evaluate IT<br />
applications in healthcare settings.<br />
References<br />
Black, N. (2005). <strong>Management</strong> Mistakes In Healthcare: Identification, Correction And Prevention. Journal Of The<br />
Royal Society Of Medicine, 98, 432.<br />
Dellifraine, J., Langabeer, J. & Nembhard, I. (2010). Assessing The Evidence Of Six Sigma And Lean In The<br />
Health Care Industry. Quality <strong>Management</strong> In Healthcare, 19, 211.<br />
Deming, W. E. (1994). The New Economics: For Industry, Government, Education, The Mit Press.<br />
Graban, M. (2008). Lean Hospitals: Improving Quality, Patient Safety, And Employee Satisfaction, Productivity<br />
Press.<br />
Harrison, A. (1992). Just-In-Time Manufacturing In Perspective, Prentice Hall.<br />
Hines, P., Holweg, M. & Rich, N. (2004). Learning To Evolve: A Review Of Contemporary Lean Thinking.<br />
International Journal Of Operations & Production <strong>Management</strong>, 24, 994-1011.<br />
Holden, R. J. (2010). Lean Thinking In Emergency Departments: A Critical Review. Annals Of Emergency<br />
Medicine.<br />
Jones, D. & Mitchell, A. (2006). Lean Thinking For The Nhs. London, Nhs Confederation.<br />
Lasa, I. S., Laburu, C. O. & De Castro Vila, R. (2008). An Evaluation Of The Value Stream Mapping Tool.<br />
Business Process <strong>Management</strong> Journal, 14, 39-52.<br />
Liptak, F. & Patras, V. (2007). Process View On Pharmacy Operations.<br />
Mcdonald, T., Van Aken, E. M. & Rentes, A. F. (2002). Utilising Simulation To Enhance Value Stream Mapping: A<br />
Manufacturing Case Application. International Journal Of Logistics Research And Applications, 5, 213-232.<br />
Monden, Y. & Engineers, I. O. I. (1983). Toyota Production System: Practical Approach To Production<br />
<strong>Management</strong>, Industrial Engineering And <strong>Management</strong> Press, Institute Of Industrial Engineers.<br />
Monden, Y. & Engineers, I. O. I. (1998). Toyota Production System: An Integrated Approach To Just-In-Time,<br />
Engineering & <strong>Management</strong> Press.<br />
Poppendieck, M. (2002). Principles Of Lean Thinking. Oopsla Onward.<br />
Schonberger, R. (1986). World Class Manufacturing: The Lessons Of Simplicity Applied, Free Pr.<br />
Schweikhart, S. & Dembe, A. (2009). The Applicability Of Lean And Six Sigma Techniques To Clinical And<br />
Translational Research. Journal Of Investigative Medicine: The Official Publication Of The American<br />
Federation For Clinical Research, 57, 748.<br />
Singh, B., Garg, S., Sharma, S. & Grewal, C. (2010). Lean Implementation And Its Benefits To Production<br />
Industry. International Journal Of Lean Six Sigma, 1, 157-168.<br />
Staats, B. R., Brunner, D. J. & Upton, D. M. (2010). Lean Principles; Learning; And <strong>Knowledge</strong> Work: Evidence<br />
From A Software Services Provider. Journal Of Operations <strong>Management</strong>, In Press, Accepted Manuscript.<br />
Vinodh, S., Arvind, K. & Somanaathan, M. (2010). Application Of Value Stream Mapping In An Indian Camshaft<br />
Manufacturing Organisation. Journal Of Manufacturing Technology <strong>Management</strong>, 21, 888-900.<br />
Yamamoto, Y. & Bellgran, M. (2010). Fundamental Mindset That Drives Improvements Towards Lean<br />
Production. Assembly Automation, 30, 124-130.<br />
Yusof, M. M., Kuljis, J., Papazafeiropoulou, A. & Stergioulas, L. K. (2008a). An Evaluation Framework For Health<br />
<strong>Information</strong> Systems: Human, Organization And Technology-Fit Factors (Hot-Fit). International Journal Of<br />
Medical Informatics, 77, 386-398.<br />
Yusof, M. M., Papazafeiropoulou, A., Paul, R. J. & Stergioulas, L. K. (2008b). Investigating Evaluation<br />
Frameworks For Health <strong>Information</strong> Systems. International Journal Of Medical Informatics, 77, 377-385.<br />
618
National ICT Strategy <strong>and</strong> its Implementation in Building<br />
<strong>Information</strong> Society in Albania<br />
Ermelinda Kordha 1 <strong>and</strong> As. Kozeta Sevrani 2<br />
1 University of Vlora “Ismail Qemali”, Vlore, Albania<br />
2 University of Tirana, Tirane, Albania<br />
Abstract. <strong>Information</strong> <strong>and</strong> Communication Technologies (ICTs) can be seen as tools, which value<br />
depends on implementation. Yet ICTs are changing almost every sector of society <strong>and</strong> economy.<br />
Today, the society has entered in the stage of information society, in which the creation <strong>and</strong><br />
dissemination of information processing has become the most significant economic activity <strong>and</strong><br />
cultural development. Along with the information society is born the <strong>Information</strong> Economy, in which<br />
knowledge is the main source of value. The Republic of Albania sees ICT development as an essential tool<br />
in building an information society, which in turn is fundamental to the rapid development of Albania <strong>and</strong> the<br />
region. Human capital is seen as the main source for the creation of information society in Albania, so, the<br />
application of ICT. This paper aims to analyze the ICT national strategy <strong>and</strong> its implementation through different<br />
initiatives from public <strong>and</strong> private sector. The final goal is to show the impact on building the information society<br />
in Albania. The methodology used is qualitative. The comparison between the strategy <strong>and</strong> data gathered from<br />
different sources about ICT projects as well as 20 interviews with government officials, project leaders <strong>and</strong><br />
managers countrywide have showed the impact <strong>and</strong> fields most developed contributing in building information<br />
society. The strategy must aim to develop the information society both in stimulating competitiveness <strong>and</strong><br />
applying ICT for the benefit of the whole population. Its implementation has contributed only partly in reaching<br />
some of the objectives. Although the focus has been in finalizing projects in e-government <strong>and</strong> e-education, the<br />
results are still far from those required, for a variety of reasons. The policies guiding the private sector have been<br />
more efficient <strong>and</strong> different ICT subsectors are growing.<br />
Keywords: <strong>Information</strong> society, ICT strategy, human development, implementation, business<br />
1. Introduction<br />
Nowadays ICTs can be applied to a tremendously diverse range of human experience. They are<br />
transforming virtually every sector of society <strong>and</strong> the economy. Today’s technological transformations<br />
are intertwined with globalization, <strong>and</strong> together they are creating the new realities of the global<br />
economy. In a society where the information <strong>and</strong> knowledge are of vital importance for the purpose of<br />
development, the role of ICT is growing. So, ICTs play the role of an enabler of development in<br />
several respects, cross-sector productivity <strong>and</strong> economic growth, specific social development goals<br />
<strong>and</strong> political participation <strong>and</strong> good governance, taking the society in the phase of <strong>Information</strong> society.<br />
While there are good grounds for believing that the use of ICTs are positively correlated to productivity<br />
growth, acquiring ICTs is not enough for countries to derive economic benefits (OECD 2003). This is<br />
taken into account when thinking of the proper strategies that lead towards the information society.<br />
Different initiatives have taken place from the EU to help countries <strong>and</strong> regions building national <strong>and</strong><br />
regional ICT strategies. At this point we will try to analyze the Albanian national ICT strategy <strong>and</strong> its<br />
implementation through different projects. Below it will be presented the need for ICT strategy in<br />
striving for the creation of an information society, in general, as well as the results of the exploratory<br />
research about the most developed fields that drive the building of <strong>Information</strong> society .<br />
2. <strong>Information</strong> society <strong>and</strong> ICT strategy<br />
The importance of information is rising in societies around the world. An ‘information society’ is a<br />
society in which we take for granted the role of information as it pervades <strong>and</strong> dominates the activities<br />
of government, business <strong>and</strong> everyday life. The information society will be characterized by the fact<br />
that the rapid <strong>and</strong> convenient delivery of needed information is the ordinary state of affairs (Garfield<br />
2001). Together with the information society is born the information economy, which characterizes an<br />
economy with an increased emphasis on informational activities <strong>and</strong> information industry. Problems<br />
appear already at the definition of information society or information economy (Karvalics 2005). The<br />
term “information economy” refers to “a new global electronic structure, wherein the production of<br />
information goods <strong>and</strong> services dominates wealth <strong>and</strong> job creation, <strong>and</strong> is underpinned by the use of<br />
information <strong>and</strong> communication technologies (ICTs) <strong>and</strong> the global information<br />
infrastructure.”(Cogburn 1999). However, information economy is considered a "stage" of an<br />
economy, coming after manufacturing. <strong>Information</strong> society, is a closely related but wider concept.<br />
Closer terms to information economy would include knowledge economy <strong>and</strong> post-industrial economy.<br />
619
Ermelinda Kordha <strong>and</strong> As. Kozeta Sevrani<br />
<strong>Information</strong> <strong>and</strong> knowledge are the bedrock of the <strong>Knowledge</strong> Economy – the “currency” of modern<br />
societies (Markle foundation 2003). The term ‘<strong>Knowledge</strong> Society’ generally refers to a society where<br />
knowledge is the primary production resource instead of capital <strong>and</strong> labour. Various observers<br />
describe today's global economy as one in transition to a "knowledge economy," as an extension of<br />
an "information society."In today’s increasingly integrated global economy, firms across the economic<br />
l<strong>and</strong>scape, including those in developing countries, will need to learn how to acquire <strong>and</strong> use<br />
information effectively if they hope to succeed. In many cases information strategies are<br />
communicated just as information society development programs, with direct concentration of<br />
governmental resources <strong>and</strong> systematic realization of long-term operative programs (Karvalics 1997).<br />
In visioning <strong>and</strong> in developing ICT strategies, it is important to think strategically of ICTs as enablers<br />
of human development. It is imperative to consider how enhanced access to information can improve<br />
the lives of people as well as stimulate the economy <strong>and</strong> streamline government.<br />
3. Methodology<br />
The methodology used is qualitative. We have analyzed the actual ICT strategy of Albania in the light<br />
of information society. First of all we aimed to underst<strong>and</strong> the stage of strategy implementation, so we<br />
compared the strategy areas <strong>and</strong> data gathered about ICT projects implemented in Albania. Than, we<br />
have administered 20 semi-structured interviews with government officials, project leaders <strong>and</strong><br />
managers countrywide. The goal was to take their perception about ICT strategy implementation in<br />
Albania <strong>and</strong> the factors where Albania should focus more. The interviews were administered face to<br />
face <strong>and</strong> were registered. Then, they were analyzed to identify the most frequently mentioned<br />
problems <strong>and</strong> results in implemented projects. These findings will be showed below.<br />
4. The Albanian ICT strategy in the regional context<br />
ICT adoption <strong>and</strong> its impact in economy <strong>and</strong> society has been especially vigorous in certain Member<br />
States (e.g. Irel<strong>and</strong>, Finl<strong>and</strong>), while this effect has still not materialized in most EU countries (Van Ark<br />
<strong>and</strong> Inklaar 2005). From a policy perspective, the concept of <strong>Information</strong> <strong>and</strong> knowledge societies,<br />
raise the awareness of the need to adopt regional policies together with country‐level initiatives, since<br />
the impact is visible. In the context of ICT strategy, Albanian government has included the national<br />
strategy in the e eSEE – Agenda for the development of <strong>Information</strong> society. The goals of the National<br />
ICT Strategy are to exploit the potential of ICT in order to promote human development in the country,<br />
to support growth <strong>and</strong> sustainable development <strong>and</strong> to increase living st<strong>and</strong>ards for the whole<br />
population. The vision of Albanian strategy is based upon the principles of building an information<br />
society, because the human factor is an important asset. ICT is underpinning technology for all<br />
reforms proposed by Albanian government. Albania has already implemented the strategy document<br />
for 2002-2007 <strong>and</strong> now it is referring to the improvements in the document of 2007 -2013 which<br />
describes the general goals <strong>and</strong> defines strategic actions to achieve the goals.Major strategic areas to<br />
be addressed are:<br />
Government as Promoter, Legislator <strong>and</strong> User of ICT,<br />
Use of ICT for Education, Research, Health <strong>and</strong> Social Services.<br />
Building Infrastructure needed for an Open <strong>Information</strong> Society,<br />
Generating Economic Growth in the Private Sector,<br />
Ensuring Relevance of ICT Strategy within a Regional <strong>and</strong> European Context<br />
All the individual goals cover the areas that are important for building an information society as stated<br />
previously in the literature review.<br />
5. ICT strategy Implementation in Albania<br />
Implementation of ICT strategy has taken place in the past 9 years ( 2002 - 2011) <strong>and</strong> is still going to<br />
be fulfilled in the next two years. According to government officials interviewed in the next future there<br />
will be an extension to this strategy where the development of information society will focus more on<br />
bettering st<strong>and</strong>ard of leaving.<br />
According to the first goal of the strategy, one of the first projects undertaken in the field of ICT is<br />
government network GOVNET. Different state institutions are interconnected through a high speed<br />
fiber optic network enabling them to use financial, human resource <strong>and</strong> operation applications in<br />
different fields, such as justice, internal affairs etc. All the ministries nowadays have their own<br />
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Ermelinda Kordha <strong>and</strong> As. Kozeta Sevrani<br />
websites <strong>and</strong> an electronic database. Almost all interviewed stated that efforts made so far towards<br />
the electronic dissemination of information have had a positive impact on governance transparency<br />
<strong>and</strong> quality of information is improved.<br />
There are several initiatives in the e-business environment. New businesses can register <strong>and</strong> perform<br />
all their administrative duties, electronically. E-procurement initiative has become fully active but the<br />
expectations about its effectiveness are not materialized as they should. With reference to the ebanking<br />
initiatives, almost all the banks are applying their e-banking tools <strong>and</strong> solutions for their<br />
customers. But not all customers are fully <strong>using</strong> these services. Small <strong>and</strong> medium enterprises have<br />
been trained about ICT know-how <strong>and</strong> development, basic hardware <strong>and</strong> software usage through<br />
different projects. However, some of project managers <strong>and</strong> business leaders stated that businesses<br />
should still be prepared <strong>and</strong> updated for the latest technological ICT developments <strong>and</strong> innovations.<br />
Implementation of these projects as part of fulfilling National ICT strategy has shown also some<br />
problems. One of them is the ICT infrastructure expansion. Although the private sector of ICT is<br />
developing, there is still lack of ICT infrastructure especially in rural areas due to the big amount of<br />
investment needed. So companies that are investing in ICT infrastructure as part of their business,<br />
should be incentivized to better their investing strategies. Another area of further improvement must<br />
be the continuous training of users (businesses <strong>and</strong> individuals) to keep in touch with latest<br />
technologies. Especially business should be incited to use more in depth ICTs with the aim of<br />
bettering their businesses. Not only spread <strong>and</strong> diffusion but also technology penetration must be<br />
considered in this regard.<br />
Data gathered from the interviewees showed that there are some best practices within Albanian<br />
companies <strong>using</strong> ICT. These cases <strong>and</strong> the gaining of competitive advantages must be emphasized<br />
in the next action plans involving businesses. While Individual users need actions involving prices <strong>and</strong><br />
availability of services regarding ICT use <strong>and</strong> access.<br />
6. Conclusions<br />
The information society is seen as one of the most important vehicles for seamless integration into the<br />
European Union. The Government of the Republic of Albania recognizes that the implementation of<br />
ICT is leading, although with some problems toward the information society in Albania. <strong>Information</strong><br />
<strong>and</strong> Communication Technologies have just started to have a bigger attention from the business<br />
community. There is still to be done in terms of ICT infrastructure development <strong>and</strong> ICT SME usage,<br />
to compete regionally or internationally. The factors that should be taken in further consideration are<br />
the human capacities <strong>and</strong> skills, the business environment, <strong>and</strong> ICT infrastructure. Relationship<br />
between <strong>Information</strong> society indicators <strong>and</strong> these factors will be subject of research.<br />
References<br />
Cogburn, D. (2001) ‘Globalization <strong>and</strong> the information economy: Challenges <strong>and</strong> opportunities for Africa’.<br />
available at www.dbsa.org/publications/ictpolsa <strong>and</strong> www.ap.org/books/ictpolsa.<br />
“eSEE (2002) – European Agenda for Development of <strong>Information</strong> society, SEE conference on Cooperation <strong>and</strong><br />
telecommunication policies http://www.eseeuropeconference.org/agenda.html<br />
Evers, H. (2003). Transition towards a <strong>Knowledge</strong> Society: Malaysia <strong>and</strong> Indonesia in Comparative Perspective.<br />
Comparative Sociology, Vol2, Issue 1, pp.355-373.<br />
Karvalics, Z. L. (1997) Emergence <strong>and</strong> characteristics of information strategies. Chances <strong>and</strong> possibilities of<br />
Hungary with special reference to the EU-integration, Available from:<br />
www.tar.hu/isip/itip/ZKL_infstrat_miajovo.doc Accessed: 2010-04-15<br />
Marker, P., McNamara, K. <strong>and</strong> Wallace, L. (2002) ‘The significance of information <strong>and</strong> communication<br />
technologies for reducing poverty’, Department for International Development, London,<br />
Markle Foundation, (2003), Global Digital Opportunities: National Strategies of “ICT for Development”<br />
OECD, (2003) ICT <strong>and</strong> economic growth: Evidence from OECD countries, industries <strong>and</strong> firms.<br />
OECD (2009), Re-thinking e-government services, user centered approaches, OECD (Paris).<br />
Trujillo-Mendoza, M. (2001) ‘The global digital divide: Exploring the relation between core national computing <strong>and</strong><br />
national capacity <strong>and</strong> progress in human development over the last decade’, Doctoral dissertation,;<br />
available at http://studentweb.tulane.edu/~mtruill/index-phddiss.html<br />
UNESCO Asia <strong>and</strong> Pacific Regional Bureau for Education (2004) Guidebook 1 - ICTs in Education <strong>and</strong><br />
Schoolnets. Retrieved from: http://www.unescobkk.org/fileadmin/user_upload/ict/ebooks/SchoolNetKit/guidebook1.pdf<br />
621
A Bottom-Up Approach for the Representation <strong>and</strong><br />
Continuous Update of Technology Architectures<br />
João Soares, José Tribolet <strong>and</strong> André Vasconcelos<br />
Instituto Superior Técnico, Lisboa, Portugal<br />
INESC Inovação, Lisboa, Portugal<br />
joao.s.soares@ist.utl.pt<br />
jose.tribolet@ist.utl.pt<br />
<strong>and</strong>re.vasconcelos@ist.utl.pt<br />
Abstract: In organizations where there are not any concerns about updating <strong>Information</strong> Systems Architecture<br />
(ISA) models in a strict <strong>and</strong> automatic fashion, business requirements <strong>and</strong> pressures frequently lead to an<br />
increasing gap between current <strong>Information</strong> Systems <strong>and</strong> the latest version of their ISA <strong>and</strong>, in particular, their<br />
Technology Architecture (TA) models, when they exist. One of the causes for the lack of “investment" in TA<br />
models is the considerable effort required to “discover" infrastructural features that serve as input to the<br />
development of architectures. This work is focused on devising a bottom up approach for the representation <strong>and</strong><br />
continuous update of TAs <strong>using</strong> tools to automatize the discovery of architectural evidences (such as logs or<br />
network events) <strong>and</strong> a process based on the annotation mechanism to enable interaction contexts that allow<br />
actors to make explicit their knowledge about their activities through graphic representations.<br />
Keywords: information systems architecture, technology architecture, bottom-up, continuous update,<br />
autodiscovery<br />
1. Introduction<br />
Nowadays, as result of a crescent globalization, competition among organizations is becoming more<br />
<strong>and</strong> more driven by its capacity <strong>and</strong> flexibility of reorganization <strong>and</strong> redesign of business processes<br />
<strong>and</strong> business strategies.<br />
Some of the implications that arise from the need to reorganize <strong>and</strong> redesign business processes <strong>and</strong><br />
business strategies reflect themselves on the dem<strong>and</strong> for <strong>Information</strong> Technologies able to support<br />
those new requirements. Enterprise Architecture (EA) <strong>and</strong> the explicitness of an ISA have a key role<br />
in the construction of ISs that aim to contribute proactively to the alignment between business realities<br />
<strong>and</strong> <strong>Information</strong> Technologies realities (L<strong>and</strong>, M. et al, 2008).<br />
This investigation will be focused in a more restrict problematic inside EA: the reality regarding<br />
technologies managed by organizations to support their processes. At a first glance, this work will<br />
cover three great issues: the capture of that reality, the mapping between the results of the capture<br />
<strong>and</strong> architectural models <strong>and</strong> finally, the continuous update of those models.<br />
This document is divided in 5 chapters. Chapter 2 establishes the objectives, motivations <strong>and</strong><br />
contributions of this work. Chapter 3 is about the State of the Art. In chapter 4 there is a description of<br />
the architecture of the solution <strong>and</strong> finally, chapter 5 has conclusions over the work developed until<br />
now.<br />
2. Research problem<br />
Although there is a common agreement in the advantages <strong>and</strong> potential arising out of the<br />
specification of an ISA, it is still not possible to represent that architecture at different levels <strong>and</strong> their<br />
relationship with the business model in a st<strong>and</strong>ardized, universal, simple <strong>and</strong> simultaneously with the<br />
richness <strong>and</strong> rigor required for subsequent inspection <strong>and</strong>/or simulation of different business<br />
scenarios <strong>and</strong> technology (Boar, 1999). More specifically, there is lack of global knowledge of the<br />
current ISA, nor are there any automatic methodologies or processes defined to collect <strong>and</strong> identify<br />
architectural evidences. Those evidences would then be a valid input to the construction of a TA,<br />
resulting in a bottom-up approach, as individual base elements of the system are first specified in<br />
great detail. Taking this context as a starting point, the fact that drives this work lies in precisely the<br />
lack of a global knowledge <strong>and</strong> collaborative update of the current ISA models in current<br />
organizations. The questions that frame this investigation can then be decomposed into other three<br />
modular questions:<br />
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João Soares, José Tribolet <strong>and</strong> André Vasconcelos<br />
"What architectural evidences should be considered in order to construct a TA?"' The answer to<br />
this question will lead to a well defined set of architectural evidences, ranging from, e.g., simple<br />
logs produced by servers, to network events. The approach to do so, will take into account<br />
different IT contexts.<br />
"How to automatically collect <strong>and</strong> identify architectural evidences" This is one of the challenges of<br />
this work, because it will allow an efficient, fast <strong>and</strong> ruled collection of data, which will be a major<br />
improvement regarding the creation of TAs from scratch. On the other h<strong>and</strong>, in cases where<br />
architectures are already modeled, will allow them to be much more maintainable since the<br />
process of incorporating changes will be much more agile.<br />
"How to map architectural evidences into updated, trustworthy <strong>and</strong> reliable TA models?"' The<br />
answer to this question urges because there is a recognized difficulty in maintaining models<br />
updated <strong>and</strong> aligned with the reality.<br />
3. Related work<br />
3.1 EA methods <strong>and</strong> frameworks<br />
The aim of this section is to introduce <strong>and</strong> describe some of the tools that enterprise architects use to<br />
underst<strong>and</strong> <strong>and</strong> document the structure <strong>and</strong> dynamics of an enterprise. The investigation that<br />
constitutes the backbone of this article contemplated <strong>and</strong> compared other Frameworks like Zachman<br />
Framework (Zachman, J., 2008), TOGAF (TOGAF, 2009), etc., but, for the sake of brevity <strong>and</strong> to<br />
emphasize their relevance, only two of them will be presented here.<br />
3.1.1 ArchiMate<br />
ArchiMate’s aim is to support the description, analysis <strong>and</strong> visualization of EA with special focus on<br />
inter-domain relations, i.e., it provides the possibility to model the main elements (<strong>and</strong> their<br />
dependencies) within each domain <strong>and</strong> the relations between different domains , a feature that other<br />
description languages don't have (Lankhorst, M. et al., 2009). The core concept in ArchiMate is the<br />
service concept. A service is a unit of functionality that some entity makes available to its<br />
environment. This leads to a layered view of enterprise architecture models, where the service<br />
concept is one of the bridges between different layers. ArchiMate concepts are organized in three<br />
layers: Business Layer, Application Layer <strong>and</strong> Technology Layer.<br />
One of the strengths of ArchiMate is the powerful potential to align <strong>and</strong> link subsets of EA. This facet<br />
is particularly interesting in the context of the organizations addressed by this work, because there is<br />
a lack of knowledge of a global ISA.<br />
3.1.2 Framework CEO 2007<br />
This framework (Vasconcelos, 2007) features a taxonomy of concepts used to define an ISA<br />
(architectural primitives). The meta-model of Framework CEO 2007 is organized in the following<br />
architectures: Business<br />
Architecture<br />
Architecture, Organizational Architecture <strong>and</strong> <strong>Information</strong> Systems<br />
This framework will serve as the conceptual basis for the description of TAs <strong>and</strong> ISAs during this<br />
work, because it was developed in the context of the group CODE 1 , as this work is.<br />
3.2 Application discovery <strong>and</strong> dependency mapping<br />
Application discovery is the process of automatically analyzing artifacts of a software application.<br />
Dependency Mapping creates visibility between applications <strong>and</strong> infrastructure dependencies.<br />
Leveraging the power of automation, automated application discovery <strong>and</strong> subsequent dependency<br />
mapping, can capture, connect <strong>and</strong> unveil intricate relationships including the way in which<br />
applications behave <strong>and</strong> relate to the TA on which they rely. Automated application discovery<br />
normally leverages an effective non-agent-based discovery method - passive discovery - to<br />
automatically discover the structural <strong>and</strong> behavioral aspects of applications. Passive discovery<br />
operates by watching the network traffic, examining all the applications as they execute, <strong>and</strong> then<br />
identifying relationships based on real business usage. Some products often use a hybrid approach,<br />
1 Center for Organizational Design <strong>and</strong> Engineering - INESC<br />
623
João Soares, José Tribolet <strong>and</strong> André Vasconcelos<br />
where active discovery is also used to enable the collection of deep <strong>and</strong> fundamental data about<br />
configuration details.<br />
3.3 A dynamic update process<br />
The present section is about describing a process to continuously update an enterprise model.<br />
(Castela, N. et al., 2010). In the process explained in this section, organizational actors act as active<br />
updaters of the AS-IS model, through the comparison between the modeled activities <strong>and</strong> the ongoing<br />
real executed activities, becoming key agents in reducing the gap between the organization <strong>and</strong> its<br />
representation.. The following text expresses the essence of PROASIS (business process model<br />
dynamic updating process): “The “client" of PROASIS (corresponding role of the operational model<br />
that detects misalignment between the model <strong>and</strong> "reality") wants to update the model, so it makes an<br />
annotation (update request). This update request is received by the modeler (which is who actually<br />
update the model if the annotation is approved) <strong>and</strong> by the reviewers. When reviewers receive the<br />
annotation, they can begin the revision of the annotation (which is optional). The approval of the<br />
annotation is made based on the analysis of the annotation (update request) <strong>and</strong> reviews. If the<br />
annotation (request update) is approved, the model will be updated <strong>and</strong> delivered to the “client"".<br />
Besides the fact that PROASIS is suited to business processes, they can be adapted in this work in<br />
order to map architectural evidences into updated, trustworthy <strong>and</strong> reliable TA models. The idea of<br />
<strong>using</strong> an extended version of PROASIS in this work enables a collaborative maintenance of the TA<br />
models originally incipiently build <strong>using</strong> mechanisms of autodiscovery. On the other h<strong>and</strong>, PROASIS<br />
<strong>and</strong> the annotation mechanism could be used in an earlier stage: to “decide" within an organization,<br />
what would be the most commonly accepted language to represent TAs.<br />
4. Solution's architecture <strong>and</strong> methodology<br />
This chapter is about describing the steps that the solution's architecture will follow. According to the<br />
questions that constitute the problem that drive this investigation, as well as the set of proposed<br />
contributions <strong>and</strong> all the related work described earlier, following, there is a description of each<br />
stage/l<strong>and</strong>mark of the proposed solution facing the initial motivation to this problem:<br />
Contexts: It is the phase where different relevant contexts (entities that manage IT assets) are<br />
analyzed in order to propose a structure of concepts to describe the manifestations of IS <strong>and</strong> its<br />
TA exhibited through architectural evidences, considering terms introduced by CEO 2007<br />
framework.<br />
Analysis & Evaluation: In this stage, two activities take part:<br />
Analysis of framework CEO 2007 regarding its capability of expressing detailed TA aspects (e.g.,<br />
regarding network connections, firewalls, etc.).<br />
Analysis of Application Discovery tools regarding its extensibility potential.<br />
Products": This is the phase where “visible work" is done regarding three facets:<br />
CEO 2007: TA extensions; Mapping between the structure of concepts; Adaptation of the<br />
continuous cycle of monitoring <strong>and</strong> verification of the IS <strong>and</strong> verification of its TA reality to the<br />
reality of automatic discover of architectural evidences <strong>and</strong> continuous collaborative update.<br />
Application discovery tools: Necessary extensions.<br />
PROASIS: Adaptation to TA representation <strong>and</strong> maintenance.<br />
The architecture of the desired bottom up approach can then be described briefly in three steps:<br />
Use PROASIS prior to any representation, to agree, inside an organization, on the notation to<br />
represent the TA.<br />
Perform autodiscovery<br />
Use PROASIS as repository to the early representations <strong>and</strong> tool to support collaborative update.<br />
5. Conclusions<br />
EA (ISAs <strong>and</strong> TAs in particular) are regularly relegated to a secondary role in the context of<br />
organizations, due to factors such as counterculture; it is not considered as an essential piece<br />
regarding the organization's survival; it is a job that consumes a certain amount of time <strong>and</strong> requires<br />
considerable e ort, <strong>and</strong> the companies, eager to get quick results, tend to see architecture as an e ort<br />
too high with too many actors involved within the organization. This work began by the clarification of<br />
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João Soares, José Tribolet <strong>and</strong> André Vasconcelos<br />
the problem together with the motivations <strong>and</strong> contributions towards the solution. Regarding the<br />
related work, several EA Methods <strong>and</strong> Frameworks were revisited according to the potential to be<br />
used in this investigation as well as Application Discovery tools (to quickly capture the infrastructural<br />
reality of an organization) <strong>and</strong> a process to enable collaborative update of TA models. The course of<br />
this investigation will follow the steps described in the previous section to achieve a bottom up<br />
approach.<br />
References<br />
Boar, B. (1999). Constructing Blueprints for Enterprise IT Architecture. New York: John Wiley & Sons.<br />
Castela, N. et al. (2010). Business Process Model Dynamic Updating. CENTERIS 2010 .<br />
L<strong>and</strong>, M. et al. (2008). Enterprise Architecture (The Enterprise Engineering. Springer.<br />
Lankhorst, M. et al. (2009). Enterprise Architecture at Work. Heidelberg: Springer.<br />
TOGAF. (2009). TOGAF Version 9. Van Haren Publishing.<br />
Vasconcelos, A. (2007). Arquitecturas dos Sistemas de Informação: Representação e Avaliação. Instituto<br />
Superior Técnico.<br />
Zachman, J. (2008). John Zachman's Concise Definition of the Zachman Framework. Zachman International.<br />
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