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Information Management IACT417/917

Information Management Information Management in in eBusinesseBusiness

Week 7Week 7

Lecturer/Coordinator:Lecturer/Coordinator:Glenn BewsellGlenn Bewsellgbewsell@uow.edu.augbewsell@uow.edu.au3.1093.109

PurposePurpose

Apply information and knowledge Apply information and knowledge management theory used in this course to management theory used in this course to ee--business.business.See how useful are Knowledge Management See how useful are Knowledge Management and Information Management frameworks and Information Management frameworks for understanding efor understanding e--businessbusinessDraw some unusual conclusionsDraw some unusual conclusionsFinish with a look at orthodox information Finish with a look at orthodox information management practice management practice –– Continuous Continuous improvement and Total Quality Managementimprovement and Total Quality Management

Common eCommon e--business business themesthemes

Business Model

Three majorchanges from

traditionalbusiness toe-business

OrganizationalStructure Technology

1. Technologies1. Technologies

Internet Technologies are at the heart Internet Technologies are at the heart of eof e--business.business.Communication is not confined by time Communication is not confined by time and place. and place. Consequently, there are changes in Consequently, there are changes in the way information is acquired, the way information is acquired, distributed and used. distributed and used.

2. Business models2. Business modelsUnlike traditional business, the eUnlike traditional business, the e--business business environment is dynamic, nonenvironment is dynamic, non--linear and linear and flexibleflexibleNew forms of products and services are New forms of products and services are offeredofferedFrom mass production to mass From mass production to mass customisationcustomisationEmphasis is given to optimising the Emphasis is given to optimising the information chain (as opposed to a single information chain (as opposed to a single focus on the physical value chain)focus on the physical value chain)

3. Organisational 3. Organisational structurestructureNetworked organisational structures are Networked organisational structures are more flexible and adaptive. E.g virtual more flexible and adaptive. E.g virtual organisationsorganisationsTraditional business

Hierarchical Organization Structure

Flat Organization Structure

eBusiness

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Changes in organisation Changes in organisation structurestructureOrganisational structures can be Organisational structures can be viewed as channels for information viewed as channels for information distribution.distribution.This has implications for the ways in This has implications for the ways in which individuals learn and knowledge which individuals learn and knowledge is createdis created

Assumptions/LimitationsAssumptions/Limitations

Paper does not distinguish between Paper does not distinguish between Knowledge Management and Knowledge Management and Information Management frameworksInformation Management frameworksInformation related activities of Information related activities of business, are broken down into 1. business, are broken down into 1. acquisition, 2. distribution and 3. use.acquisition, 2. distribution and 3. use.

Use DistributionAcquisition

1a. Information 1a. Information acquisition acquisition -- Determining Determining requirementsrequirements–– Question.. How does one know what one Question.. How does one know what one

does not know? does not know? –– In the absence of theory, rules or recipes In the absence of theory, rules or recipes

to guide actions in an eto guide actions in an e--business business environment what options are open to environment what options are open to the manager? the manager?

AckoffAckoff’’ss Decision ModelDecision Model

Models are available and optimal solution can be specified.

Models are available but optimal solutions cannot be specified.

Models are not available and optimal solution cannot be specified.

Explicit Knowledge

Tacit Knowledge

Adapted from Ackoffs (1967) analysis of the decision system

Information acquisitionInformation acquisition

Insufficient internal knowledge means that Insufficient internal knowledge means that external information sources are external information sources are fundamentally importantfundamentally importantThis is reflected in the importance of This is reflected in the importance of telecommunications to achieving strategic telecommunications to achieving strategic advantageadvantageIf If AckoffAckoff’’ss model is to be relied upon, much model is to be relied upon, much of this external information is personalised of this external information is personalised in the experience of suppliers, customers, in the experience of suppliers, customers, associates etc.associates etc.

External Information External Information AcquisitionAcquisitionNonakaNonaka’’ss knowledge management knowledge management matrix provides an avenue to better matrix provides an avenue to better understand the issues at stake.understand the issues at stake.

ExternalisationSocialisation

Internalization Combination

Tacit to Explicit

from

Explicit

Tacit

Nonaka’s (2000) knowledge management matrix

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NonakaNonaka’’ss knowledge knowledge frameworkframeworkExplicit to Explicit knowledge transformation Explicit to Explicit knowledge transformation (combination process) The combination or (combination process) The combination or reconfiguring of existing information by reconfiguring of existing information by adding, sorting and categorising in order to adding, sorting and categorising in order to create new explicit knowledge. create new explicit knowledge. Explicit knowledge to tacit knowledge Explicit knowledge to tacit knowledge (internalisation process). This is where (internalisation process). This is where individuals apply explicit knowledge from individuals apply explicit knowledge from books, manuals and procedures through a books, manuals and procedures through a process of experimentation.process of experimentation.

NonakaNonaka’’ss knowledge knowledge frameworkframeworkTacit to tacit conversion (socialisation) Tacit to tacit conversion (socialisation) Examples of the socialisation process Examples of the socialisation process include conversations between work include conversations between work colleagues and supervisors, learning by colleagues and supervisors, learning by copying, copying, ‘‘warwar’’ stories and gossip. stories and gossip. Tacit to Explicit conversion (externalisation). Tacit to Explicit conversion (externalisation). The capture and codification of tacit The capture and codification of tacit knowledge into more explicit knowledge knowledge into more explicit knowledge forms such as documented procedures, forms such as documented procedures, rules and theories.rules and theories.

Implications of Implications of NonakaNonaka

Social context emerges as being Social context emerges as being fundamental to two of the knowledge fundamental to two of the knowledge conversion processes that involve tacit conversion processes that involve tacit knowledge.knowledge.Macdonald claims that social context is Macdonald claims that social context is fundamental to forming the kinds of fundamental to forming the kinds of personalised relationships that are best able personalised relationships that are best able to transfer tacit knowledgeto transfer tacit knowledgeThe problem of The problem of ““social distancesocial distance”” is a is a significant challenge for esignificant challenge for e--businessbusiness

Solutions and Challenges Solutions and Challenges

•• Knowledge is personalised Knowledge is personalised within individualswithin individuals•• External information External information sources are important sources are important (competitors, suppliers and (competitors, suppliers and customers)customers)•• Social context is required to Social context is required to enable tacit knowledge enable tacit knowledge transfertransfer

−−Informal Information Informal Information networks promote networks promote mutualitymutuality−−Trust built on personal Trust built on personal relationships is an relationships is an essential ingredientessential ingredient

•• Environment of rapid change Environment of rapid change •• Lack of theory for guidanceLack of theory for guidance•• Acquisition of Acquisition of ‘‘richrich’’information (Information information (Information overload)overload)

Information Information Acquisition Acquisition

Lessons from KMLessons from KMChallengesChallengesKM aspectsKM aspects

2. Information 2. Information distributiondistributionAdvances in IT enables greater Advances in IT enables greater flexibility and improves information flexibility and improves information distribution.distribution.–– Intranets, ExtranetsIntranets, Extranets

However, Davenport and However, Davenport and PrusackPrusack(1997) warn that networked (1997) warn that networked organisational structures can have organisational structures can have downsides for edownsides for e--business managersbusiness managers

Information distributionInformation distribution

As we move towards less central control it is As we move towards less central control it is possible that epossible that e--business may lose control of their business may lose control of their corporate information. corporate information. –– Security becomes significant issue. Security becomes significant issue.

Dependence on knowledge workers can create Dependence on knowledge workers can create problems as these people are generally more problems as these people are generally more autonomous and less amendable to control.autonomous and less amendable to control.

Continuum of Information Control (Daveport et al. 1997)

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Solutions and ChallengesSolutions and Challenges

•• Use of advance Use of advance technologies in information technologies in information distribution in global scale. distribution in global scale.

•• Enhance web Enhance web functionalities to support functionalities to support pull strategy pull strategy

•• Need to balance Need to balance information sharing against information sharing against information securityinformation security

•• Flexibility v controlFlexibility v controlInformation Information DistributionDistribution

Lessons from KMLessons from KMChallengesChallengesKM KM aspectsaspects

3. Information use3. Information use

Knowledge creationKnowledge creation–– Efficient use of information to create knowledge Efficient use of information to create knowledge

improves competitive advantage in an uncertain improves competitive advantage in an uncertain environment. environment.

The dynamic business environment means that knowledge The dynamic business environment means that knowledge has a shorter life cycle. has a shorter life cycle.

–– Primary challenge is in codifying the experience of Primary challenge is in codifying the experience of individuals to enable the broader organisation to individuals to enable the broader organisation to benefit.benefit.

–– If we look again to If we look again to NonakaNonaka, this requires a social , this requires a social context in order for this to occur (context in order for this to occur (ieie tacit to explicit tacit to explicit knowledge conversion) knowledge conversion)

Solutions and ChallengesSolutions and Challenges

•• Knowledge creation Knowledge creation strategies must remain a strategies must remain a central focuscentral focus

•• Knowledge workers play Knowledge workers play a crucial role in ea crucial role in e--businessbusiness

•• Ensure downsizing does Ensure downsizing does not destroy knowledge not destroy knowledge assetsassets

•• Strategies required to Strategies required to ‘‘createcreate’’ social contextsocial context

•• Short life cycle of Short life cycle of knowledgeknowledge

•• Transformation of tacit to Transformation of tacit to explicit knowledgeexplicit knowledge

InformationInformationUse Use

Lessons from KMLessons from KMChallengesChallengesKM KM aspectsaspects

ConclusionConclusion

The implications of KM on eThe implications of KM on e--business business areare……–– ICTsICTs are still the primary enabler of eare still the primary enabler of e--business business

success.success.

However, However, –– recognition of the important role social networks recognition of the important role social networks

may explain some barriersmay explain some barriers–– The need to acquire external information (often The need to acquire external information (often

locked up within the experience of people) and locked up within the experience of people) and efficiently transform this into usable and efficiently transform this into usable and accessible knowledge is a formidable challenge.accessible knowledge is a formidable challenge.

ConclusionConclusion

–– FinallyFinally……One needs to consider the appropriateness of One needs to consider the appropriateness of organisational structures in terms of the kind organisational structures in terms of the kind of activities the business will need to of activities the business will need to undertake in order to be successful.undertake in order to be successful.The corollary to this, any eThe corollary to this, any e--business strategy business strategy that is propelled by a technology dynamic in that is propelled by a technology dynamic in isolation from the potential market the isolation from the potential market the strategy will serve is inherently risky.strategy will serve is inherently risky.

ReferencesReferencesAckoffAckoff, R.L. (1967) Management Misinformation Systems, , R.L. (1967) Management Misinformation Systems, Management Science, 14(4) pp B147Management Science, 14(4) pp B147-- B157 B157 Earl, M. (2001) Knowledge Management Strategies: Towards Earl, M. (2001) Knowledge Management Strategies: Towards a Taxonomy, 18(1), pp 215a Taxonomy, 18(1), pp 215--233233DaneshgarDaneshgar, F. (2005) Awareness Matters in Virtual , F. (2005) Awareness Matters in Virtual Communities: An Awareness Ontology, In B. Montano (ed.) Communities: An Awareness Ontology, In B. Montano (ed.) Innovations of Knowledge Management, IRMA Press, Innovations of Knowledge Management, IRMA Press, Hershey: USA pp 51Hershey: USA pp 51--68 68 NonakaNonaka, I. (2000) A Dynamic Theory of Organization , I. (2000) A Dynamic Theory of Organization Knowledge Creation, in D. Smith (ed.) Knowledge Groupware Knowledge Creation, in D. Smith (ed.) Knowledge Groupware and the Internet, Butterworth Heinemann, USA, pp 1and the Internet, Butterworth Heinemann, USA, pp 1--4242VatanasakdakulVatanasakdakul, S. & , S. & TibbenTibben, W. (2002) An analysis of , W. (2002) An analysis of implications of knowledge management for eimplications of knowledge management for e--business, business, Proceedings of the 7th conference on Collaborative Electronic Proceedings of the 7th conference on Collaborative Electronic Commerce Technology and Research (Commerce Technology and Research (CollECTeRCollECTeR))

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EE--business and TQMbusiness and TQM

Many of the changes to business Many of the changes to business models are being negotiated through models are being negotiated through quality management methodologiesquality management methodologiesReflected in the jargon:Reflected in the jargon:–– Continuous improvement, benching Continuous improvement, benching

marking, service level agreements, marking, service level agreements, ISO9000 ISO9000

Continuous ImprovementContinuous Improvement

The emphasis is on improving customer The emphasis is on improving customer satisfaction through continuous and satisfaction through continuous and incremental improvements to processesincremental improvements to processesBench MarkingBench Marking: : ‘…‘…Using standard Using standard measurements in a service or industry for measurements in a service or industry for comparison to other organizations in order comparison to other organizations in order to gain perspective on organizational to gain perspective on organizational performanceperformance…’…’ ((McNamara)McNamara)

Total Quality Total Quality ManagementManagementTQM is essentially an information TQM is essentially an information management approachmanagement approachGeneric term applied to quality practices Generic term applied to quality practices which represent a means for quantum which represent a means for quantum improvements.improvements.Originally based on DemingOriginally based on Deming’’s methodology, s methodology, modern TQM is envisioned as a mean to modern TQM is envisioned as a mean to accomplish radical change & improvement.accomplish radical change & improvement.

Deming PhilosophyDeming Philosophy

W. Edward DemingW. Edward Deming’’s principles for quality s principles for quality management earned international management earned international prominence for quality standardsprominence for quality standardsAlthough American, DemingAlthough American, Deming’’s methods were s methods were initially adopted in Japan. By the mid 1970s initially adopted in Japan. By the mid 1970s Japanese companies began to undermine Japanese companies began to undermine American & European competitors.American & European competitors.Western industrialists then began taking Western industrialists then began taking Deming seriously.Deming seriously.By the 1980s DemingBy the 1980s Deming’’s methodologies s methodologies achieved widespread recognition in the U.S.achieved widespread recognition in the U.S.

DemingDeming’’s Fourteen Pointss Fourteen Points1.1. Create constancy of Create constancy of

purpose for improvement of purpose for improvement of product & service.product & service.

2.2. Adopt the new philosophy.Adopt the new philosophy.3.3. Cease dependence upon Cease dependence upon

mass inspection to achieve mass inspection to achieve quality.quality.

4.4. End the practice of End the practice of awarding business on the awarding business on the basis of price tag alone.basis of price tag alone.

5.5. Improve constantly & Improve constantly & forever every process & forever every process & system.system.

6.6. Institute training on the Institute training on the job.job.

7.7. Adopt & institute Adopt & institute leadership.leadership.

8.8. Drive out fear.Drive out fear.9.9. Break down barriers Break down barriers

between staff areas.between staff areas.10.10. Eliminate slogans, Eliminate slogans,

exhortations and targets for exhortations and targets for the workforce.the workforce.

11.11. Eliminate numerical quotas, Eliminate numerical quotas, goals and controls for the goals and controls for the workforce.workforce.

12.12. Remove barriers that rob Remove barriers that rob people of pride of people of pride of workmanship.workmanship.

13.13. Institute various programs Institute various programs of education & selfof education & self--improvement.improvement.

14.14. Put everyone to work to Put everyone to work to accomplish the accomplish the transformation.transformation.

Identify which of the 14 points of Identify which of the 14 points of Deming can be linked to knowledge Deming can be linked to knowledge creation.creation.

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Quality StandardsQuality Standards

Concept of incrementally improving Concept of incrementally improving competitive performance through products competitive performance through products & services is not new.& services is not new.Issuance of formal standards & the adoption Issuance of formal standards & the adoption of those standards as a prerequisite for of those standards as a prerequisite for doing business is new.doing business is new.Some organisations will only do business Some organisations will only do business with other organisations which comply with with other organisations which comply with ISO 9000 quality standardsISO 9000 quality standards

ITILITIL--Information Information Technology Technology Infrastructure LibraryInfrastructure LibraryA set of documents developed in the A set of documents developed in the UK during the late 1980s for the UK during the late 1980s for the management of IT infrastructuremanagement of IT infrastructureComplements ISO9000Complements ISO9000--3 QMS 3 QMS -- the the development, supply, installation and development, supply, installation and maintenance of computer hardware maintenance of computer hardware Is a generic framework for the Is a generic framework for the management of IT.management of IT.

ITIL is focused onITIL is focused on……..

ITIL is focused on service delivery ITIL is focused on service delivery ––measured using business metrics measured using business metrics rather than traditional IT metricsrather than traditional IT metricsManages end to end spectrum of Manages end to end spectrum of process, technology and servicesprocess, technology and servicesDeveloping best practice in Developing best practice in

1.1. Software and hardware systemsSoftware and hardware systems2.2. Business processesBusiness processes

Service

Sup

port

Service

Deli

very

Vision

/miss

ionPolicies

Procedures

Processes

Service level ManagementAvailability managementCapacity ManagementIT Service Continuity ManagementFinancial Management

Incident managementProblem managementChange managementConfiguration managementRelease management

Structure v FlexibilityStructure v Flexibility

The issue of finding the right balance The issue of finding the right balance between structure and flexibility is between structure and flexibility is more important than ever.more important than ever.It is clear that one cannot exist It is clear that one cannot exist without the other.without the other.This weeks reading looks at this This weeks reading looks at this problem from the perspective of problem from the perspective of ““organisational architectureorganisational architecture””. .