Management of knowledge in project environments

Knowledge is a vital resource in project-based industries such as aerospace, construction, shipbuilding and software. If managed effectively, knowledge can be used to reduce project time, improve quality and customer satisfaction. Considering this management of knowledge, be it explicit or tacit, is a necessary prerequisite for project success in today's dynamic and changing environment. However, the management of intellectual assets (physical, financial, human and intellectual) is a new and challenging process for project-based industries. With this in mind, this special issue sought to gain insights into the theoretical and practical aspects needed to manage knowledge in projects as well as identify emerging areas for research. The collection of papers in this special issue addresses various aspects of managing knowledge. This covers a social perspective as well as information and structural viewpoints to define how the management of knowledge is transpiring in different sectors that undertake projects.

In the first paper of this special issue, Bresnen et al. set out to examine the significance of social factors in enhancing knowledge management capabilities in the construction industry. Bresnen et al. reveal that processes of knowledge capture, transfer and learning in project settings rely very heavily upon social patterns, practices and processes in ways which emphasise the value and importance of adopting a community-based approach to managing knowledge. Bresnen et al.'s paper makes a contribution to the development of knowledge management theory in project environments, but does not provide any practical suggestions that project managers can use to ameliorate the creation, diffusion and management of knowledge.

Newell and Huang examine the dynamics of knowledge integration in the context of cross-functional project implementation within four large organizations. Their paper focuses on exploring and conceptualizing the efficiency, scope and flexibility of knowledge integration. Newell and Huang reveal that knowledge integration in the context of cross-functional project implementation is a process of engaging organizational members through the promotion of project benefits and the management of social networks. Newell and Huang further reveal that an organization's embedded practices, past integration experience and social capital play a key role in shaping the level of coordination that influences the efficiency and scope of integration. In particular, the development and nurturing of social capital within and beyond the project team is crucial, as is the promotion of project awareness through the creation of common knowledge.

According to Fernie et al. project managers in the construction industry increasingly seek to learn from other industrial sectors. Knowledge sharing between different contexts is thus viewed as an essential source of competitive advantage. Fernie et al. therefore suggest that it is important for project managers from all sectors to address and develop appropriate methods of knowledge sharing. However, too often it is assumed that knowledge freely exists and can be captured and shared between contexts. According to Fernie et al. this assumption is thwarted by the complexities and problems awaiting the unsuspecting knowledge-sharing protagonist. Knowledge per se is a problematic esoteric concept that does not lend itself easily to codification. Specifically tacit knowledge possessed by individuals, presents particular methodological issues for those considering harnessing its utility in return for competitive advantage. The notion that knowledge is also embedded in specific social contexts compounds this complexity. It is argued By Fernie et al. that knowledge is highly individualistic and concomitant with the various surrounding contexts within which it is shaped and enacted. Indeed, these contexts are also shaped as a consequence of knowledge adding further complexity to the problem domain. Current methods of knowledge capture, transfer and sharing fall short of addressing these problematic issues. The research presented by Fernie et al. seeks to addresses these problems and proposes an alternative method of knowledge sharing. Drawing on data and observations collected from its application, the findings clearly demonstrate the crucial role of re-contextualisation, social interaction and dialectic debate in understanding knowledge sharing. Like Bresnen et al. this paper theory laden yet it takes a step further by providing a bridge between ‘theory and practice’, which practitioners can drawn from to manage their projects more effectively.

Ramaprasad and Prakash present an approach that foreign project managers can use to elicit and integrate knowledge in local environments. The core components of Emergent Project Management, based on the concept of Emergent Design are presented and discussed. It is suggested by Ramaprasad and Prakash's that project managers who want to transcend state, regional, national, cultural, organizational and industry boundaries in today's global economy will need these new cognitive and behavioural skills.

For some time now, researchers and practitioners have been primarily concerned about the ‘collection’ of information and knowledge. With the emergence of web-based and intranet technologies ‘connectivity’ has enabled information and knowledge sharing to take place. In recent years, the term ‘knowledge management’ has been proposed, and numerous individuals and organizations have been trying to put more ‘science’ behind the ‘art’ of knowledge management. With this in mind, Liebowitz provides some useful frameworks to help project managers and others in conceptualizing and implementing knowledge management initiatives. This paper should provide the building blocks necessary to further understand and develop knowledge management initiatives.

The convergence between telecommunications and computing industries has enabled the provision of web-enabled software applications facilitates new opportunities for small and medium businesses (SMBs) to embrace application outsourcing projects. Application service providers (ASPs) offering web-enabled software applications on a subscription (pay-as-you-go) basis revisits the traditional service bureau model of outsourcing, and promises additional business benefits of economies of scale, increased scope of business applications, and enterprise application integration (EAI). Yet SMBs rarely adopt formal, project management methods and tools for evaluating the benefits and risks of outsourcing projects. Bearing this in mind, Curry has developed a knowledge-based risk assessment framework to provide SMBs with a template for evaluating the benefits and risks of application outsourcing.

In the final paper of the special issue, Schindler and Eppler present an overview of proven methods to record experiences from projects and discuss their use in project management. They distinguish between process-based and documentation-based debriefing methods. Process-based methods focus on a procedural approach to capture key learning attributes/experiences from a project. Documentation-based methods serve as appropriate representation formats or structures for project insights. Schindler and Eppler paper bridges the current gap between theoretical insights of learning in projects and managerial reality. The paper discusses central project debriefing problems such as the lacking willingness to learn from mistakes or the lacking discipline in the use of project management manuals. Schindler and Eppler conclude the paper by providing recommendations on how debriefing processes can be integrated successfully into project procedures.

The Guest Editors were overwhelmed by the number of papers submitted for possible publication in this special issue. Each paper was reviewed by at least three referees. The Guest Editors would like to express their gratitude to the 80 referees who reviewed papers for this special issue. In addition, the Guest Editors would like to acknowledge the assistance provided by Professor Rodney Turner, the Editor, of the International Journal of Project Management.

Framework for outsourcing manufacturing: strategic and operational implications

ABSTRACT

Over the last decade, outsourcing has proved to be a relevant strategic option for companies narrowing their operations to focus on core competencies. This paper analyses the process of outsourcing manufacturing to cost-efficient and innovative suppliers in support of internal resources and capabilities. A scientific reference model founded on manufacturing strategy is proposed to help choose the right level of analysis and steer the research process. From this, a system model is developed to enable identification of the production system elements and internal support functions. Finally, a framework that links the phases of the entire outsourcing process to strategic planning is synthesised. The framework includes a logical sequence of key activities with built-in performance measures and expected output for each of the phases. The research methodology combines theory study with case study and action research in Aalborg Industries, which operates in the heavy industry. Thereby, the research pursues both academic and industrial application.

Keywords: action research, case study, competencies, manufacturing strategy, open systems theory, outsourcing framework

1. Introduction

Entering the third millennium, most industrial sectors face intensified conditions both in th marketplace

and within the corporate boundaries. The customers are putting higher demands and constraints on their upstream linkages. Formerly, the customers focused mainly on low total systems cost, high quality and good delivery performance. Presently, they also expect short product life cycles and time-to-market, innovativeness and customisation [1]. The companies and their suppliers are experiencing the emergence of a global economy and rapidly changing markets. At the same time, the complexity of products and technologies is increasing and their functionalities are expanding [2]. Globalisation and technological innovation appear to be common denominators of these marketing and corporate business challenges. From a corporate strategy point of view, they add new competitors and markets and put strong pressure on companies’ competitiveness and profitability. From a combined business and functional strategy viewpoint, they call for improved organisational adaptability and more flexible and advanced systems relative to manufacturing, logistics, engineering, information and process technology and the like [3,4].

Table 1 specifies the wide range of trends in the industry and their implications. Besides, the table

includes examples of initiatives that may be taken to proactively meeting the trends and implications.

It is noticed that the trends, implications and initiatives are not fully consistent in the sense that certain interdependencies and overlaps exist in practice. Nevertheless, they represent the problem context of the paper.

As indicated in the table, globalisation and technological innovation present a particular paradox.

Technology facilitates the integration of business operations between separate companies while the

rapid market changes on a global scale increase the investment risk in new technology, because it might become obsolete within the payback period [5]. In the table, I take a step further by arguing that the rapid development of information and process technology may reduce the need for middle management based on the rationale that some operating procedures may be automated. This contributes to obtaining flexibility and cost savings, and links to the trend of downsizing. Lewin and Johnston [6] support this point stating that while downsizing initiatives were initially aiming merely at increasing profitability by reducing costs, they now also reflect the search for more flexibility (cf. automation). The advances of information and process technology, thus, largely prompt the gradual change within the corporate boundaries.

In consequence of the internal and external conditions given above, companies must be able to change their organisation, operations, product portfolios, customer segments, etc. rapidly and efficiently as well as on a continual basis. This may involve a new approach to the strategic planning process in which production and operations management and industrial marketing are seen as integral parts. There is evidence to suggest that the success of outsourcing depends largely on such inside-out perspective which assigns production strategic considerations the same importance as market strategic considerations [7–9]. Hence, the frequently used term ‘‘paradigm shift’’ is highly legitimate at present, not only for the industry, but also for the scientific problem addressed in this paper.