ICT Adoption and Organizational Change

An Innovative Training System on Industrial Automation Systems

for Enhancing Competitiveness of SMEs

Nunzio Casalino

, Marisa Ciarlo

, Marco De Marco

and Mauro Gatti

Università degli studi Gugliemo Marconi, Via Plinio 44, 00193, Rome, Italy

KPMG Advisory, Via E. Petrolini 2, 00197, Rome, Italy

Università La Sapienza, Via del Castro Laurenziano 9, 00161, Rome, Italy

Keywords: e-Learning, Automation and Innovation in SME, Change Management, Learning Organization,

ICT Adoption.

Abstract: The purpose of this paper is to introduce and discuss the benefits of on-line training on automation and

innovation fields and try to explain their organizational impact on small and medium-sized enterprises

(SME). Besides it tries to understand what are the main barriers for SMEs with respect to the realisation of

their innovative potential and their capacity to improve internal processes by ICT adoption and organiza-

tional change. They are becoming particularly important for achieving greater productivity, lower opera-

tional costs, and higher revenues (usually characterized by reduced access to external finance, unavailability

of wider distribution channels, low internationalization, etc.). The purpose of the paper is also to synthetize

the experience done and the benefits of e-learning and of a specific online environment in the training pro-

cess in this field. The project provides training contents to enhance participants background and some inno-

vative simulations to improve knowledge of employees on industrial automation systems.

1 INTRODUCTION

Information and communication technologies, auto-

mation and robotics have changed and are changing

processes in industry. In parallel also on the scien-

tific and vocational education level the integration of

different fields like mechanics, electronics and in-

formation technologies (mechatronics) is practiced

since years. Nevertheless many, especially small,

enterprises have rather conservative approaches to

new technologies and thereby miss many opportuni-

ties by utilizing improved technologies. SMEs need

highly qualified staff, competent in operating with

new machines and in managing sophisticated pro-

duction processes. AutoMatic project addresses the

problem of low or missing overview about possibili-

ties offered by industrial automation systems. It

adapts and develops an innovative approach and

learning contents targeted specifically to SMEs to

basically qualify staff on industrial automation sys-

tems. There have been significant debates about the

impact of new ICTs on economic performance and

competitiveness in general, and on productivity,

efficiency, and innovation in particular. The diffu-

sion of automation can produce new opportunities

for SMEs. It overcomes the concept of traditional

organization, emphasizes the interdependence be-

tween the organization of jobs and technology. No-

tably, in seeking an explanation for the acceleration

in productivity and economic growth experienced in

many industrialized countries, many economists

have looked at the development, application, and

utilization of ICT as a critical factor. Hence, at the

firm level, the expectations are of greater efficiency,

lower costs, and access to larger and new markets,

while governments see the application and use of

ICT as generating higher productivity, and competi-

tiveness. This paper provides an analysis of automa-

tion and innovation fields and try to explain their

organizational impact on Small and Medium-sized

Enterprises (SME). Besides it try to understand what

are the main barriers for SMEs with respect to the

realisation of their innovative potential and their

capacity to create employment (reduced access to

external finance, unavailability of wider distribution

channels, low internationalisation, etc.). Moreover,

as first argued by New Growth Theory (Romer,

1986), the capacity of continuous innovation has

283

Casalino N., Ciarlo M., De Marco M. and Gatti M..

ICT Adoption and Organizational Change - An Innovative Training System on Industrial Automation Systems for Enhancing Competitiveness of SMEs.

DOI: 10.5220/0004116002830288

In Proceedings of the 14th International Conference on Enterprise Information Systems (ICEIS-2012), pages 283-288

ISBN: 978-989-8565-11-2

 2012 SCITEPRESS (Science and Technology Publications, Lda.)

become a key factor in the global competition of

high-income regions in order to acquire the addi-

tional factors of production and the new value add-

ing processes which are necessary to keep an econ-

omy on a sustainable growth path. SMEs seem to be

the ideal vehicle to promote both goals – sustainable

innovation-based economic growth and employment

creation – without trade-offs, given, as frequently

assumed, the high flexibility as well as the relatively

labour-intensive mode of production in SMEs. How-

ever, the issue as to how realistic these expectations

are is anything but resolved. Despite experience with

a different number of SME promotion programmes,

it is also still debated as to which specific policy

measures are really suitable to guarantee undistorted

competition by compensating firm-size specific

disadvantages, such as the SME’s restricted access

to public resources.

2 ORGANIZATIONAL IMPACT

OF ICT AND AUTOMATION

ICT adoption and organizational change are becom-

ing essential for achieving greater industry produc-

tivity, lower operational costs, and higher revenues.

The close correlation between these dimensions of

improved economic performance from ICT and

organizational change corresponds well with find-

ings from other studies on the impact of ICT on firm

performance. It has thus often been argued that the

effective utilization of ICT requires more horizontal

organizational structures with greater levels of re-

sponsibility for the overall coordination of work

placed on the individual employee. It also requires

the implementation of clearer functional descriptions

of tasks. All this often requires a complete re-

shaping of the organizational structure of the firm

where all aspects of the organizational development

are consequently given attention. Hence, it is im-

portant to note that the firms are going through a

period of rapid modernization, emphasizing im-

proved production processes and flexible organiza-

tions that can address the needs of the market, as

part of transformations of the socio-economic fabric

to a market-driven economy. This may in part ex-

plain why ICT is combined with other factors, such

as new marketing strategies and organizational

change. Today there is a strong need to collect more

revealing data on ICT utilization and its impact on

SMEs, the need for more rigorous analysis of how

ICT investment and use affects innovation, and the

need for better understanding how this can translate

into productivity increasing and enhancing competi-

tiveness. How to correlate SMEs in the internation-

alisation processes or whether they only function as

suppliers in global value chains, dominated by large-

scale transnational enterprises, is an open question.

Without doubt, the current wave of internationalisa-

tion is accelerating the diffusion of innovation across

industries. Yet it is unclear whether SMEs are driven

by globalisation or whether they are a driving force

in this process.

It is clear from this study that ICT utilization is al-

ready having an impact on economic performance

among firms. This is reflected in the findings on the

impact of ICT on economic performance, where it is

evident that ICT is a substantial contributor to

productivity, profitability, and growth. Accordingly,

a new marketing strategy is particularly relevant for

translating the introduction and use of ICT into the

improvement of profitability. This is mainly because

the use of ICT together with new marketing initia-

tives enables firms to strengthen their position in

existing markets or enter new markets, thereby im-

prove profitability. ICT is particularly important for

lowering operational costs and increasing revenue.

In addition to identifying the immediate impact of

ICT on the economic performance of SMEs, it is

possible to identify how firms use ICT to improve

their future performance, namely through innova-

tion. ICT is only a minor facilitator of innovation; it

only becomes powerful in combination with a num-

ber of other complementary factors. The main fac-

tors contributing to innovation in SMEs are:

• changes in salary structure;

• training of staff;

• capital investment in equipment;

• organizational change;

• new market strategy.

In most of the sectors surveyed, ICT contributes

more to process innovation than to product and rela-

tional innovation. The use of ICT is thus mainly for

changes in production processes within the organiza-

tion, rather than the development of new products or

the furthering of relationships especially with sup-

pliers. It was found that relatively fewer firms report

decreasing costs as a result of ICT. Automation is

the adoption of control systems and ICT to reduce

ICEIS2012-14thInternationalConferenceonEnterpriseInformationSystems

284

the need for human work in the production of goods

and services. In the scope of industrialization, auto-

mation is a step beyond mechanization. Whereas

mechanization provided human operators with ma-

chinery to assist them with the muscular require-

ments of work, automation greatly decreases the

need for human sensory and mental requirements as

well. Automation plays an increasingly important

role in the world economy and in daily experience.

Automation has had a notable impact in a wide

range of industries beyond manufacturing (where it

began). In general, automation has been responsible

for the shift in the world economy from industrial

jobs to service jobs in the 20th and 21st centuries.

The result has been a rapidly expanding range of

applications and human activities. Design and manu-

facturing of products are important for information

technology industry and can assist design, imple-

mentation, and monitoring of control systems.

3 INNOVATION AND

TECHNOLOGY TRANSFER

Joseph Schumpeter is often mentioned as the first

economist having drawn attention to the importance

of innovation, defining five types of innovation

ranging from introducing a new product to changes

in industrial organization. The Oslo Manual clarified

the definition of the two more technical definitions

but still it appears that “innovation” is not easy to

define precisely. In 1999 in his key note speech

Mills gave some simple definitions:

1. Science: how to understand things;

2. Technology: how to do things;

3. Management: how to get things done;

4. Creation: bringing into existence;

5. Invention: devising something new or a new

way to do things;

6. Innovation: turning an idea into income.

According to David Archibald the innovation is a

science and explains what innovation and creativity

means by these simple formulas:

1. Creativity = Idea + Action

By this, Archibald means that the “idea” is just the

beginning to create something. People must do

something to bring the idea and create something.

2. Innovation = Creativity + Productivity

In reality the sequence is: get an idea, test or proto-

type it, produce a finished item and bring it into use.

In the case of artists this corresponds to: get inspira-

tion, sketch it, put it down on canvas, and finally

exhibit the work. For many businesses the ultimate

goal is the idea to produce profit. In this case inno-

vation must come from ideas that lead to sales.

3. Profitable Innovation = Innovation + Marketing

The innovation process is a combination of various

activities starting from research but including de-

sign, market investigation, process development and

may also include organizational restructuring, em-

ployee development, etc. Innovation implies creativ-

ity and dynamism that will benefit the company and

result in an higher standard of living. However, as a

conclusion it must be kept in mind that measurement

of innovation is very difficult. Technology transfer

is the process by which existing knowledge and

capabilities developed under public R&D funding

are used to fulfil public and private needs. Besides

an organization must become a learning organization

and there must be a constant and unstinting market

focus. Market and learning orientation are less for-

mal, less structured, and less sequential in SMEs

(Gibb, 1997; Meziou, 1991). According to Baker

and Sinkula (1999), learning-orientation “is a mech-

anism that directly affects a firm’s ability to chal-

lenge old assumptions about market and how a firm

should be organized to address it”. SMEs have a

natural advantage in that it is easier to create a learn-

ing environment in smaller organizations. Specifi-

cally, organizational learning is a workplace learn-

ing, which is a lower-level learning style involving

the use of existing knowledge to enhance operation

efficiency in SMEs (Badger et al., 2001; Chaston et

al., 2001). To expand, a learning organization can be

described as possessing:

1. commitment to learning: the degree to which an

organization values that which promotes a learn-

ing culture by believing that learning is key to

improvement and competitive advantage;

2. shared vision: an organization-wide focus on

learning, or direction of learning that is evident

across all levels of an organization;

3. open-mindedness: willingness to critically evalu-

ate the organization’s operational routine and to

accept new ideas by continually judging the qual-

ity of decisions and activities taken and percep-

tions about marketplace;

4. intra-organizational knowledge sharing: collec-

tive beliefs or behavioural routines related to the

spread of learning among different units within

the organization by having mechanisms for shar-

ing lessons learned in organizational activities

from department to department (unit to unit, team

to team).

ICTAdoptionandOrganizationalChange-AnInnovativeTrainingSystemonIndustrialAutomationSystemsfor

EnhancingCompetitivenessofSMEs

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4 ORGANIZATIONAL

STRUCTURE AND HUMAN

RESOURCES

A new flexible production system involves a lot of

changes into firm’s organization chart with the in-

creasing use of automation, often pointing out the

problem of the lack of trained staff. Indeed, very few

workers were able to actively practice with new

technology. This structure has to be modern and

efficient and its staff have to be extremely skilled.

Staff has to use the best technology available at the

moment in the market (PLC, systems control, nu-

merical controls, systems of automation distributed,

industrial PC, barriers of protection). The business

structure must integrate and elaborate information

coming from different sources. As it regards the

different business functions, they must be shaped so

that results are accessible from this information. It is

necessary to improve competences to allow solu-

tions of personalized automation. We analyse in the

detail the main competences. The technical person

must also take care of the management of the cars

related to specific phases of the production trial and

must verify the conformity of the result in compari-

son to the standards, affecting the necessary regula-

tions and intervening on possible anomalies. The

technical staff must be able to use the principal pro-

gramming languages and application, developing the

ability to work in team and for objective, using dif-

ferent methodologies, as for instance the project

management. The principal occupations are assem-

bled in the technical offices and in the centres of

research and development. Some unit profiles:

• the technician, in collaboration with administra-

tive personnel, develops experimental research-

es using all necessary competences for the car-

rying out of the activities;

• the engineer of trial is the person who knows

the trial that must be automated. In most cases,

he coincides with the planner (mechanic) head;

• the electric planner designs the structure of the

electric system that the cars and the different

uses of the production trial;

• the expert of field defines typology, position and

technical specifications of several sensors and

essential actuators to check and watch the trial;

• the planner of automatic controls is traditionally

also an expert of measures and covers the nec-

essary competences of an expert of field. They

define the control system architecture and the

specifications;

• the person responsible for maintenance is an-

other figure whose role is increasingly growing;

• the person of maintenance of automation must

know how to distinguish between corrective

maintenance and improved maintenance.

Then the role of management, it is to improve the

quality of the products, the flexibility, to reduce the

times of production, to adjust laws and rules and to

improve the use of the available resources. This is

possible by means of suitable choices of investment,

actions of marketing and naturally through an ad-

justed plan of production. This last phase must be

managed through a fit allocation of human resources

and with the control of the productive trials making

use of automation. As it regards the control of the

production trials, the principal problem is the quick

obsolescence of the firm’s products. The solution is

therefore the use of flexible systems of production

that develop, in an automatic way, different prod-

ucts. Therefore we can distinguish three types of

competences to recognize industrial automation:

• Methodological Competences. The figures have

technical competences, tied to the routine of au-

tomation;

• Technological Competences. Methodological

competences are realized in solutions imple-

mented through technologies therefore techno-

logical competencies are necessary for those

who are working with industrial automation;

• Competences of Trial. Automation requires

knowledge on the trials to automatize. Rather,

experience shows that the automation of a pro-

ductive trial often induces to find formal and

general descriptions of the same process;

• Technological Complexity. Technological com-

plexity should not be too far ahead of scientific

understanding as it would limit the commercial

viability of the innovation by being too sophis-

ticated for the end-user.

5 THE RESEARCH PROJECT

SMEs are generally resistant not only to training but

also to other forms of wider participation. Generally,

SMEs also engage in less management development

activities than larger firms. Managers in SMEs are

much less likely to have formal appraisals or discus-

sions on their training needs. SMEs must still provide

the ability for managers to learn by experience, bring-

ing their knowledge, skills and values into the work-

place and putting them into practice. Inevitably, these

resources are limited and sometimes inadequate. This

ICEIS2012-14thInternationalConferenceonEnterpriseInformationSystems

286

can be potentially harmful for an organization, sacri-

ficing the strength and consistency of its culture to

achieve short-term gain. AutoMatic project, titled

“Development of curriculum and innovative training

tools for industrial automation systems for people

employed in SMEs” addresses the problem of low or

missing overview about possibilities offered by indus-

trial automation systems. It develops approaches and

learning materials directed specifically to SMEs to

basically qualify staff in terms of industrial automa-

tion systems. AutoMatic has been selected for co-

financing under the Lifelong Learning Programme,

Leonardo da Vinci, Transfer of innovation projects

(2009-1BG1-LEO05-01640 - October, 1

, 2009 .

September, 30

, 2011, 24 months. The project web

page is: www.automatic-project.eu.

During the project has been developed an innovative

training approach e-learning platform, several learn-

ing contents and specific simulation tools in the field

of industrial automation systems which are applicable

in European SMEs. AutoMatic builds upon an exist-

ing approach developed in the pilot project “Interna-

tional Curricula of Mechatronics and Training Mate-

rials for Initial Vocational Training” for vocational

schools developed by Tallinn Technical University,

Estonia. The project consortium is composed by:

• Gabrovo Technical University, Bulgaria

www.tugab.bg (project promoter);

• ECQ - European Centre for Quality, Sofia, Bul-

garia www.ecq-bg.com (project coordinator);

• Tallinn University of Technology, Estonia

www.ttu.ee;

• CeRSI - LUISS Guido Carli University, Rome,

Italy www.luiss.it;

• Multidisciplinary European Research Institute

Graz, Austria www.merig.org.

Target groups are practitioners in SMEs who intend

to get an introduction and overview about industrial

automation processes are the main target group of

AutoMatic. The project also addresses students in

vocational education as end users as well as teachers

and trainers as intermediates. The developed prod-

ucts can support SME employees that want to im-

prove their qualification or re-qualify and need to

increase their flexibility with respect to market de-

mands and successful realization on the common

labour market. Between the results achieved, inter-

active training tools for industrial automation sys-

tems were developed. More specifically innovative

curricula and the following 5 training modules tar-

geted at SME management and staff:

• ICT Based Means for Automation and Innova-

tion;

• Sensors in Industrial Automation;

• Actuators in Industrial Automation;

• Application of PLC in Industrial Automation;

• Industrial Networks and Interfaces in Automa-

tion Systems.

In AutoMatic platform was integrated a “virtual

teacher” that speaks slowly, with a clear voice and a

perfect intonation. Therefore AutoMatic proposes an

innovative approach for the training with a virtual

teacher that holds the lessons, so that the distance

training is combined with a similar direct contact.

AutoMatic platform also offers auto-evaluation

forms through which the learners can verify the

acquired knowledge level. Such forms, at the end of

every subject, allow the worker to immediately

verify the acquired knowledge through the portal.

Four different sections were developed for each

training module:

• training courses;

• exercises;

• self-assessment;

• links & references.

The learning tools and materials are available in 5

languages: English, Bulgarian, Estonian, German

and Italian. The learning tools and materials are

available on-line, on dvd and on traditional booklets.

Some main results achieved (Casalino, 2009) are:

• increased flexibility of SME employees who

want to improve their qualification;

• increased motivation of target groups and their

commitment for life-long learning and career

planning;

• a good impact on the quality of vocational train-

ing and international co-operation in the area of

industrial automation systems by providing

time-saving and user-friendly approaches.

ICTAdoptionandOrganizationalChange-AnInnovativeTrainingSystemonIndustrialAutomationSystemsfor

EnhancingCompetitivenessofSMEs

287

6 CONCLUSIONS

Studies on the process of information technology

acquisition (Davis et al, 1994) clearly show that

these systems go through several evolutionary stag-

es. During this development the priority in order to

succeed doesn’t seem to be tied only to the acquisi-

tion process, but mainly to the paths of learning and

organizational change. Experience suggests that

these paths should be designed and carefully man-

aged in order to allow the acquisition and effective

use of ICT applications by the users and the whole

enterprise. The traditional methodology for the train-

ing, in fact, results incomplete to furnish a suitable

medium in the professional training field, because of

dynamic and continuous changes in the ICT sector

and the increasing demand of knowledge more and

more in the quality field (Casalino, D’Atri et al.,

2005). AutoMatic can contribute to the success of

the SMEs. The strategy is based on the creation of a

system for the training that meets the distance learn-

ing with the traditional benefits; therefore the two

different methodologies are integrated. In fact, on

one side the distance statement is a comfortable

method for the training of a vast entourage of people

within automation but, on the other hand a lot of

people doesn’t believe in the effectiveness of such

method of statement because of the lack of a teacher

that mostly involves the trainees. This research pro-

ject includes the analysis of some indicators and

specific key aspects that regard the current situation

of automation and innovation culture in the Europe-

an SMEs. These are:

• what is the current situation of quality aspects

dissemination through on-line courses?

• how are the main models used and applied?

• what role can have national agencies or institu-

tions, as the universities, on the diffusion of in-

novation culture or the implementation of auto-

mation for SMEs through both traditional and

web-based learning?

• how organizational and cultural specificities af-

fect automation implementation?

The importance of automation is increasing for the

reason that lack of quality control and assurance

systems, lack of accreditation and certification pro-

cedures, poor conformity marks, are still extremely

diffused. Such impediments are considered as major

potential and unnecessary technical barriers to trade,

especially concerning international competitiveness

and globalization. It is important to underline that

SMEs have to meet the challenges of globalization

and the new knowledge-driven economy aims.

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