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An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

-Jack Welch

Organizational Knowledge Diversity

ERP Success & Organizational Knowledge

Often in ERP organizational change, a vast array of stakeholder knowledge diversity can exist in breadth and depth. Here, we use diversity to mean the “state of being diverse; variety” (Oxford Languages). Understanding organizational, and individual, level of knowledge is crucial to ensuring alignment and effective ERP assimilation. Often, stakeholder knowledge can vary greatly in several ways including:

  • ERP system functional, technical, and conceptual knowledge
  • Knowledge of the purpose, value, and goals of the organizational change
  • Knowledge of the process required to realize successful ERP organizational change
  • Knowledge of the organizational (and individual) ability to reflect, assess, and respond to ERP organizational change demands and challenges

These are four broad areas of knowledge that can have a significant impact on ERP organizational change success. It is important that organizations recognize that this often significant and disparate array of stakeholder knowledge exists. With this understanding, an ERP organizational change project plan can then include mechanisms in which to bridge the knowledge diversity gap.

The Value of Knowledge Influences

A great deal of literature exists that discusses knowledge-related influences that are pertinent to improving the effectiveness of ERP organizational change. Knowledge-related influences can be defined as influences, or success factors, that impact (positively or negatively) the process of acquiring, applying, measuring, and transferring knowledge. Due to the vast amount of potentially critical knowledge-based influences identified in ERP organizational change research and the different priorities put on each, it is helpful to examine the knowledge types specifically and the importance of knowledge in solving performance problems. As Clark and Estes (2008) illustrate, knowledge in its different forms is critical to facilitating organizational performance and improvement. Stakeholders can often be unaware of their own lack of knowledge and skills deficits and therefore it is important that they become aware of knowledge factors such that they may fully analyze and assess problems in order to accomplish performance goals (Clark & Estes, 2008). Organizations and practitioners could benefit from knowledge gained from sound objective research that identifies the critical success factors (CSF)  of significance towards ERP organizational change.

Types of Knowledge

Knowledge types as well as knowledge influences, further understood, could offer insight towards promoting success of ERP organizational change. Four types of knowledge influences exist: factual, conceptual, procedural, and metacognitive (Krathwohl, 2002). In providing awareness to the knowledge types and specific influences, the objective is to provide insight as a mechanism in which to prepare recommendations and suggestions that advocate for effective organizational learning and knowledge. Below is a brief overview of the knowledge types along with an example of knowledge influences.

Declarative Factual Knowledge

Declarative factual knowledge is knowledge about the “what” such as facts and meaning of terms (Aguinis & Kraiger, 2009).  Factual knowledge is referring to the basic elements that need to be understood within a discipline such as knowledge of terminology and it is discrete, isolated content elements (Krathwohl, 2002).

An example of declarative factual knowledge in the context of ERP organizational change: Organizations would benefit from obtaining and understanding the factual knowledge that ERP research demonstrates significant business advantages with the successful assimilation (Kalling, 2003) but also that ERP failure is a significant challenge across all industries (Shao and colleagues, 2017). The premise is that having the knowledge and skills required of stakeholders to be aware of and comprehend the true and significant functional value of ERP  is critical. But yet, knowledge is also required to understand why and how ERP organizational change requires significant effort and often encounters substantial challenges. This knowledge will perhaps allow organizations to be proactive at the onset of ERP organizational change and to design training and awareness programs to facilitate knowledge and skill transfer required to advocate for effective learning. In a study of 170 manufacturing companies, Li and Zhao (2006) collected data on knowledge management in ERP environments in which they describe how organizations can enhance competitive edge through knowledge awareness and knowledge management in implementing ERP systems. Acquiring appropriate factual knowledge and effective application of that knowledge is highly relevant to the success of ERP organizational change.

Declarative Conceptual Knowledge

Conceptual knowledge is a more complex knowledge requiring organized forms of knowledge (Krathwohl, 2002).  Conceptual knowledge is interrelationships among the basic elements (success factors) within a larger structure (the organization) that enable them to function together as well as the knowledge of principles, generalizations, and theories (Krathwohl,2002).

An example of conceptual knowledge in the context of ERP organizational change: Organizational, and individual, knowledge and awareness of the many identified critical success factors and their interrelationships. Organizational stakeholders would gain in understanding the benefits and challenges of these success factors and their interplay. The understanding and awareness of the interrelationships of the elements (success factors) in a larger framework (the organization) in a way that enables cohesion and cooperation is conceptual knowledge (Krathwohl, 2002).  Significant research exists that attempts to describe and place value of ERP success factors. For instance, Ngai, Law, and Wat (2008) provide a list of many specific critical success factors in literature from 2000 to 2008 and describes how different weight is put into different critical success factors in the adoption of ERP systems.

“Understanding and identifying the critical success factors (CSFs) are essential to increasing the chances of a successful implementation of ERP”. (Ngai, Law, & Wat, 2008, p. 556)

Additionally, for example, Yeh and Chou (2003), show that there is a direct correlation between team diversity (CSF) and the effectiveness of ERP implementation. Another example, Bhatti (2005), describes how effective training (CSF) and education (CSF) of the workforce is a critical factor in organizational ERP implementation success. This type of conceptual knowledge demonstrates that 1) many critical success factors exist, 2) relationships exist between critical success factors that may directly or indirectly contribute to ERP organizational change success, 3) some critical success factors may have more impact than others, and 4) organizational context may impact the weight, or priority, that needs to be put on each success factor.

Procedural Knowledge

Procedural knowledge describes how to do something such as the needed methods, techniques, and knowing when to use certain procedures (Krathwohl, 2002). Procedural knowledge is knowing how to do something such as methods of inquiry, and criteria for using skills, algorithms, techniques, required steps, and methods (Krathwohl, 2002). Additionally, knowledge in terms of improving performance through a process of measurement, assessment, and response is an example of procedural knowledge. Some ERP research suggests performance benefit for organizations that know how to effectively apply appropriate theory, principles, models, and process to ERP organizational change efforts.

An example of procedural knowledge in the context of ERP organizational change: Many ERP transformations often consist of a selection as well as an implementation procedure, and these procedures can vary significantly across organizations. For example, Umble, Haft, and Umble (2003) present a case study of a successful ERP implementation and identifies software selection procedures and implementation procedures that are critical to a successful implementation. Umble, Haft, and Umble (2003) state that implementation procedure matters because a successful ERP project can speed production cycles, enhance customer service, and cut operating costs. Therefore, it is important to be aware of and execute successful ERP selection and implementation procedures.

The reason that the selection procedure is critical is that every organization has unique business models and structures and since, as a matter of course and design, ERP systems vary greatly and can impose a specific business model, structure, and approach on a company’s strategy, it is, therefore, imperative that the ERP selection process be executed with diligence and in recognition of the success factors and their interplay (Umble, Haft, &  Umble, 2003). Furthermore, Umble, Haft, and Umble (2003) add that often ERP failures occur when the new ERP’s functionality is mismatched with the organization’s desired business processes and procedures.  Hence, Umble, Haft, and Umble (2003) describe a recommended selection procedure consisting of 13 selection steps in which if anyone step is missed or improperly executed could lead to selection failure.  Umble, Haft, and Umble (2003) also discuss an implementation procedure that consists of eleven recommended implementation steps. Umble and colleagues demonstrate how the sophistication and ERP systems make them difficult to implement but that structured and disciplined implementation procedure can greatly facilitate the implementation. These steps include for example critical success factors such as accurate documentation of procedures and an iterative process of continuous improvement (Umble, Haft, & Umble, 2003).

Bajwa, Garcia, and Mooney (2016) further illustrate the importance of the selection procedure of an ERP package as a critical success factor for ERP assimilation. Research suggests twenty-nine different selection criteria that should be considered that have been identified which explains why ERP selection can be complex and can take months along with thousands of dollars to select. In lieu of this known selection process complexity, researchers have published and suggested standard operating procedures for ERP acquisition (Bajwa, Garcia, & Mooney, 2016). Not only is the selection process critical, empirical evidence suggesting that organizations differ in their approach as well as the importance that they place on the implementation step. Research also suggests recommended procedures to counter potential procedural shortcomings (Bajwa, Garcia, & Mooney, 2016). These critical implementation process knowledge steps include, for example, detailed gap analysis, business process review, data conversion, and clarity of work procedures, user training, and acceptance testing (Bajwa, Garcia, & Mooney, 2016).

Calogero (2000) points out more of an “Executive Level” report on ERP challenges by illustrating ERP failure statistics as well as demonstrating that challenges have been well-publicized in the leading business periodicals and literature. While an older article, still relevant, insightful, and applicable as Calogero (2000) emphasizes the importance of ERP procedure in stating that critiques and revising via iterative procedures act as a method to ensure ERP solutions are on a successful path. Moreover, Calogero (2000) illustrates the value of procedure by noting that many ERP challenges are due to an underestimating of crucial procedure; that of clearly discussing and establishing new business processes as a step in the ERP transformation but prior to ERP selection.

Metacognitive Knowledge

Lastly, metacognitive knowledge is the knowledge of cognition in general as well as awareness of one’s own cognition and would include strategic knowledge, contextual and conditional knowledge, and self-knowledge (Krathwohl, 2002). Metacognitive knowledge is the awareness of and knowledge about one’s own cognition as well as strategic knowledge, and knowledge about cognitive tasks, including appropriate contextual and conditional knowledge (Krathwohl, 2002). Metacognition is the understanding of knowing what one knows, knowing what one does not know, and not knowing what one does not know. Baker (2006) states that metacognition literally means thinking about thinking. Metacognition plays an important role in promoting the transfer of teaching as learners can more readily apply knowledge if they have awareness of themselves as leaders and learners, if resources and strategies are monitored, and if they assess their readiness (Baker 2006). This is the type of knowledge that prevents one from being “unconsciously incompetent” as described by author, Ron. J. West.

An example of metacognitive knowledge in the context of ERP organizational change: Organizational stakeholders would benefit in understanding how to evaluate critical success factors and when, why, and how to use specific and effective intervention. Essentially, metacognition would allow stakeholders to evaluate and reflect on their own weaknesses and strengths, planning approaches, assessing demands, and monitoring and adjusting strategies required of successful ERP organizational change. Baker (2006) states that learning requires the effective activation of relevant background knowledge and the deployment of cognitive strategies to achieve particular goals. Therefore, metacognition is knowledge and awareness about oneself as a learner about a given task as well as the strategy needed to accomplish a task.  This notion of metacognition in terms of knowledge and awareness as a learner can be applied to executive (and organizational) stakeholders to suggest that stakeholders need to be able to reflect not only on their own knowledge and awareness of ERP organizational change but also that of the organization and workforce.

The concept of metacognition is valuable in regards to determining and reflecting on;

  • How well the ERP implementation is being executed
  • Areas that need improvement
  • Correctly setting goals and expectations bringing clarity and insight to understanding gaps and issues.

Metacognition would benefit stakeholders in their ability to reflect on what is known and what is not known or understood about ERP implementation and it is the unknowns that may be the problem. Metacognition would allow stakeholders to access the progress and value of learning and education in terms of the knowledge, in its many forms, needed for an ERP transformation.

By definition, metacognitive knowledge would allow stakeholders to evaluate and reflect on their own weaknesses as well as organizational weaknesses that may be prohibiting progress. Stakeholders need to be able to reflect upon their leadership skills as this is a metacognitive skill and lack of clear leadership could prohibit organizational learning (Heierhoff, Arntzen, & Muller, 201).  Stakeholders need to practice, understand, and implement the practice of “thinking about thinking”  in order to ensure appropriate organizational learning by providing clear roles and responsibilities and providing a methodical model with a loopback mechanism as key necessities (Heierhoff, Arntzen, & Muller, 2011).  This notion is the value of metacognitive knowledge.

By Dr. Jack G. Nestell

Want to learn more about the idea of being “unconsciously incompetent” as described by author, Ron. J. West:

Learn More about Nestell & Associates:


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