& Editorial

Tackling the Coming Slowdown?

I am all too aware that the euphoria associatedwith eCommerce and eBusiness has dissipatedover the last six months. Many traditional com-panies have begun to pull back on their invest-ments in Information Technology and, inparticular, eBusiness. This is short sighted. Manyof these businesses still have a long way to go tointegrate the information that is already availableacross the organization. This integration is criticalto improving their competitiveness and achievingthe first stage in the path to knowledge creation.Without the ability to collect and distributeaccurate information there is little hope that anorganization can focus on the customer or get togrips with the knowledge that it MUST have toboth survive the coming slowdown (recession?)and the inevitable recovery that follows.

There is also disturbing evidence that companieshave not used the good years as a time to developprocesses that will allow them to improve theirability to deliver, among other things, qualitycustomer service. Many processes have not beenredesigned over the last few years. True, therehave been massive investments in InformationTechnology and much brouhaha about risingproductivity but relatively little evidence that, asa whole, processes have been radically redesigned.The jury is still out but there are some indicationsthat the productivity improvements over the lastfew years are somewhat soft — being at leastpartly due to increased hours worked by existingemployees rather than sustainable productivityimprovements. Not only that but there is evidencethat many industrial and individual customersare less satisfied with the products and servicesthat they are receiving than they were in the mid 90s.

Whatever the extent of the changes that have orhave not been wrought in business processes overthe last few years I must admit that I see somereflection of the early euphoria with BusinessProcess Reengineering (BPR) raising its headagain in some of the breathless talk about eCom-merce and eBusiness. Fairly quickly it becameclear that one of the problems with BPR was that itignored many of the complexities of people,processes and organizations in a rather spectacularway. It seems to me that all our talk of theenormous potential of eCommerce and eBusinessalso ignores some of these complexities.

As just one example let me consider the case ofwhat are now called eHubs — electronic meetingplaces for participants in a particular industry. Theidea is that buyers and sellers of goods andservices to the industry will come together toconduct business electronically. In addition tobuying and selling they will consult with eachother, share information on industry develop-ments, share and develop leads and so on. In thisway the eHub will become an electronic commu-nity. It is also envisaged that the industry partici-pants will make use of the eHub to integrate theirprocesses and gain access to Application ServiceProviders. The evidence so far is that few of theseHubs have been successful and those that havemade some strides in that direction have been theprivate Hubs rather than the public Hubs. What isthe explanation for this apart from the generalmalaise of eCommerce and eBusiness?

In the first place it is one thing buildingeMarketplaces where it is ‘only’ necessary toswap information about products and services.To create an eHub that supports an integrated setof processes that span organizations it is necessaryto share considerable amounts of information inreal time about processes and products. To achievean appropriate level of integration between theinformation systems of the participating organiza-tions is no mean feat even today. True we havemiddleware to link legacy systems to the Web butmiddleware is still often tailored to particularlegacy software and applications. As a side noteit is interesting that as soon as we achieve theability to standardize and integrate at one level ofcomplexity we immediately demand standardiza-tion and integration at an altogether higher level ofcomplexity!

The second reason why eHubs are having suchdifficulty getting off the ground relates, I think, tothe issue of trust. As a nexus of rich informationflow an eHub potentially ‘knows’ an enormousamount about its participant organizations. It isnot at all clear that organizations in manyindustries are prepared to trust independenteHubs to use this knowledge in the best interestsof participants. This explains, in part, the relativesuccess of private eHubs — firms want to keepfirm control of this knowledge and any value thatcan be derived from it.

Knowledge and Process Management Volume 8 Number 2 pp 63–64 (2001)DOI: 10.1002 /kpm.119

Copyright # 2001 John Wiley & Sons, Ltd.

The third reason for eHubs struggling to surviverelates to the potential for radically changing inter-organizational processes once all process relevantinformation is in electronic form. We have onlyjust begun to scratch the surface of these changesand many of the changes that have taken placehave been unsettling to existing organizations.Many traditional process architectures have im-bedded assumptions about who has the power,who has the right to certain types of information,what is economically possible and so on. Many ofthese assumptions are open to question. Increas-ingly both the individual customer and the smallbusiness customer are demanding more knowledgeand often as a direct result exerting more power.

In a satisfying way this brings me back to someof the criticisms of Business Process Reengineer-ing. Much of the early work in this area ignoredthe knowledge that was necessary to run processesand manage processes. Processes were seen asrelatively simple mechanisms which many of themwere much of the time. However, when processesbroke down or needed to be modified it suddenlybecame apparent that a vast reservoir of knowl-edge was needed — this knowledge had been builtup through the extensive experience of employeesand was not directly represented in the processesthemselves. Our euphoria with eCommerce andeBusiness again blinds us to these complexities.Suddenly we can share rich information and co-ordinate processes in ways that were undreamt ofeven a few years ago. However, we have to retain(and develop) the knowledge necessary to managethese processes. We also have to recognize theessential human dimension, the need for the trust,understanding, experimentation, and tolerance (toname but a few attributes) that make processesrobust and capable of adaptation.

Thinking about Knowledge Transfer

In my last editorial I talked about some issues thatI have recently become concerned with relating toknowledge transfer. Part of my interest has beensparked as a result of my travels to China and anincreasing interest in Environmental Health issues.I am planning to provide a more extensivediscussion of these topics in upcoming issues ofthe Journal and I would appreciate any papers,stories and anecdotes to include. In the next issueof the Journal I will set out some of the parametersof this discussion. I also plan to make a moreextensive set of materials available on the Web —more of this later.

Reviewing an Old Knowledge Medium

I have been dilatory about providing you withadequate reviews of both the old knowledgemedium of books and the extensive resourcesavailable on the Web — I will be working toremedy this deficiency over the next few issues.One of the books that I will be reviewing in thenext issue describes, in very appealing andstraightforward prose, knowledge management atBP. One delightful passage relates the problem oftrying to explain Knowledge Management to athree year old — this would seem to be a good testto subject much of our work too! The book is arefreshingly straightforward discussion of thelessons that the authors have learnt from beingintimately involved with knowledge managementinitiatives at BP. It is written by Chris Collinsonand Geoff Parcell and titled Learning to Fly(Capstone, 2001, ISBN 1-84112-124-X).

Some Interesting References

During the last few weeks I have had preciouslittle time to devote to reading. The joint pressuresof teaching and administration seem to havedominated my time mercilessly! One of the papersthat interested me was written by Michael Porter inthe most recent Harvard Business Review. WhatMichael Porter argues in his paper is that we haveforgotten in our breathless enthusiasm for all thethings associated with the Internet that strategy isstill basically strategy. Although I am not com-pletely convinced that things have not changedfrom the types of analysis that grew out of thenotions of industrial structure in the 50s, Porter’spaper provides a wealth of detail and is cogentlyargued.

I have also had an opportunity of looking over arecent issue of the Ivey magazine that is producedby the University of Western Ontario coveringIntellectual Capital. There have, of course, beenmany articles and special issues written in thisarea over the last year. The Ivey issue has someuseful articles that balance the inherent complexityof analysing and managing Intellectual Capitalwith practical concerns.

Anthony Wensley

REFERENCES

Porter Michael E. Strategy and the Internet. HarvardBusiness Review, March 2001.

Ivey Business Journal, March/April 2001, ibj@ivey.uwo.ca.

EDITORIAL Knowledge and Process Management

64 Editorial