KNOWLEDGE VALIDATION IN SMES

A. I. Bani-Hani, C. J. Hinde

Department of Computer Science, Loughborough University, Loughborough, U.K.

T. W. Jackson

Department of Information Science, Loughborough University, Loughborough, U.K.

Keywords:

Knowledge validation, SMEs, Barriers.

Abstract:

Knowledge Validation is a challenge in Small to Medium Sized Enterprises, SMEs, as most of the available

information is held in peoples minds as tacit knowledge, or saved on each employees PC without sharing or

common validation. This case study is based on a company in Leicester after installing an enterprise resource

planning (ERP) system. The underlying reasons for these problems were due to the distributed and tacitly

held knowledge where the assumptions in one part of the company were inconsistent with other parts. The

paper analyses the main problem of validating knowledge in more detail and has identiﬁed the consequences

of failing to do this. Challenges are discussed and highlighted in the paper, which concludes at the end the

importance of Knowledge Validation and identiﬁes some solutions.

1 INTRODUCTION

Implementation of an ERP system has always been

a hassle, where communication between employees,

the system, and the change management is a very

complicated process.

The difﬁculties in transferring the tacit and ex-

plicit knowledge into the ERP system, the validation

of this knowledge and the process of putting all of this

together into a knowledge management (KM) system

has been a challenge due to the barriers of installing a

KM in an SME which will be described in this paper.

This study was done as a case study at JCK Join-

ery, an enterprise based in Leicester specializing in

designing different kinds of door sets and windows.

JCK has 29 employees, 10 of whom work on design-

ing, planning and administration, and the others actu-

ally build the doors. Their customer base includes a

wide range of organisations.

Section 2 is a literature review of ERP systems

and KM. Section 3 describes howe the research is to

be conducted. Section 4 describes how things are be-

ing done without the ERP system. Section 5 gives

a description of the JCK ERP system and Section 6

desribes the barriers to implementation and the ex-

pected changes and beneﬁts of using this system.

The results are then discussed, followed by a con-

clusion and future work.

2 LITERATURE REVIEW

Enterprise Resource Planning, or ERP Systems, is a

complex process in practice. In theory ERP could

solve a lot of problems, by centralising the knowledge

into a database (Leknes, 2006).

The difﬁculties in transferring this knowledge be-

tween the different departments, and actors have

shown an interest in how KM may support an ERP

system (Haines and Goodhue, 2003).

KM is deﬁned according to the Knowledge Board

in 2004 as planned activities and processes for man-

aging knowledge to enhance the competitiveness

through better use and creation of individual and col-

lective knowledge resources (Sedera et al., 2004).

KM often relies on the information technology avail-

able which relies on capturing employee’s knowledge

and ﬁltering it according to the job needs. After this

and after gathering all of this tacit and explicit knowl-

edge and transferring it to the database of the system,

here comes the importance of the knowledge valida-

tion process! And without this (Probst et al., 2000)

validation process, ERP system loses its credibility

with employees and this is one of the things that hap-

pened in JCK Joinery, where employees no longer be-

lieve in the importance of the system.

Failure of the knowledge validation process, not

understanding what is happening with the system

354

I. Bani-Hani A., J. Hinde C. and W. Jackson T..

KNOWLEDGE VALIDATION IN SMES.

DOI: 10.5220/0003096803540357

In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2010), pages 354-357

ISBN: 978-989-8425-30-0

 2010 SCITEPRESS (Science and Technology Publications, Lda.)

and not contributing in the work usually leads to re-

jection of the system from employees. According

to Durikova and Gray (Durikova and Gray, 2009)

ERP System must be implemented with care in or-

der to encourage contributors to go for this challenge

and provide valuable points to get the desired results

from knowledge management system. They have also

noted in their hypothesis that contributing in the im-

plementation can enhance employees perception of

knowledge quality and their faith in the system.

According to one paper (Leknes, 2006), it was

found that some of the barriers to knowledge valida-

tion and knowledge transfer between different work

departments is caused by system unreliability and

lack of training as well as the information overload

and change management, and how this might be

solved by following a knowledge management com-

munication process between the implementer and the

people involved in the system.

The role of knowledge management is very im-

portant in a business environment as it increase the

interaction and share of knowledge between people

which enhances the organization’s overall knowledge

base.

ERP system integrates work between all func-

tional departments from Purchasing, employee’s

management, Scheduling, Inventory management,

production to shipping, and payroll management.

Then if ERP system’s can be this helpful to organi-

zations, and if it can solve problems in organizations,

why does it have many negative reports! What are the

barriers to using it?

3 METHODOLOGY

This research in JCK Joinery started by undertaking

business process analysis of the JCK Joinery busi-

ness processes then interviews, formal and in formal

was done with management, administration employ-

ees and with shop ﬂoor workers. Reviewing ofﬁcial

and unofﬁcial documents within JCK.

Interviews were repeated from time to time, and

lasted between 10 minutes to an hour with different

employees, and all information were gathered stud-

ied and a working plan were set in order. This re-

search also went through a study of different ERP sys-

tems and why JCK Joinery has chosen this product for

solving their business problems. Many factors have

affected JCK Joinery when choosing the product and

one of the main factors was the ﬁnancial issues along

with the requirements of the business.

Further study was done about how the processes

in JCK are done, the orders, purchases, certiﬁcation,

door making, and how all of these are done manually

by employees and how it can be customised into the

ERP system.

4 HOW THINGS ARE BEING

DONE AT THE MOMENT?

Work process ﬂow:

One of the main processes in JCK Joinery has

been studied by one the researchers which is the Pro-

duction process of a door, and here is a brief descrip-

tion of how things are being done:

1. A customer makes an order by email or by the

phone.

2. A quote is created by the estimator using spread-

sheet and sent back to customer.

3. The customer is asked to verify that the details are

correct.

4. If the quote is veriﬁed a pricing list is produced

using another spread sheet and then sent back to

the customer for approval.

5. The design and quote are then changed if they are

unacceptable.

6. If the quote and design are agreed it goes a de-

tailed design is made.

7. The design is then sent back to customer to sign

off the order.

8. Once the signed copy has been received this is

then passed on to the ﬂoor for production.

This process takes days to complete in JCK, and if

the order is a big one, for a new building with differ-

ent kind of doors, indoors, outdoors, security doors,

mobility doors, then this would take longer.

When a door is ordered a pricing spread sheet is

used to calculate the price of the door. With time the

estimator memorised the prices in it, and it has been

found that these have not been revised for the last two

years and not updated according to the purchasing or-

ders, which led to losing money.

This is one of JCK’s problems which is happen-

ing due to manual processes, and the errors occurring

because of it is huge.

For that the Conﬁgurator was proposed, in order

to be able to reduce the number of hours this is tak-

ing, number of errors as all information will be pulled

from a database, plus that every quote will be saved

into the system, no need for paper work.

KNOWLEDGE VALIDATION IN SMES

355

5 WHAT THE NEW SYSTEM

WILL PROVIDE FOR THIS

PROBLEM (CONFIGURATOR)

For the past few months a researcher have been work-

ing on a Conﬁgurator, and there was a lot of chal-

lenges in customising it, some of these are related to

the barriers mentioned below, which was caused of

lack of employees knowledge in IT basic tools, and

some others was due to the lack of encouragement

of using the ERP system. Employees no longer have

faith, and don’t believe in the change it would make.

One of the mistakes when doing the Conﬁgurator,

was its complexity as it was two pages, with more

than 100 boxes to ﬁll and pick, and that was confus-

ing to employees not knowingmuch about computers,

they refused to use it, as it was complicated and not

user friendly. So with interviews and tests including

employees in the steps, we have eliminated boxes and

made it simpler.

In the Conﬁgurator, which is an aid to design and

produce doors, one for an FD30 door, a standard door

for 30 minutes ﬁre rating, was changed about 4 times.

The ﬁrst one didn’t have all requirements for the door,

and the second was too complicated for employees,

with showing and hiding ﬁelds facilities, and then af-

ter sitting with the estimator and discussing things

thoroughly we have found that these are the only re-

quirements for the FD30 door unless there was spe-

cial cases which we will not go through at this stage

of the implementation. After showing this to every-

one in JCK it was discussed that going through this

might take longer time than required and the best idea

if we can set defaults for making this door. Once you

open it, you have all defaults for an FD30 door and

then you just check and do any changes if required,

this will minimise the number of errors and reduce

the time required for making any quote.

Defaults were all set, and the ﬁnal Conﬁgurator

for this door was ready to be used.

In this Conﬁgurator there were some requirements

to choose from ﬁrst, things like Mobility, Secure by

design, Chain of Custody, ﬁre rating and location.

Then the structural opening, which will be allocat-

ing the height and width, and ﬁnishing with the glass

and hardware attached to the door. All of these boxes

are attached to the database, where all parts used in

JCK are listed, and connected to purchasing orders to

be able to pull prices and to calculate the door price

when doing the quote.

And here we have faced another problem which

was with validating the knowledge in the Conﬁgu-

rator. Employees were saving prices differently into

their excel sheets, using what they have which wasn’t

up to date and prices were very different from.

And here we started gathering receipts, talking to

the employee doing all the purchasing, and trying to

verify prices, and do all the mathematical equations

to get the right door price, and while going through

this process, another problem was found which was

with the different names of the parts used in the door

making. Employees know different ways of naming

the products and were refusing to change to the new

names which were required by the ERP system, and

which are used when purchasing. Some were saying

how hard it is to use this format of names, for that

we had to ﬁnd a way to write them differently were

everybody can work on the system.

All part names were printed out from the ERP sys-

tem, and there was around 3000 parts available there,

and have decided on one person who would take the

time to do this job, remove un used parts which were

added two years ago, rename the parts with the help

of the researcher and go through the prices, and try-

ing to verify them with the purchasing order. Some

were named with the manufacturer ﬁrst, others with

the kind of hardware, some was depending on the

height and width of the door. Rules had to be set for

the name and how to deal with them in the Conﬁgu-

rator.

Working on this along with the ERP system

Provider Company and the researcher, veriﬁcation of

prices have been done and the testing process is in

progress.

Hypothesis (1):

Conﬁgurator may work, solving all the validation

problems in JCK Joinery and will eliminate all kind

of errors that was happening earlier!

Hypothesis (2):

Conﬁguratormay work faster than the excel sheets

used in the quotes orders.

Hypothesis (3):

When Conﬁgurator works properly this will affect

the quality of work positively and make the business

ﬂow easier.

6 PROBLEMS AND BARRIERS

According to previousresearchon JCK, problems that

led to the need of an ERP system, barriers to installing

and using it have been listed as follows:

Problems:

• Loss of information, documents are not ﬁled and a

lot of paper work ﬂows through the organisation,

which makes it easy to mislay or lose.

• Sales enquiries are not tracked, so ﬁnding a job

needs to be done manually, which takes time.

KMIS 2010 - International Conference on Knowledge Management and Information Sharing

356

• Staff retirement or attrition - when employees

leave or are off on holiday, it becomes near im-

possible for employees to take over their work.

• When a customer enquires about a new job pric-

ing and product details are calculated manually,

taking long time, especially for big orders.

• Data is entered manually into spread sheets,

which increases the risk of incorrect information.

• Accounting problems - if an invoice is lost, long-

term funding problems occur.

Barriers:

1. Low tech SME’s attract people with low educa-

tional skills, as educated people prefer larger or-

ganisations where salaries are higher and work sit-

uations are more stable.

2. Unskilled employees make it difﬁcult to imple-

ment an ERP system, as they require many hours

of training.

3. No motivation for employees to use the new sys-

tem.

4. Lack of training due to ﬁnancial costs and lack of

time.

5. Lack of process mapping, a map should deﬁne ev-

ery activity at the organisation. It must include a

step-by-step process for information ﬂow.

In JCK this system had been installed, two years

ago. And until now had not been used properly, em-

ployees still use spread sheets to make orders, cus-

tomer quotes, and even when printing orders, they use

a customised template in a word document where ev-

erything is written manually.

Due to the barriers listed earlier, JCK was not able

to make the system work, employees with low skills,

and lack of training, ﬁnancial problems have led to

this failure.

7 CONCLUSIONS

Knowledge Validation is an important aspect to any

organization and this case study has presented the

problems at JCK, what solutions were presented and

what were the barriers to these solutions.

This paper has identiﬁed and analysed problems

and barriers, in particular resistance to change.

Some limited conclusions may be drawn, ﬁrst is

that even though the user gives a thorough speciﬁca-

tion there is a mismatch between what the user claims

to want and what they actually want. Secondly, there

is an internal resistance to change evidenced by the

number of Conﬁgurators offered to the user and the

persistent complaint that they were too complex.

The system of spread sheets used by JCK was no

more complex than the Conﬁgurators offered but it

was familiar. The newest Conﬁgurator has many of

the properties of the old Conﬁgurators but is becom-

ing accepted. A great deal of training is required.

The next phase of this research would be to prove

changes the Conﬁgurator would make to JCK and

identify effective ways for improving the business.

The barriers and problems have been identiﬁed and

will go through a validation process to make the

change to JCK and be able to help other SMEs like

JCK solve their business problems.

REFERENCES

Durikova, A. and Gray, P. (2009). How knowledge valida-

tion processes affect knowledge contribution. Journal

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Haines, M. and Goodhue, D. (2003). Implementation part-

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of ERP implementation. International Journal of Hu-

man Computer Interaction, 16:23–28.

Leknes, M. (2006). The role of knowledge management in

erp imlementation: A case study in Aker Kvaerner.

In Proceedings of the 14th European Conference on

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Probst, G., Raub, S., and Romhardt, K. (2000). Managing

knowledge-building blocks for success. Wiley, Chich-

ester.

Sedera, D., Chan, T., and Gable, G. (2004). Knowledge

management as an antecedent of enterprise system

success. In Proceedings of the tenth Americas con-

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