Centre for Information & Knowledge Management
INFORMATION SYSTEMS MANAGEMENT
Jamie O’BrienCentre for Information & Knowledge
ManagementUniversity of Limerick
Lecture 5
E-mail: [email protected]
What we’ll cover today
• Knowledge Management
• The Project
Trends and Implications
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Ireland
• As of Feb 1st 2009, 325000 people on the live register
• 12% unemployment!!!
• Predicted by end of 2010, 450,000 on live register, probably will be higher
• Net emigration for the first time since 1995
• No safety valve of immigration this time!4
Introduction
• Term knowledge-based economy?
• Knowledge has always been central to economic development.....we just didn’t get behind it
• Only recently been recognised as important
• Knowledge-intensive service sectors, such as education, communications and information, are growing faster
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Introduction
• Intangible investments in research and development (R&D)
• It is skilled labour that is in highest demand in the OECD countries.
• Average unemployment rate for people with lower-secondary education is 10.5 per cent, falling to 3.8 per cent for those with university education
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Introduction
• Knowledge....knowledge knowledge?? What is it?
• Lots of definitions and opinions on this
• Types: Know-what (information), know-why (specialised), know-how (skills- surgeon) and know-who (who knows what)
• Simply: Knowledge lets us code the meaning of information. Information is meaningless unless given perspective.
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What is Knowledge
8Dave Snowden IBM, Gurteen Conference 2003
“You can’t manage what you can’t measure”
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Knowledge & Economics
• Traditional production functions focus on labour, land, capital, materials and energy (Neoclassical Economists)
• Knowledge and technology are external influences on production (Robert Solow)
• Investment in knowledge lead to long term growth (Paul Romer)
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Ireland’s Knowledge Intensity
• Derived from R&D intensity in the Business, Higher Education and Government Sectors
• Ratio of investment in knowledge to GDP was unchanged from 1997 to 2004
• R&D linked directly with knowledge and growth (Romer 1986)
• Ireland remains below the average R&D performance (14th of 17 in OECD survey ahead of Portugal and Hungary)
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Ireland’s R&D Performance: An E.U and OECD Comparison
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% GNP 2000IRELAND
% GNP 2006IRELAND
E.U. 2006 OECD 2006
Gross Expenditure
on R&D
1.32% 1.56% 1.77% 2.26%
Business Sector R&D
0.94% 1.05% 1.12% 1.54%
Higher Education
Expenditure on R&D
0.27% 0.40% In Line with E.U.
In Line with OECD
Government Sector
performed R&D
0.11% 0.11% 0.24% .27%
Total Researchers
4.8 per thousand
5.9 per thousand
- 6.9 per thousand
How can Knowledge be brought into the equation?
• Irish economy based on construction, housing, manufacturing sector.......etc
• Had all this money (our old friend, Celtic tiger) ......but forgot about knowledge...
• Now we are in a little trouble....
• What about knowledge? We have a knowlegde problem!
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So what can be done?
• Well you cant manage a problem unless you can measure a problem
• few ways of looking at knowledge!• Endogenous growth theory looks at the link
between knowledge and long term growth• Intellectual capital theory measures
intangibles• KM theory looks at audit models• OECD takes a conceptual framework approach
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Endogenous Growth Models
• Learning-by-doing models (Arrow 1962: Lucas 1988: Stokey 1988)
• Invention based models (Romer 1986: Aghion & Howitt 1992: Jones 1995)
• Hybrid models (Young 1993)
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Brief look
• Learning-by-doing: technical change (knowledge) be viewed as endogenous (internal) to the economic system and secondly for attempting to offer an account of what constitutes technical change (the active attempt to problem solve)
• Invention based models: technical change (knowledge) is seen as the product of profit maximising agents at micro level, while at macro level, knowledge is channelled into growth through increased firm efficiency and knowledge spillovers
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Measuring Intangibles (IC)
• Capital is “knowledge imposed on the material world” (Boulding 1966: 5)
• To the Physiocrats of pre-Revolutionary France, it was the surplus generated by agriculture
• Decreasing amount of economic activity now involves the manipulation of physical assets
• Intangible assets such as knowledge have instead become the dominant value driver at firm level (Low 2002: Bounfour & Edvisson 2005: Chartrand 2005)
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Intellectual Capital (IC)
For the purpose of the framework IC has been broken down into:
• Human: has been defined as the individual stock of knowledge accumulated by a firm’s employees
• Structural: refers to the procedures, systems, routines and rules that comprise the core of the firm
• Relational: encompasses knowledge that is embedded in all of the external relationships that a firm develops with its stakeholders; competitors, customers, suppliers
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Knowledge Assessment Framework (KAF)
• Derived from OECD standard indicators for knowledge, endogenous growth models, KM auditing models and Intellectual Capital
• OECD- Factors and constructs• KM- Tacit/Explicit/Implicit knowledge and
structure• EGT- Learning-by-doing/Invention • IC- Human/Structural/Relational
• For use at organisational level19
Location
• Ireland; why? Research has a sense of urgency given economic climate, R&D and knowledge deficits, access.
• High-Technology sector as defined by the OECD; why? High knowledge sector with large amounts of knowledge workers.
• Definition: comprised of computers, electronic-communications, medical device and pharmaceutical industries.
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Knowledge Assessment Framework (KAF)
KNOWLEDGEINTENSITY
INDEX(K.I.I)
Technical Staff(1) Patents(3)Expenditure on R&D(2)Technology Transfer(2)
Embodied Technology (3) Amortised Annual R&D(1)
Disembodied Tech (2) Stock Research Personnel(1)
In Surveys(2) Communities of Practice(1)
Outsourcing of R&D(3)
Training Programmes(2) Education(3) Experience(1)
New Market Products(2) Publications(2)
Patents Granted(3)
KNOWLEDGE INPUTS
KNOWLEDGE STOCKS &
FLOWS
KNOWLEDGE NETWORKS
KNOWLEDGE LEARNING
KNOWLEDGE OUTPUTS
FACTORSCONSTRUCTS
Learning Invention
Red = Human Blue =Structural Green= Relational
Tacit (1) Explicit (2) Implicit (3)
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KEY
Knowledge Intensity Index (K.I.I.)
• Factors: One that actively contributes to an accomplishment, result, or process (FactorConstructK.I.I.)
• Constructs: To form by assembling or combining parts (ConstructK.I.I)
• Knowledge Intensity Index (K.I.I): K.I.I. shows the knowledge intensity of an organisation
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Constructs
• Knowledge Inputs
• Knowledge Stocks/Flows
• Knowledge Networks
• Knowledge Learning
• Knowledge Outputs
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Knowledge Inputs
• Technical Staff- information on employees such as the level of education and number of technical staff, can be collected
• R&D- any creative work undertaken on a systematic basis in order to increase the stock of knowledge
• Technology Transfer- payments for production-ready technologies or know how
• Patents- the representation of ideas themselves, patents are the closest to direct indicators of knowledge formation
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Knowledge Stocks/Flows
• Embodied Technology- Embodied technology is the introduction of context into production processes of machinery, equipment and components that incorporate new technology
• Disembodied Technology- is the transmission of knowledge, technical expertise or technology in the form of patents, licenses or know-how within an existing domain
• Amortised R&D-R&D stock relative to production has been used to estimate rates of return to R&D investment
• Research Personnel- measurement of personnel employed
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Knowledge Network
• Communities of Practice- Informal networks tend to be based on personal contacts or communities of practice
• Innovation Surveys- surveys capture information about the factors affecting the propensity of firms to innovate
• Outsourcing of R&D- new types of collaborations with research organisation & activities in research and development, production, procuring, distribution, recruiting and ancillary services
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Knowledge Learning
• Training- assessed by questions on human resources and training
• Experience- Each worker requires skills obtained through education (which usually gives rise to formal qualifications in the shape of degrees or diplomas, whose equivalence may be recognised internationally) or through training or on-the-job experience
• Education- labour force with particular educational attainments
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Knowledge Outputs
• New market products- the Oslo Manual distinguishes three relevant concepts: new to the firm, new to the market and new to the world
• Publications- by academic publication (a common codified pool of knowledge)
• Patents Granted- legal property right to an invention, which is granted by national patent offices
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What we covered today
• Knowledge Management
• The Project
Introduction of Project
• This report is intended for the board of Celtic Wholesome Foods Plc. The purpose of the report is to:
• Assess the feasibility of a proposal to implement a centralised I.S. Service Desk
• Explore the possible options• Recommend a course of action
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Scope of Document
• This document provides an outline of the investigation and feasibility study that was conducted in February/March 2010 by __________________ into the use of a centralised IS Service Desk in Celtic Wholesome Foods Plc.
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• The Statement of Scope and Objectives is a copy of the statement that was created at the initiation of the project.
• Interviews were conducted principally in the _______ division. This was due to the fact that the author is currently based in this division. However, other divisions were taken into consideration in all other aspects of the study
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• Statement of Scope & Objectives• At the inception of this project this statement
has been created in order to outline
• the exact nature of the business opportunity that has lead to the project
• the intended benefits of the proposed new information system
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• Assignment Scope• Company details• Project Initiated…• This project was initiated at the request of the
Finance Director of the group due to a number of issues that came to her attention:
• Business units are paying vastly different rates for maintenance on their systems
• Purchasing decisions are not based on clear historical data
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Problem/Opportunity
• Currently, all problems with information systems are resolved using local arrangements. Consequently, there are inefficiencies across the group.
• Potential for cost savings from central purchase is not being utilised.
• Call response times vary greatly across the group.
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Problem/Opportunity
• For example: In production all calls are responded to in 2 hours– In Finance, calls are often unanswered for 8 hours
• There is no management information – which could be used for– Highlighting problems with current systems– Making purchasing decisions more informed in
future• The response to calls is variable: Some service calls
are being answered promptly– Other calls are taking days to resolve– There are no means of prioritising calls
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Business Benefits
• There are many anticipated benefits from the use of a centralised service desk. These include:
• Faster response times – i.e. engineers respond to requests faster
• Reduction in time lost due to system issues• More specialisation among engineers – i.e. each
engineer focuses on one area– e.g. one engineer concentrates on email– another engineer concentrates on database
applications
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• This means that engineers are being utilised to do the work that they are skilled in
• Management information is produced regarding the support calls for various systems
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System Capabilities
• An IS Service Desk should be capable of the following:
• Handle all IS Service Calls • Maintain a history of all calls• Maintain a record of all software that is rolled
out to computers• Maintain an exact record of the configuration
of each information system in the group
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• Company Information• Company size, geographical locations • Personnel (by type)• The breakdown of personnel in the division is
as follows: • Marketing Director, • Sales Manager• Marketing Manager• Organisation chart • A copy of the organisation chart for the project
Department is shown in Appendix ?? Page ??. 40
Feasibility Report
This report provides an outline of the current system and available options before examining one option in detail.
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Current System
• Currently, the system operates as follows:• Each business unit has a team of people who
handle all matters relating to IS• There are no formalised methods of logging
requests to the IS people• Sections located nearest to the local IS
department get the highest level of service– Because they can walk into the office to get
personal service• Offices that are distant from the IS department
do not get good service
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Available Options
• Different vendors/suppliers are used in each of the business units resulting in– A variety of support contracts– Loss of potential savings from pooled
purchase• Management information is not available
because– Each IS team has its own method of logging
requests– Some use an access database, others use
an Excel spreadsheet
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– Some teams do not keep records of service requests
– Information is not pooled across the divisions• Each IS department has its own budget• Local arrangements are employed in prioritising
calls– Some of the managers have close links with
the IS department– This provides them with the means of
escalating calls• It also enables the IS people to get to
understand the business44
• Currently each business unit has its own IS team who are acting independently. There are a number of options available to the group with regard to how to work in the future. The following is an outline of the main options available:
• Continue with the current option of each unit operating independently
• Utilise a centralised IS Service Desk but allow local IS service functions
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• Utilise a centralised IS Service Desk and centralise all IS functions
• Outsource the IS Service Desk and centralise all IS functions
• Outsource the IS Service Desk and outsource all IS functions
• Options Evaluated• Ads/Disadvs
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Feasibility Study
Baaf 3 Project
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Components
• Economic• Technical• Operational & Organisational• Social
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Economic Costs
• Systems Analysis & Design• Purchase of Hardware• Software Costs• Training Costs• Installation Costs• Changeover & Data Conversion• Redundancy Costs• Operating Costs
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Economic Benefits
• Savings in Labour• Benefits of Faster Processing• Better Decision Making• Better Customer Service• Error Reduction
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Compare Costs and Benefits
• Costs – mostly in the initial stages• Benefits – end of systems life cycle• Methods• Discount Rate of Return• Net Present Value• Cost-Benefit Ratio• Profitability Index• Internal Rate of Return
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Cost/Benefit pitfalls
• Tangible benefits can be quantified • BUT• Intangible benefits are not easily quantified• Financial models assume that costs and
benefits can be expressed in financial terms
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Technical Criteria
• Rule-governed tasks • Repetitive tasks• Complex Tasks• High degree of accuracy required• Speed of Response• Data used for many tasks
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Technical Feasibility
• Will the system…:• Deliver the performance required?• Deliver the necessary level of security?• Enable data integration?• Ensure data quality?
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Operational & Organisational Feasibility
• Organisation accepts new systems?
• Will users be able to use the technology?
• Organisational structure (departments & divisions) – conducive to the system?
• Support the required decision-making?
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Operational Feasibility
• The operational feasibility of the proposed change is centred on
• users to log calls to a central IS Service Desk• users providing exact details to the IS Service
Desk, such as confirming– Asset Tag on PC– Exact location– Alternative contact numbers
• Engineers taking all instructions from the IS Service Desk
• Engineers refusing to handle calls that have not been logged with the IS Service Desk
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Operational Feasibility
• Potential difficulties in the area of operational feasibility are:
• Lack of cooperation from management• This would result in their staff not adhering to
new procedures• Lack of cooperation from service engineers• This would result in calls being processed
without being logged centrally
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Operational Assessment• It is believed that the proposal to utilise a
central ERP is operationally feasible because:• 1• 2• 3• 4• 5
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Social Feasibility
• Implications on lifestyle– Eircom removing telephone kiosks
• Implications on wider community– Mobile Phone Masts
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Recommendation• I would (would not) recommend that the
proposed installation of a centralised IS Service Desk be progressed. The recommendation is based on the following main points:
• Technically – there are no issues to threaten the feasibility of the project
• Economically – the project is feasible (based on two reviews)
• Organisationally – the project is feasible (though it will need to be well-managed)
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Plans…• This report requires the approval of the board of
Celtic Wholesome Foods Plc.• If approved, the following are the most immediate
steps to be taken:• Inform all senior managers of the decision to
proceed with the project• Inform the IS managers and IS teams in each of
the business units• Arrange meetings with IS teams to discuss how to
progress the project• Initiate the assessment of Helpdesk software
solutions
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Feasibility Report
• Title Page• Terms of Reference• Background• Method of Study (fact finding)• Present System• Proposed System• Recommendation• Development Plan
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Summary
• Initiation of a project• Statement of Scope & Objectives• Data collection methods• Feasibility Study• Feasibility Report
End of Lecture
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