Digital Platorms as Knowledge Artifacts for Clusters of SMEs

Aurelio Ravarini and Luca Cremona

School of Industrial Engineering, Università Carlo Cattaneo – LIUC, C.so Matteotti 22, Castellanza (VA), Italy

Keywords: Cluster of Firms, Digital Platforms, Knowledge Sharing, Knowledge Management Systems, Knowledge

Artifacts.

Abstract: Previous studies widely focused on the adoption and usage of Knowledge Management Systems within a

single organization or within supply chains providing little explanations of the relations behind knowledge

sharing through a digital platform and performances in a cluster of firms. To overcome this void we adopted

Knowledge Artifact as a driving concept, and carried out a systematic literature review over 200 articles and

identified a theoretical framework that extends the limitations of previous studies basing on three main pillars,

then applied this framework on a multiple case study conducted on six SMEs within a cluster of firms in Italy.

The results contribute in explaining the variables that influence performance of firms using a digital platform

and allow better defining the concept of knowledge artifact according to the situated perspective.

This article has been developed under the DiDIY project funded from the European Union’s Horizon 2020

research and innovation programme under grant agreement No 644344.

1 INTRODUCTION

Contemporary organizations have set the effective

use of information and knowledge resources as an

important goal to reach. More than ever, they are

deriving value from intellectual rather than physical

assets and they are benefiting from the most

profitable resource: employee knowledge. The

identification and exploitation of these resources is

becoming central to organizational success (Roberts

et al. 2012). Knowledge exists in several locations

within an organization, including culturally

embedded practices, documents, policies and with

individual employees (Grant 1991, Grant 1996,

Nonaka and Takeuchi 1995, Cremona et al. 2012).

With the growing, strategic, importance of

knowledge management more firms are

implementing knowledge management systems

(KMS): “a class of information systems applied to

manage organizational knowledge” (Alavi and

Leidner 2001, p. 114). It is relevant not merely to

design IT tools to manage knowledge sharing but also

to understand how to select and manage knowledge

resources. This approach, already critical when

dealing with knowledge management in a single firm,

becomes a strict requirement within inter-

organizational context. Many studies focused on the

introduction of KMS within a single firm (Levine and

Prietula, 2011), leaving almost unexplored the issue

at the inter-organizational level, with the exception of

a particular type of meta-organizations: supply

chains. The case of industrial clusters, increasingly

claimed as pillars of the several national economies,

is marginally studied from the perspective of one of

organizational mechanism that enable their success,

i.e. knowledge sharing.

To cover this gap, we adopted the concept of

Knowledge Artifact and studied the variables

affecting the impact of digital platforms on the

performances of clusters of firms.

2 THEORETICAL

BACKGROUND

2.1 Digital Platforms for Social

Networking

In recent years, social networks have become a core

topic widely discussed within the Information

Systems field. Although mainly born for individuals’

socialization purposes, social networks have been at

the centre of attention of firms. Several authors

discussed the usage and impact of social networks on

firms’ users and their different types of interactions.

474

Ravarini, A. and Cremona, L..

Digital Platorms as Knowledge Artifacts for Clusters of SMEs.

In Proceedings of the 7th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management (IC3K 2015) - Volume 3: KMIS, pages 474-480

ISBN: 978-989-758-158-8

Ellison and Boyd (2013), describe them as “a

networked communication platform in which

participants 1) have uniquely identifiable profiles that

consist of user-supplied content, content provided by

other users, and/or system-level data; 2) can publicly

articulate connections that can be viewed and

transferred by others; and 3) can consume, produce,

and/or interact with streams of user-generated content

provided by their connections on the site”.

Other authors stressed the importance of

representing interactions among users using social

graphs or activity graphs (Heidemann et al. 2010;

Berger et al. 2014). Barabasi et al. (1999) focused on

social network theory while Granovetter (1973) and

Shi et al. (2014) discussed the concept of “strength of

weak ties”. Moreover, seminal papers in Information

Systems (from here on IS) field (Borgatti et al. 2011)

discussed the importance of using methods of social

network analysis for mapping relations and

influences between actors in a network.

We can observe a growing interest around social

networks applications defined as “digital platforms”

(from here on DP) for managing knowledge and

information sharing. IS scholars have been discussing

their benefits on collaboration, communication and

knowledge sharing (Majchrzak et al. 2013; Berger et

al. 2014; Newell 2014). Muegge (2013) defines such

a platform as “a set of technological building blocks

and complementary assets that companies and

individuals can use and consume to develop

complementary products, technologies and services”.

In a state of the art classification of technological

platforms, Gawer & Cusumano (2014) have

investigated how digital platforms (they call

“externally focused industry platforms”) affect

innovation.

2.2 Clusters and IS Research

According to Porter (1998): “clusters are geographic

concentrations of interconnected companies and

institutions in a particular field” (Porter 1998). From

an IS point of view, clusters are a kind of inter-

organizational entities. IS scholars widely studied

inter-organizational information systems (IOIS)

dealing with different objects of analysis and

underlying theories (Kumar et al 1996; Malhotra et al.

2005; Chi et al. 2008; Romano et al. 2010). Several

authors presented the central role of IOIS as the link

to other organizations (Kaufman 1966; Barret and

Konsynski 1982; Cash 1985; Johnston and Vitale

1988; Meier and Sprague 1991).

Taking into consideration the fields of

application, few IS scholars focused on industrial

aggregations since Kumar et al. (1998) seminal paper

(and his following studies) about clusters. Rather,

several studies took place in Business-to-Business

(B2B) context, studying the effects of IT on firms

performances within supply chains (Chang et al.

2011; Cheng 2011; Venkatesh et al. 2012).

Only relatively recently Pavlou et al. (2010)

studied the ability of industrial clusters to enable

innovation and competitive advantage by fostering

collaboration among firms thanks to a better

knowledge and information sharing among users.

Other papers investigate the role of online

platforms for enabling SMEs to act jointly on the

market for common purposes (Konstadakapulos

2005; Bastías et al. 2014), or study the supplier-

customer relationships in a cluster (Kumar et al. 1996;

Bakos et al. 2008, Im et al. 2008). Several authors

recognize that assessing the value of digital platforms

is both important and complex due to the need for

analysing the multifaceted relationships (such as

competition and co-design besides the default

supplier-customer ones) that firms in a cluster face

(Yoo et al. 2010; Yoo et al. 2012; Henfridsson et al.

2013).

2.3 Digital Platforms in Clusters of

Firms

Recent literature has taken into consideration the DP

capability to enable and improve the communication

within groups (Mansour 2009), the generation of

knowledge (Wasko and Faraj 2005), and the diffusion

of information (Singh 2005; Nieves and Osorio

2013). Murphy and Salomone (2013) studied the

usage of social media technologies applied for

enabling knowledge transfer and “optimizing the

management of tacit engineering knowledge”.

Previous studies mainly focused on the inherence

processes of knowledge sharing and management by

digital platforms, yet rarely speculated upon the

objective and consequences of such processes.

In synthesis, the role of DP as an enabler of

knowledge sharing in an IOIS has been studied, but

a) mainly in supply-chain contexts (based on

“vertical” supplier-customer relationships) rather

then in clusters, characterized by peer-to-peer

interactions; b) with a limited understanding of the

role that the DP can actually play in favour of the

cluster.

Our paper stands out of this previous literature in the

attempt to overcome these research gaps. To such

aim, we introduce the concept of Knowledge Artifact.

Digital Platorms as Knowledge Artifacts for Clusters of SMEs

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2.4 Knowledge Artifact Definitions

According to Cabitza and Locoro (2014) a

Knowledge Artifact can be described following two

different approaches: a representational approach and

a situational approach. The first one sees knowledge

as an entity: a KA is a representation of certain

amount of information that is inextricably related (on

the physical side) to the physical supports (paper,

hard disks, KMS) through which it is memorized and

managed, and (on the abstract side) to its semantics

and possibly its ontology.

The situated perspective – on the contrary – sees

knowledge related to processes such as innovation,

decision making and learning. A KA “cannot be

decoupled, nor generalized, from the specific setting

or Community of Practice, or from the boundary

between communities where the KA is supposed to

play its role of knowledge facilitator and transfer

medium.” (Cabitza Locoro 2014).

The aim of this study is to exploit “knowledge

artifact” as a reference concept to describe the

enabling role of a DP as a tool for knowledge sharing

in a cluster, and understand what are the properties

that can make it relevant for the business value.

2.5 Knowledge Sharing

Knowledge sharing can be studied from two main

perspectives: strategic and organizational. A

preliminary literature review showed as reference

topics for these two perspectives - respectively -

“joint activities” and “knowledge management

systems”. Given the interest to understand the effect

of DPs on the value of the cluster, a third topic of

interest was identified in the IS literature of “business

value of IT”. On these three topics we performed a

systematic literature review (Okoli and Schabram

2010), querying the JSTOR database for papers from

1990 to 2012. 110 papers with full text were

identified and their references were retrieved and

selected. As a result, 60 articles were reviewed in

detail, allowing to draw a picture of the state-of-the-

art of the literature on the three topics, reported in the

following.

Joint activities are activities performed between

different organizations involved in alliances or

collaborating jointly on the market (Kent, 1991). Past

studies mostly focused on the creation of alliances

(Richardson 1972, Porter and Fuller 1986, Gulati

1998, Siggelkow and Levinthal 2003, Beckman et al.

2004, Oxley and Sampson 2004, Lavie and

Rosenkopf 2006). These studies do not explicate

which kind of activity, if performed jointly, leads to a

better competitive position on the market. Moreover,

this literature mostly focused on strategic issues

doesn’t take into account the role of IT (i.e. digital

platforms) as potential enabler of new joint activities

between firms.

KMSs are information technology-based systems

coupled with knowledge-sharing practices that

support knowledge management efforts within an

organization (Alavi and Leidner 2001). In the past,

studies mostly focused on the adoption and usage of

KMS within single firms (Gold et al. 2001, Schultze

and Leidner 2002, Eisenhardt and Santos 2002, Kim

and Lee 2006, Ko and Dennis 2007). These studies

described the mechanisms that facilitate and inhibit

the knowledge and information exchange limitedly to

an intra-organizational level, while our paper

investigates the effects of knowledge sharing through

a digital platform in an inter-organizational context, a

cluster of firms.

Business value of IT refers to the impact of IT on

organizational performance measures such as

productivity enhancement, profitability

improvement, cost reduction, competitive advantage,

inventory reduction (Devaraj and Kohli, 2003). Past

studies mostly focused on the effect on firms’

performances provided by specific IT tools – such as

ERP systems – both at the intra-organizational level

and within supply-chains (Bharadwaj 2000, Ray et al.

2005, Chang et al. 2009, Yoo et al. 2010, Sarker et al.

2012, Resca et al. 2013). To our knowledge, no

previous attempt has been done to study the business

value of IT of a digital platform in a cluster of firms.

2.6 Research Framework

Despite the research gaps identified for each of the

three topics studied, the systematic literature review

allowed to recognize a limited set of papers (Malhotra

et al. 2005, Dong et al. 2009, Reagans et al. 2003,

Nieves et al. 2013) that proved closer to the aims of

our work and they were taken as a point of reference

for the research. These papers allowed to create a

theoretical framework, based on three variables that

influence the performance of the cluster:

 the capabilities of the DP, i.e. a set of factors (the

presence of a social network between firms, IT

managerial skills, capabilities of the IT system)

influencing the IT business value of the DP;

 the strength of interpersonal connections among

the entrepreneurs of the firms of the cluster;

 the joint activities between firms.

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Figure 1. The constructs of the theoretical framework.

3 METHODOLOGY

A multiple-case study methodology (Stake 2006, Yin

2003) together with a positivist approach (Benbasat

et al. 1987) was chosen for exploring our theoretical

framework on knowledge management systems

within a cluster of firms. A qualitative method was

adopted both to explore the factors that facilitate the

usage of a digital platform by firms in the same cluster

and to understand how the information exchange is

influenced and which are the effects on performance

of each firm. A team of a junior researcher, a senior

researcher and a professor collected all the data and

analysed them: this approach was helpful in capturing

greater findings and maximizing reliability.

Following Yin (2003) a case-study protocol was

designed including the following sections: overview

of the project (objectives and issues), field

procedures, questions, and guidance for the report.

3.1 The Digital Platform of the Study

During the first half of 2012, 27 firms of the Energy

Cluster (a cluster of SMEs located in the Lombardy

Region in Italy, specialized in services and products

supply for the production of electricity) started a

project to develop a Digital Platform with the purpose

of improving internationalization. The DP has the

typical features of a social networking platform (e.g.

company profile pages, online walls to publish posts,

online thematic groups with limited access). The

users of the DP (typically CEOs, entrepreneurs,

operations, sales or marketing managers) have access

to a unique information system, shared among the

firms of the cluster, to collaborate, design and

improve their internationalization by developing joint

activities to enable the entrance in new markets, by

implementing shared procedures for the management

of joint supplies, by using shared tools to manage

firms’ and cluster’s activities.

During 2014, the cluster achieved several

objectives. First, all the communications about

internationalization have been aggregated and

distributed through the DP, a unique source of

communication, rather than flowing through different

ungoverned channels (eg. emails, newsletters,

meetings). Second, every firm has an account for the

platform and a profile page describing in detail

competences and products. Third, the number of

firms has increased from 27 to all firms inside the

cluster (almost 100). These result were made possible

thanks to a systematic community management

strategy: story telling about events, trade fairs and

events promoted within the Energy Cluster territory.

3.2 Data Collection and Analysis

As suggested by Yin (2003) we followed a multiple

informants design by identifying 6 firms to be

investigated and involving key employees. A

questionnaire was developed basing on the theoretical

framework (Figure 1) and was used to carry out

interviews in each firm to the CEO or its

representative a/o the marketing and sales manager.

To get a higher data reliability the interviews were

carried out in two different timings: at the beginning

of the project and after one year the firms were using

the platform. Together with the interviews, in order to

increase the validity of our coding and data analysis

procedure, we aggregated multiple sources of

evidence (Yin 2003): artefacts (i.e. extracts from the

platform), documents from each firm (about

performances and financial situations) and

information from websites. Cases, were chosen for

enabling theoretical and literal replications (Yin

2003): at least two firms with relatively high

involvement in the project, and two firms with

relatively low involvement in the project.

All interviews were tape-recorded and

transcribed: the transcripts from the 17 interviews

were aggregated into a case protocol helping the

researchers in organizing data. The projects were

encoded and structured using the software NVivo 10

following a grounded theory approach (Strauss 1987,

Glaser 1992).

4 RESULTS

The following paragraphs present the most relevant

results for each element of the framework and try to

categorize different uses of the platform.

Digital Platorms as Knowledge Artifacts for Clusters of SMEs

477

4.1 Capabilities of the Digital Platform

The community of the cluster showed a high, though

decreasing along time, resistance to the usage of the

DP. Maybe this is due due to the average perception

of the role of IT: some firms look at IT as a tool to get

better control of the business (Firm 2, Firm 3, Firm 4,

Firm 6); others look at IT as a tool to substitute

humans labour and, therefore, to reduce costs (Firm 1

and Firm 5). Surprisingly, almost each firm did not

have a formal and structured IT development plan.

Despite this initial resistance, firms started using

the DP, but not before a transitory phase of limited

usage, considered necessary by each firm to

understand the dynamics of interaction within the

online community and to quit doubts about the risk of

loosing their own competitiveness because of

exchange of critical information.

With regards to information exchange the DP is

effective: firms on line interaction is based on natural

language, with no need to translate data shared in the

DP. Moreover, firms recognize the coherence

between the knowledge shared inside the cluster

(mainly referred to products and services) and the one

available through the DP.

4.2 Joint Activities

Traditionally, firms in the cluster have been acting as

single players: joint activities are seen with diffidence

and the cluster is seen as a context with the

opportunity to meet potential customers and

suppliers, but also competitors. “…from our point of

view, within the Energy Cluster since there are not

suppliers, the only collaboration was with

customers…” (Head of Special Projects, Firm 1).

“…participating in the cluster means…we think it is

useful, we still need to know the best interaction

possible. The interaction with competitors is always

difficult to manage but inside the Energy Cluster we

have suppliers too…” (Marketing Manager, Firm 2).

This negative attitude smoothly decreased in parallel

with the increase of usage of DP, generating a

virtuous circle towards joint activities.

4.3 Strength of Interpersonal

Connections

The usage of the DP reinforced the strength of the

interpersonal connections existing between the

entrepreneurs by raising the frequency of their social

and business meetings. Each firm is aware of the

activities and products made by other firms of this

research. This is happening even if they did not

experience any joint activity before. More, we

investigated if each manager interviews had specific

connections out of the workplace. What is emerging

from this analysis is that firms have average

knowledge of each other. Firm 5 only is the most

isolated among them; this is partly due to its peculiar

activities within the Energy Cluster.

4.4 Performance of the Firms

Firs recognize a positive impact of the DP on the

internal operational efficiency. The DP is considered

as a tool that could boost the growth in new markets

thus overcoming the traditional focusing of SMEs on

production and cost reduction. Moreover, the DP

positively influenced the selection of new suppliers

and vendors proving to be an effective marketplace

for new products and services promotions. With

respect to the aim of internationalization of the

cluster, the firms using the digital platform

recognized to gain benefits from a better

understanding of new and emerging markets thanks

to the knowledge shared through DP by other firms

operating in such markets.

5 FINDINGS, LIMITATIONS AND

FUTURE RESEARCH

Results of this multiple-case study showed how the

usage of a digital platform contributed to reinforce

connections between the firms. Knowledge sharing

within the cluster was enhanced by mechanism of

information and knowledge filtering and selection

that positively impacted on competitive advantage.

The determining factor in the success of an inter-

organizational digital platform, such as the one

presented within this paper, is not related to its

potential of generating competitive advantage only,

but it is strongly related to its long-term sustainability.

The core factor is the awareness of the power to

generate knowledge sharing from and within the

digital platform itself, thus producing benefits hard to

replicate in the long term.

From the point of view of the KA, the study shows

that the DP in cluster of firms can be considered an

emblematic case of the situated perspective. The

knowledge shared through the online platform is

strongly intertwined with the specific characteristics

of the firms, or better, the employees using the DP. In

fact, the evolution in their approach to the DP

determined an increased effectiveness of the KA as a

whole.

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Moreover, we believe that the three identified

constructs composing the research framework (IT

capabilities, joint activities, strength of interpersonal

connections) are candidate variables that could be

used to better describe and possibly qualify a KA

according to the situated perspective. Limitations

from previous studies (e.g. Cabitza & Locoro 2014)

regarding the interconnections between the business

value and KA were investigated. This research

extended previous studies by verifying that KA is

affecting the business value of firms, enforcing

interpersonal connection and enabling joint activities.

This study has some limitations. Firstly, we

studied a sample of 6 firms among the 28 pool of

firms using the DP. Secondly, the research considered

only a specific cluster. Further research will aim at

either studying larger samples of firms in order to

increase generality and generalizability of the current

findings, or applying the same study to different

clusters in different countries, to check if the cultural

environment could lead to different results.

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