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Gian Marco Campagnolo Dep. of Sociology and Social Research University of Trento Via Verdi, 26 I-38100 Trento firstname.lastname@example.org
Abstract This paper describes the dynamics of IT related expertises as social learning distributed in space. The case of an Italian local government organization using an ERP software designed for the public sector has been analyzed. Data on distinctive locational patterns of organizational resources concerning post-implementation enhancements of the system were gathered through interviews and observations of the system in use. Four different locational patterns of IT related expertise have been identified in the case across different time periods: the ‘implementation team’ period (1998-2001), the ‘era of personalization’ (2002-2005), the move from the in-house software enhancement to external consultancy (2005-2008) and the more recent appointment of a different consortium of multiple consultants to implement additional software modules.
“I limiti - interfacce, canopee, limitari, margini, bordure - costituiscono, in sé, spessori biologici. La loro ricchezza è spesso superiore a quella degli ambienti che separano”. Gilles Clément
It has been acknowledged that a shift occurring with ERP systems from the arrangement of maintenance and enhancement typical to the custom model of software delivery - where maintenance is linked to initial software provision - to the packaged software model (Sawyer, 2002), and systems sold as a product is taking place. Typically, packaged software is licensed for use, not sold. On the contrary, custom IS are those made by either an organization’s internal IS staff or by direct subcontract to a software house. That is custom IS as made-to-order systems are typically built for specific users. This definition of custom IS includes most government work (Sawyer, 2000). Commodification, to its turn, removes local sites from processes of design and so the influence of expertise on the design of technology changes from the design of bespoke systems to the decision on the consumption of commodified technologies (Forty, 1992; Hislop and Newell, 2001). However, organizations may not want to consume the full ERP package, but limit themselves to exploit few functionalities of it, ignoring some others. A lot has been said about innovation concerning vendor offers and the evolution of IT markets (Hislop, 2002). However, the academic interest has been mainly addressed towards the role of the consultant in shaping this relationship. This is also true for what concerns the changing character of IT related expertise. The concern of this paper is to fill this gap by examining the role of the client company locational patters of IT-related expertise in configuring the ERP solution adopted. With IT-related expertises we mean all expertises that can count during the adoption, implementation and post-implementation period of an organizational information system: accounting expertise, project management expertise, policymaking and IT expertise. In the information system literature it has been widely acknowledged that the organization-wide software can re-define the organizational expertises (Hislop and Newell, 2001; Walsham 1998). In ERP systems, all main business functions such as finance and accounting, human resource, supply chain, sales and customer service, manufacturing and logistics are combined into a single, integrated software platform, which runs over a shared database. A logical consequence of the enterprise wide scope of ERP systems is that decisions on the consumption of these technologies becomes the concern of management more generally rather than accounting management in particular. Management accounting appears to have lost a direct control over the design of in-house technological systems, but that does not necessarily mean a loss of control over technologies, which define expertise. Our consequent question is: how the ERP system adoption, implementation and post-implementation reshuffles organizational expertise found at work in all business functions affected by the implementation of an ERP? While the power of initial organizational decision about consumption has been recognized (Pozzebon and Pinsonneault, 2005), we suggest that an area of importance to understand this reshuffling of organizational expertises that goes together with the introduction of configurational technologies such as ERPs turns to how they are made to work after the implementation. The after implementation period is not a passive process but an active one, which can shape the use of technologies and strongly contribute to define expertise. The activities performed to change a computer system after delivery to the customer or users are usually defined to be ‘maintenance’. According to Bjerknes & Bratteteig (1991),
however, the notion of maintenance is closely connected to the view that a computer system is a finished product in a stable environment. According to the authors, we will use the notion of system enhancement instead of maintenance to identify post-implementation activities addressed to enhance the organizational software due to new or changed requirements from the organization. Thus changes to the system are not seen as repairing product failures, in the sense that they are not seen as an expression incompetence - competence being equated with the ability for correct use in predefined situations (Floyd 1987, p. 202) - but as an expression of action and decision processes taking place in a specific period of the biography of a technological project (Pollock & Williams, 2008). We thus privilege the post-implementation perspective on the changing character of IT related expertises, particularly in relation to customer support, upgrades and incremental ERP modules implementation. Technical knowledge concerning what of an ERP system to implement and when becomes not so much a question of depth of technical expertise but more of identifying interactions between a product (and its related project) with a wide variety of other components (and ‘projects’) in different configurations and different states. In resolving these calls for extensive, and by implication shallower, knowledge of the enormously wide array of potential interactions between the elements of the broader socio-technical infrastructure, it creates issues about such knowledge is defined and distributed among organizational units and between organizational units and other stakeholder in the IT market. We will address these questions by illustrating a case study concerning the introduction and the configurations over time of an ERP system into a Northern Italian public administration (let us call it Dante Province). Dante Province is the first Public Administration in Italy that in 2001 carried on the introduction of an ERP system supplied by a world leading ERP vendor (let us call it SofCo). In section 2 we will present STS as a theoretical framework to study changes in IT-related expertises. In section 3, the longitudinal case study research approach including interviews and observations will be presented. In section 4 the case study will be presented according to four different historical periods: the ‘implementation team’ period (1998-2001), the ‘era of personalizations’ (2002-2005), the move from the in-house software enhancement to external consultancy (2005-2008) and the more recent appointment of a different consortium of multiple consultants to implement additional software modules. Discussions and conclusions about IT expertise locational patterns will follow.
2. Theoretical Framework
We want to study changes of IT-related organizational expertise in its broader scope over time due to the introduction of ERP systems when the customer is a local government using STS (see Jones, 1999; Walsham, 1997; Scott and Wagner, 2003), which is superior to deterministic approaches that assign pre-defined and fixed features to IT. Network is the notion established by the organizational literature and by the economic sociology literature to capture the phenomenon that business firms are interacting in complex and cooperative ways throughout geographic distributions (Di Maggio 2001, p.21; Filgstein 1990). However, in network approaches, networks are sparse social structures, and it is difficult to see how they can fully account for what we observe in the course of inter- and intraorganizational relations in terms of intense and dynamic conversational interactions, knowledge flows and temporal structures. Network approaches have been criticized for containing no sense of the specific processes and mechanisms of knowledge transfer and the consequences these may have for technology choices and their societal outcomes (Knorr Cetina and Bruegger, 2002: p. 910). Furthermore, STS research in IS and elsewhere has concentrated on the emergence of IT as black boxes (Quattrone and Hopper, 2006). This helps clarify how IT systems acquire stability and become taken-for-granted but it neglects what happens when they achieve this status. This carries the danger of wrongly assuming that organisational worlds achieve order and stability once processes leading to black boxing are identified (often judged in terms of success or failure). However, in our case we want to illustrate how the ERP system changed continually and differently across various spaces and times, to meet emergent
post-implementation demands. Technology is emerging through a complex interaction between many diverse players (within the organization, in the client-consultant relationship, among different public administrations, among public organizations of different sectors), with their own, often differing, perceptions, commitments and interests. In this “technological ferment” it is very difficult to achieve “closure”. The second and related point of limitation of STS concerns translation. This is useful for understanding how organisational entities, spaces and times are created and are subject to constant mediation. However, as Quattrone and Hopper tell us (Quattrone and Hopper, 2006), the notion is a victim of its own success. Once a technology is established and black boxed, translation apparently disappears. STS research in IS fails to address how apparently stable and functioning managerial practices like an ERP or accounting system exist alongside continuous change in their functions (and/or their multiple interpretations). Thus, a closer look seems to be needed to capture the interactional means of structuration that are embedded in post-local forms of service sourcing. However, the assumption that have characterized much micro sociological thinking in the past - those of the relative autonomy of micro-orders and their confinement to physical setting - are seen as theoretically no longer adequate in a world in which interactions can also be disembedded from local settings, in which space may be separated from place (Giddens 1990, p.18). For a definition of space we draw on the economic geographers Amin & Cohendet (2005), when they engage with their central claim that spatial proximity and territorial agglomention do not per se generate distinctive or superior learning advantages. Their arguments suggest that it is no longer that easy to insist that local contexts, through an alleged intensive circulation of knowledge or “spatial containment”, are better equipped to ensure the accumulation of knowledge. We adopt their definition of spaces of learning as a shared space for emerging relationships: what in what they call the “islands of innovation” perspective was the in-between dispersed within a loosely held string of islands, each island generating its own specific, but especially tacit knowledge, counts for the authors as a formative space. The know-how of individual units is not a “local affair” but it is a “nodal” knowledge shaped by flows from elsewhere in the corporation, parent policies and cultures, inter-nodal socialization patterns, and other spatial strategies of corporate mobilization for learning. Learning taking place in the so defined space is a multi-actor and multi-level ‘social learning’ (Williams, 2000). The interactional means of structuration that we want to put forward for interpreting our case will be illustrated by describing the dynamics of software enhancement technical knowledge as social learning distributed in space. Social learning (Williams et al., 2005) highlights the extended range of actors and locales in which innovation takes place. According to Williams (2000), social learning is not restricted to the supplier-user learning economy: [...] social learning is not restricted to the learning economy of supplier-user interaction around the design and appropriation of artefacts, but also encompasses the activity of public policy-makers, as well as promoters and other players in civil society in setting the ‘rules of the game’ (p. 251). The concept of “social learning” was advanced by Rip et al. (1995) and used by Brosveet and Sorensen (2000) to explore the ways in which generic ICT technical capacities are “domesticated”, that is selectively taken up and adapted to particular contexts. It is in this context that social learning theory places special stress upon the role of various kinds of intermediary (some linked to technology development, others to its appropriation). As well as formal intermediaries, our study shows that intermediaries often arise at the interstices between organizations as an additional role to formal roles (raising questions about how this role may be resourced and motivations) (Williams et al. 2005).
3. Research Approach
The case of an Italian local government organization using ERP software designed for the public sector (let us call it SoftCo) has been analyzed. Data on distinctive locational patterns of organizational resources concerning post-implementation enhancements of the SoftCo system were gathered through interviews and observations of the system in use. In order to access the field, we identified a singular SoftCo module - let us call it the Project Management Module (PMM). The idea of selecting the Project Management Module was to be able to identify SoftCo system usage across different organizational functions, beyond the Accounting Division. The fieldworker has been an employee of the Dante Province. Representatives of each organizational unit concerned with SoftCo PMM have been interviewed. Providers of technical support on the SoftCo system have also been identified and interviewed. This opportunity facilitated the fieldwork with the identification of the relevant actors. Key users and the either internal or external technical support team members have been interviewed. A total of 12 interviews have been performed across a period of 2 years. Interviews concerned the following dimensions: (i) organizational processes supported by the PMM: norms, characteristics of the planning activity; scope of the PMM module; (ii) organizational actors involved in the process supported by PMM: role of the organizational structures involved; (iii) description of PMM: PMM advantages, critical aspects of PMM personalizations of PMM, integration, trasversality; (iv) post-implementation technical support on PMM: module introduction, tests, responsibilities, role. Some aspects of the activities accomplished by the key actors with the PMM module have been also observed. Observations of the PMM module in use have been also performed in order to analyse the nature of the technical solution.
4. Case Presentation
The Dante Province case is an organizational case of in-house providing: the in-house providing model is an organizational model by which a public administration makes use of an organism that, while belonging to the same administrative organization, do not necessarily constitute an internal staff articulation. The Dante Province in-house company was originally a private company that became entirely owned by the public. In principle, the management controls over this company are “analogous” to those Dante Province exerts on an internal organizational unit. One of the most relevant aims for introducing SoftCo in the Dante Province was to decentre accounting services. Accounting services previously performed by a centralized group of 30 accountants were going to be distributed over 400 people. As it was first introduced in 2001, the SoftCo modules were in a standard version that is without customizations: “Each single user, each single unit was responsible for the data input and above all of the controls. We structured the system in a way that would have solved the information requirements of the Staff units, in order for them to be able to monitor. But essentially, the system would have served the users (ERP Project reference person). The modules served the management of 14 long-terms plans, each corresponding to a relevant organizational Unit. Organizational Units in the Trento Province are divided in Staff Services and Line Services. Staff Services are organizational units that provide services to other internal units. Line Services are organizational units that provide services to other parties (citizens, firms, etc...). Long-term plans have to be filled only by Line Services, while Staff services like the Planning and the Accounting Services just consult them.
The case of ERP post-implementation activities arrangements in the case of Dante Province is described across four different periods, covering the time span of a decade. Each period corresponds to a specific IT-related expertise locational patter. In the first period that we term the ‘Implementation Team’ period, the functional analysis expertise, the programming and the accounting competence were found together in the same place within the implementation team. There were no external consultants working in the team. The Dante Province at that time was the first Italian public administration implementing a SAP system. A second period, described as the ‘era of personalizations’, describes the period following the implementation team quit. A product support chain was built including the appointment as key users of internal staff services employees. As mentioned before, internal Staff Services employees were not directly using the system. Staff Services role was to monitor the coherence and regularity of the data input in the system by the Operative Services. At that time, the IT in-house company started to outsource programming functions to small external consultants able to program the system, while maintaining feasibility and functional analysis in-house. In the third period, a SoftCo consultant performs feasibility studies and analyses, which is a consultant of the technology supplier. Other public administrations started to learn how to implement SoftCo. Consultants started to have experiences on the implementation of the system in the public sector. The fourth period presented concerns the issuing of a Consortium for the implementation of new system modules. Despite Dante Province wanted to continue with the SoftCo consultants, the in-house IT company decided to empanel a consortium made by academic partners, other non SoftCo consultants and members of the IT company. The decision has been justified by the fact that the Consortium was already in place for other SoftCo implementation projects in other local public administrations (e.g. the University). 4.1 The implementation team (1998-2001) At the time SoftCo was first introduced, the Dante Province empanelled a temporary ad-hoc implementation team. It was formed by a project reference person, internal employees and by members of the in-house company, at that time performing the functional analysis and the programming of new pieces of software. Lately, this team has been dissolved. The SoftCo project reference person has been moved from the IT Division to the Accounting Division. In addition, the programming tasks (e.g. writing code) have been outsourced by the in-house company to small external consulting companies. In the stead of the expertise found together in the ad-hoc implementation team, a process where Staff Service Planning and Accounting key users were in contact with a maintenance group located at the in-house company has been introduced. Starting from that period, key users participated in meetings with the in-house maintenance group to take decisions about software enhancements, provide observations and approve all analysis and design documents from the maintenance group and give feedbacks on the prototype version of the system. The reference person of the ERP project implementation in the Dante Province describes the key user as an important role in the post-implementation period of the biography of the ERP project. The key user has the role to represent employee requests of technical support to the IT maintenance group, asking required personalizations. At the same time, key users have to know the system, be aware of what the consequences of personalization are and be able to communicate to their colleagues how they can better work with the standard version of it: “Key users have a fundamental relevance. In some modules there are key users that force themselves to learn about the system and a big deal about the processes. There are instead key users that are not always able to negotiate with the others. Some others find an agreement with everybody, perhaps because they do not follow their ideas to the end. And this is not good. (ERP Project reference person). 4.2 The era of personalizations (2002-2005) Key users found that the SoftCo as it was first implemented in 2002 was not adequate:
“The standard SoftCo PMM modulo was not good, because the public administration has constraints about authorization, balance, allocations. The private sector does not have such rigid constraints. The standard version of the module did not have cross-controls; there was no integration, neither with administrative provisions, nor with the accounting. Then it was as having information in separate and totally unrelated boxes” (Key User Planning Division). A number of personalizations took place starting from that period. An important aspect of personalizations concerns the relevant decision process. In the Dante Province, all decisions about personalization were taken in meetings between the Planning Division and the Accounting Division key users with the maintenance group of the in-house company. Planning and Accounting are Staff divisions. They do not directly use the system. Their role is to monitor what Operative Service do with the system. Only when decision taken by Staff Services key users required personalization costing more than 10 working days from the maintenance group, they were submitted to the IT Division. Otherwise, the IT Division took them without any kind of cross-functional control. Customizations taking place during that period (that we term the era of personalizations) are presented by the key users as required because “informatics must be coherent with the provisions” (Key User Planning Division). Each of the 14 different Operative Services long-term budget plans include management particularities mandated by the law according to the specific service they provide (highway administration, emergency management have specific management requirements that are not shared by other kind of Operative Services). Thus, in order to be fully compliant with the regulation, the overall customized PMM module SofCo version in use included all the possible exceptions that are found in each Operative Service: “There are some plans that can directly commit. They do not have to book funding. They are the highway administration, the local autonomies and the disaster management services. Then, for the ‘control of the budget commitment availability, plans working with this particular typology have to be foreseen. Then, in the registry information of the plan, a function has been added to specify: ‘Does this plan require to book funding?’ since the system has to identify what kind of control to apply. Then there are some plans that are divided in sections. The aggregated vision of the sections at the level of the plan has been added as a further function to the module.” (Key User Planning Service). A representative of the IT maintenance group describes this situation as follows: “ In PMM we did a very rich reporting, extremely rich and extremely sophisticated I would say [...]. So, in theory, if the PMM reports are not complete, I do not really know what can be more complete” (IT Analyst). When it comes to consider the technical point of view, the same interviewee tells, “the interventions on SoftCO are done on a system that is 99% personalized [...]. When there is to upgrade, when there are new releases, we have to put the hands on all the previous personalizations. Then every time is like it is a new implementation project” (Analyst IT). 4.3 From the in-house IT company to SoftCo external consultancy (2005-2008) The third locational pattern that has been identified corresponds to the strong presence of the external consultancy. From June 2005 in Dante Province feasibility studies about the introduction of new ERP modules are made by external consultants. According to the ERP diffusion project responsible, the presence of an external consultant allowed Dante Province to learn from others. At the time the ERP implementation project begun, Dante Province was the first Italian Public Administration carrying on such a project. In 2005, there was many other P.A. implementing their ERP system using SoftCo. Identifying an external consultant became then an opportunity to look outside her own organization to how other organizational contexts acted about similar projects:
“From now we will not do the feasibility study among ourselves anymore, that except for going to the sea for the holidays, we do not look around too much...we always try to do everything in-house, we are autonomous...” Looking backwards to the previous period, she told that by doing everything in-house, they also did some errors. The in-house company was strongly conditioned by the Accounting Department. Her role as a project manager at that time was to tell IT people from the in-house company to insist when an adaptation was not feasible. But when the Head of the Accounting Department raised her voice, the IT people did everything she needed, increasing the number of ‘personalizations’. According to her view, the personalization where good for change management purposes. “Instead of encountering a rejection of the system, I can do some personalizations in the spirit that after the user ‘jumps the river’, I will be the rule-maker...” But the in-house company never contributed to this point of view. Her role as project manager was not relevant enough to modify the current state of affairs. IT people from the in-house company were willing to please the users from the Dante Province, those who will pay the bill at the end, and a special role in this respect was that of the Head of the Accounting Department. Contrasts on issues like standardization or personalization of the system between the in-house company and the Head of the Accounting Department were constantly avoided. She then decided that the partnership between the inhouse company and the technology supplier was to be better exploited by involving their consultants. The reason was just that in 1998 there was neither a public administration implementing SoftCo nor a consultant knowing the public sector as an implementation context. After some years, other administration started to implement SoftCo. As a consequence, consultants were around having multiple experiences of SoftCo implementation in the public sector that could allow reuse of methods and solutions. 4.4 From the SoftCo consultant to the Consortium (2009-) Despite the different advise from the ERP diffusion project manager, in the case of the Real Estate Management module, a consortium made by academic partners, consultants and the in-house company provides consultancy. Consultancy provided by the technology supplier is not included. The SAP project manager describes the situation as a pity. According to her advise, the best choice would have been instead for the consultant knowing more about the system. Knowing less about the system and not having experience about implementation of that specific module in the public sector, the consortium is described by the interviewee as having made Dante Province loose time during the feasibility study. She describes the situation as a ‘going back’ to the 2002-2005 period, where many personalizations where implemented by the in-house company. The reason of the choice to go for a consortium instead that for the SAP consultant was made by Dante Province in-house company. The IT in-house company, being the leader of the local IT market, wanted to exploit the same consortium that was built to implement the SoftCo system in the local University.
The case study illustrates how software implementation choices change over time according to varying locational patterns of inter- and intra-organizational relationships. Changes seem to be framed within learning processes that include a large array of actors. Learning about failures and success in partner selection and implementation strategies are not confined within the boundaries of a single organization. Choices are accounted for within a context that includes interactions between many actors: the client organization in its different functions, other local government administration in other regions starting to implement the same system, in-house companies, consultants with growing experience with
public sector organizations, other local public administrations in different sectors in the same region. During the first period analyzed, the partner selection was due to the fact that the expertise required for the SoftCo system implementation was limited to the single Dante Province context. IT partners and consultants had to be trained locally: nobody else in Italy was using the system. Afterwards, implementation choices have been described as particular trajectories in the implementation project due to interactions between local actors leading towards many system ‘personalizations’. Contrasts between the in-house company, the IT Department and the Accounting Department on issues about system implementation were constantly avoided in that arrangement. Later on, choices started to be motivated with arguments concerning what other administrations were doing, and learning. At that time other public administration started to implement SoftCo and consultants having experience on public sector implementation started to be available on the market. Dante Province then decided to acquire some of these competences. For the SoftCo modules developed during that period, feasibility studies and functional analysis started to be outsourced together with programming from the in-house IT company to a SoftCo consultant. Knowing more the product, SoftCo consultants’ feasibility studies were described as accurate and timely. More recently, a consortium has been appointed for the implementation of other modules instead of the previous SoftCo consultant. Reasons of this choice include accounts from what other public administration, different from the local government, were doing, and a context were the market was shaped by the local in-house IT company. In order to acquire economies of scale, that company was proposing the same consortium and the same technological offer to different local organizations.
Our attention has been drawn to the interactions between organizations as well as between groups across different functions within an organization/institution (in other words, to the meso as well as micro level of analysis). By describing an ERP implementation case across a decade, we suggested that the intellectual tools that we need to analyze these complex developments are tools that give an account that choices exist at every stage in innovation, and that these choices are patterned by a large social and institutional setting and by the strategies of the multiplicity of actors involved. We found social learning as an appropriate tool for doing this.
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