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«POWER RELATIONSHIPS THAT LEAD TO THE DEVELOPMENT OF FERAL SYSTEMS Don Kerr Luke Houghton Griffith University, Queensland Australia Email: ...»

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Australasian Journal of Information Systems Volume 14 Number 2 June 2007

POWER RELATIONSHIPS THAT LEAD TO THE DEVELOPMENT OF FERAL

SYSTEMS

Don Kerr

Luke Houghton

Griffith University,

Queensland Australia

Email: d.kerr@griffith.edu.au

Kevin Burgess

Queensland Rail

ABSTRACT

This research identifies factors affecting the operation of a supply chain in a large, asset rich transport utility, and how a recent Enterprise Resource Planning System (ERP) implementation was perceived with respect to its usability for the task. A lack of trust in the ERP, ineffective training methods and complexity in extracting the data from the ERP were identified as a problem which lead to the development of “Feral Systems” (systems outside the accepted ERP or corporation condoned information systems – sometimes called skunkworks). This research uses an interpretative case study approach to gain insights into the human sense-making within the study organisation. The research argues that power relationships between operational managers and financial managers and processual power relationships between operational managers led to the development of these systems.

Key words:- Enterprise Planning Systems, Power, Feral Systems

INTRODUCTION

The implementation of enterprise resource planning systems (ERP) provides many advantages for the companies involved. These include the integration of information technology and all the competitive advantage possibilities associated with improved data access (Heizer and Render 2003).

However, these advantages are not always easily achievable with many ERP implementations not producing the results expected and in some cases implementation projects are classed as failures (Umble, Haft and Umble 2003). This paper investigates end-user perceptions and power relationships within the supply chain of a large, asset rich transport utility in an effort to identify some of the possible reasons for these failures; in particular, this research investigates the development and use of information systems for use outside the organisationally condoned ERP.

To date there has been little research into the impact of ERP implementations on employee’s Australasian Journal of Information Systems Volume 14 Number 2 June 2007 motivation to develop their own information systems to supplement or replace the corporately endorsed system. This research looks into this aspect using a single case study approach. The research seeks to more fully understand the methods employees use to overcome ERP implementation problems. For example, previous research has highlighted many cases of end-user development of information systems and the resultant problems invariably associated with this approach (Kreie, Cronan, Pendley and Renwick 2000) and (McGill and Klobas 2005).

This area of research was initiated when it became apparent that end-user development was a significant factor in the way operational managers approached their work. This end-user phenomenon became a dominate theme throughout all stages of a series of interviews conducted within the case study organization (described later in this paper). Because of the unique features of these end-user developed systems, they have been described as “feral systems” by Houghton and Kerr (2006).

A feral system is defined as “an information system [computerised] that is developed by individuals or groups of employees to help them with their work, but is not condoned by management nor is part of the corporation’s accepted information technology infrastructure. Its development is designed to circumvent existing organisational information systems” (Houghton and Kerr 2006, p 137). We contend that the feral system example is indicative of a general unease with the corporate approved information system by employees and that these are developed because of power tensions between financial and operational managers. In addition it is our contention that processual power relationships between operational managers lead to the formation of coalitions to help overcome these power tensions and to circumvent the existing ERP in an effort to improve work processes at the operational level of the organisation.

Previous research indicates that power relationships play a major role in ERP implementations, for example; Nandhakumar, Rossi and Talvinen (2005) have suggested that n “imbalance in power relations between two divisional heads might restrict the progress of IT projects [and that] a strong hierarchical culture may prevent users from interacting directly with the designers of the technology” (page 225). The research outlined in this paper expands on the power imbalance suggestion by Nandhakumar, Rossi and Talvinen and contends that there are power relationships within the case study utility and that this power is having a major influence on the way that employees view the organisation and how they interact with the implemented ERP.

One power play that is apparent is processual power. Jasperson, Carte, Saunders, Butler, Croes and Zheng (2002, page 401) describe processual power as “part of the decision making sphere and micropolitics of organisational life. Decisions and priorities involved in negotiations are emergent phenomena” They also refer to (Fincham 1992 p 743) who suggests that power lies "not in concrete resources but in strategies like coalition-formation and the manipulation of information that protagonists employ in the power game". The first proposition in this paper is that processual power is a driving force in the development of feral systems and this proposition is tested using the following case study.





The consideration of power in the analysis of this data is consistent with Foucault’s assertion that “every relationship is a power relationship” (Avgerou and McGrath 2007). In this paper, the we assert that processual power is one of the driving forces in the development of feral systems as they are usually developed through the coalition of operational managers and their manipulation of information in parallel to or instead of the existing ERP system. As Jasperson et al (2002) indicate, processual power involves coalition formation and information manipulation and we contend that these are the basic ingredients in feral systems development. Boonstra_and de Vries (2005) also cite Fincham (1992) and suggest that the power concept when related to inter-organizational

systems can be viewed from the following perspectives:

Australasian Journal of Information Systems Volume 14 Number 2 June 2007

1. processual power

2. institutional power and

3. organizational power.

Boonstra and de Vries go on further to say that “processual power is in the socialinteraction between interest groups” and “Institutional structures of inequality form the external bases from which power is mandated to organizations. Organizational power is embedded in the internal structure of organizations” (page 489).

Other authors (Waddell, Devine, Jones and George 2007) have described power in terms of the

different types of power namely:

1. Legitimate power where the power is legitimized through the position the person holds within the organization

2. Reward power where the manager can give or deny rewards such as promotion or pay rises

3. Coercive power where the manager can punish others

4. Expert power where the power is based on special knowledge and skills possessed by the manager or others.

5. Referent power where the power comes from the personal respect and admiration given by subordinates.

6. Information power where the power is based on controlling information needed by others.

It is proposed in this paper that another reason for the development of feral systems is associated with an employee backlash against the other types of power being exerted by financial managers.

These could include legitimate, reward, coercive, expert and information power that leads to the decision to implement a system that is not considered ideal by operational managers. This second proposition is also tested in the following case study.

THE CASE STUDY

The organisation used for this study is a large, networked transport utility. It is an essential utility service within Australia and has been operating since the 1860’s. Utilcom (a pseudonym) has a global reputation for providing innovative and performance driven services, for example Utilcom employees advise and consult similar utilities at an international level on a regular basis. The corporation has an annual turnover of over 2 Billion dollars (AUD) and over 13,000 employees.

Utilcom recently implemented the ERP, SAP R/3. SAP (Systems Applications and Products in Data Processing) is a provider of business software solutions designed to integrate information technology resources for companies. The website describes their company as “Serving more than 36,200 customers worldwide, SAP is the world’s largest business software company and the world’s third-largest independent software company overall. Today SAP employs more than 38,400 people in more than 50 countries. Our professionals are dedicated to providing the highest level of customer service and support” (SAP 2006, about us section). A full description of the SAP R/3 ERP is also shown on their website (SAP 2006).

The implementation was designed to improve reporting and other functions. The process involved conversion from an earlier version namely, SAP R2 to SAP R3 for 6,000 users. The modules

Australasian Journal of Information Systems Volume 14 Number 2 June 2007

involved in the implementation were: financial; material management; logistics; forecasting and planning; materials resources planning (MRP); human resources; information systems including executive information systems; project management; and office integration.

The research project reported in this paper was conducted as two stages. The first stage was designed to develop an understanding of the basic social, technical and political workings of the supply chain and how each of these factors interacted with each other. This first stage involved 31 semi-structured interviews with key stakeholders (operational managers, financial managers and other experts) along a supply chain associated with Utilcom. Interviews were conducted with a range of people from human resource personnel to operational staff and included the supply chain partners. The interviews were conducted to determine important elements in each individual’s job and how they related to the supply chain. This resulted in a substantial database of 157,000 words in 230 pages of transcript. The supply chain in question was an integral part of infrastructure building and maintenance for Utilcom and involved two other organisations, one was the manufacturer of the product and the other transported the product to the primary distribution point.

This first stage of the research pointed towards concerns about the future usefulness of the yet to be implemented SAP R/3. For the purposes of this paper we will refer to the first stage of the project as Stage one and the second as Stage two. In Stage two, 16 semi-structured interviews were conducted with previously identified experts in the Utilcom supply chain. These experts were identified as key personnel within the supply chain by the research team and in consultation with the General Manager of the supply division of Utilcom. The object was to gain a better understanding of the important social factors associated with the ERP implementation.

The expectations of the new implementation were manifold and the supply division of Utilcom considered SAP R/3 to be a useful system for determining inventory levels and transactions across the whole supply chain. However, the results from interviews conducted during Stage 1 of the research showed that some concern was expressed about understanding the day-to-day operations of the supply chain.

METHOD

This research is an interpretative case study approach (Klein and Myers 1999, Walsham, 1993) that attempts to gain insights into the human sense-making within Utilcom. The approach is to find an understanding of the situation as described by Klein and Myers (1999) “through social constructions such as language, consciousness, shared meanings, documents, tools and other artifacts (page 69).” This interpretative approach lends itself to a case study research method (Yin 1994, Stake 1995) using a combination of evidence sources as also advocated by Klein and Myers (1999). The sources used in this inquiry are described in Table 1.

–  –  –

Three months was spent at the headquarters of Utilcom and this time enabled one of the authors to observe the implementation process of SAP R/3. This author was able to work within Utilcom as a contractor and was able to observe work processes as well as do the same training in ERP use as Utilcom employees. This period of study allowed the research team to more fully understand the power relationships and the underlying history of the SAP R/3 implementation. For example it was established through informal discussions with operational managers that SAP replaced a more operationally effective software package and that it was perceived by these managers that SAP was introduced to handle the financial aspects of the organisation rather than specific operationally based aspects. These managers felt that the previous software developed by MINCOM was superior to the newly implemented SAP R/3 system.



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