Gaining insight from practice: case studies

Over the past 8 months I have been working on five exploratory case studies. In each case, I investigated how they were using a business case in one investment. Mostly, these investment were of strategic importance for the company and enabled by IT. Examples include a product introduction in the market, an ERP investment and so on.

The diversity of experiences in these cases was astonishing. One company just used the business in the beginning to get an investment approval and off they were. The investment was no longer questioned based on the business case. Another company let an external company develop the business case on a high-level and the detailed version was only developed while the investment was already started. They preferred to use the business case more as an implementation vehicle than as an investment decision document. The decision to invest was already made by the board of directors.

Only one company had a proactive, well-defined, structured and rather mature approach towards business cases. It was a governance instrument for them and part of the entire life-cycle as suggested in literature by Al-Mudimigh et al. (2001). Yet even this case study revealed that developing and using a business case was much easier for a simpler and small investment with straightforward objectives and financial benefits, than for a strategic IT investment. Especially the definition of the benefits was a big hurdle in most of the case companies.

Food for thought I would say, because more companies will struggle with this problem. If they don’t answer it, it will feed the disappointment of benefit realisation afterwards. Hence, developing a good business case with realistic assumptions and well-defined benefit and cost calculations is essential.

Any comments?

 

Al-Mudimigh, A., Zairi, M. and Al-Mashari, M. (2001) , ERP software implementation: an integrative framework,

European Journal of Information Systems (2001) 10, 216–226.

Executing a qualitative literature study

Performing a sound literature study is a necessary, yet not an easy step in the PhD traject.It requires the researcher to investigate his or her initial topic and to get a clear understanding on the subject context. In my case, I have now performed my second literature study on business case research after completing the earlier one on it value management. The latter has been accepted at the HICSS conference in Hawaii last year and was an eye opener on methodology. During my paper presentation, I was lucky to receive a critical question of Prof. Dr. Jan Vom Brocke on my literature search process and the methodology I had employed. I answered his question: “No specific methodology, I just started using some e-databases such as EBSCO and ScienceDirect and entered my keywords ‘information technology’ and ‘value management’. In addition, I have used google scholar to find non-academic publication which could broaden my understanding of the it value management context.” As a result, he recommended me to read his ICIS paper on the execution of a literature study and the literature study process. Later that day, the paper was already in my inbox…

So, to execute the business case literature study, I was already aware of the methodology. I followed the process as described by Vom Brocke and are much more confident with regard to my results. It provides a lens on the business case concept and delivers many opportunities to develop a good conceptual model. To describe the literature study process and how a qualitative literature study can be achieved, I have taken an excerpt of my paper submission to the Conference on Information Systems and Technology (CIST) 2012.

“A comprehensive description of the literature study process is desirable according to Vom Brocke et
al. (2009), so readers can assess the study exhaustiveness and other scholars can more confidently
(re)use its findings. As suggested by Vom Brocke et. al. (2009), the literature study is discussed in
line with Cooper (1988) categorisation using six constituent characteristics consisting of (1) focus,
(2) goal, (3) perspective, (4) coverage, (5) organisation, and (6) audience.”

(1) Focus: the management practice and application of business cases. Yet, any paper is included that focuses on a specific research outcome, method or theory and that deals with a business case only in passing.

(2) Goal: to understand, accumulate and integrate knowledge on business case research and to develop a taxonomy that portrays the key business case dimensions. Moreover, literature gaps will be identified stimulating further investigation of an interesting and divers study field.

(3) Perspective: neutral, in an attempt to produce an objective representation of the research thus far;

(4) Coverage: an exhaustive search in multiple e-databases (EBSCO, JSTOR, ScienceDirect, Swetwise, WILEY) between 1990 and 2011 for academic and practitioner publications from top IS, management and finance journals:

* IS journals
– Decision Support Systems
– European Journal of Information Systems
– Information and Management
– Information Systems Journal
– Information Systems Research
– Journal of Management Information Systems
– Journal of Strategic Information Systems
– Journal of the AIS
– MIS Quarterly
* Management journals
– Academy of Management Journal
– Academy of Management Review
– Administrative Science Quarterly
– Decision Sciences
– Management Science
* Finance journals
– Journal of Banking & Finance
– Journal of Corporate Finance
– Journal of Finance
– Journal of Financial Economics
– The Review of Financial Studies
* Practitioner journals
– California Management Review
– Communications of the ACM
– Harvard Business Review
– MIS Quarterly Executive
– MIT Sloan Management Review

(5) Organisation: literature study is organised through a taxonomy of business case dimensions as found in the literature data analysis: application area, content, process, goals, stakeholders and risk factors.

(6) Audience: beneficial to both academics for an innovative and clearly structured overview of business case research and for further research opportunities, and practitioners to understand the importance and
diversity of a business case in current and future investments.

In my opinion, there are only a few options as a PhD student. On the one hand, you can perform a trial and error approach like I have done with executing a literature study. The first time you execute such a study, you try to find some articles on literature studies and ‘copy-paste’ their methodology. In addition, you can search for publication via google scholar and rely on your gut feeling to describe the keywords and to select the right e-sources. On the other hand, a PhD student can be lucky to have a methodologically educated supervisor who can guide you with nice references on how to execute a sound literature study. Unfortunately, only few PhD students have the luck of the second option.

Therefore, I wish to propose a third option to the universities and the doctoral schools. One cannot expect a supervisor to be a specialist in everything, not in methodology and in qualitative research and in quantitative research and a good writer and so on. We cannot expect them to be superman or superwoman. As a PhD student relies on the skills of a supervisor, his options on doing research are limited as well. For instance, a quantitative oriented supervisor will not advise a PhD student to perform a comparative case study analysis building on the grounded theory approach.

Hence, I would suggest to install networks of experts. A university or doctoral school builds a network of academic and/or practitioner experts who are able and open to share their knowledge and experience with PhD students and other people of the network. The university or doctoral school lists all skills and specialties of the experts which can be easily consulted. This way, PhD students can easily contact a certain expert to get to know his field of study and to consider it as a useful methodology in his or her own work. PhD students will still be in contact with their own supervisor who can overlook the whole as a PhD project, but does not need to be a specialist in everything. Specific knowledge can be gained through the network of experts which opens many opportunities for joint research across (sometimes politically sensitive) departments. To me, this seems to be a win-win-win-win-win-win-win-win…

The latter is just an initial idea that should be further concretised in the coming months, but feel free to comment on it and to suggest other opportunities which are not yet covered.

A period of silence is near its end, hopefully…

Since my last post more than one year ago, I have had many doubts about my research, my topic it value management and in which direction I would continue. These doubts have led to a period of uncertainty about my research. IT value management has been recognised as a broad topic, too broad for a PhD project of 4 years. I still remember one quote from a Dutch professor saying “you should not start building a wall, start with the first brick during your PhD and leave the wall for someone else.” This is actually what I have been doing during the past year. I have spoken with a few colleagues and tried to figure out what could be of interest to the academic world, the practitioners world and to myself.

As a result, the IT value management topic has been narrowed down to a more concrete subject. Several sources have led to the subject which I have chosen in December. First, a small literature search delivered very few quality papers meaning that the subject is still in its infancy in the academic world. Second, practitioners have many troubles executing the new subject and do not implement it as a whole. Last, the Atlas Copco case study revealed the same results indicating that practitioners do not walk the talk. The subject which seemed to be interesting was the business case and more specifically the business case process. Hence, business case research it was going to be.

To start the research in a new domain, one should understand the research context. So I started with a thorough literature study in January. Building on the experience I had gained during my first literature review on IT value management and on the comments I received during the HICSS conference last year, I was able to execute the literature study more accurately and well-founded. Looking back I can tell that one should always perform the same step in his or her research at least twice. The first time you can execute the research rather intuitively with a few methodological references to start from. By presenting this research a first time, you will get useful and informative questions and guidance from your peers which enables you to perform the same research step much better the second time. Once you have done this, you will experience that research because more interesting and more fun. You make progress in what you’re doing and you feel more confident about your results. In my case, I am much more confident about my results of my second review because I have limited my focus and research area. Now I can argue that within the research setting that I have investigated, I now I have covered everything. Business case research has little secrets left for me in the top 9 IT journals, top 5 management journals, top 5 finance journals and the top 5 management and IT practitioner journals.

In the next post, I will tell more about the literature study on business case literature. By the way, wikipedia’s page on a business case is still underdeveloped. Maybe I can provide some help after I get the literature study published on a conference. http://en.wikipedia.org/wiki/Business_case

A changing resource base requires a dynamic capability

This week, a fellow researcher at the Antwerp Management School started talking about dynamic capabilities during lunch while he was explaining his preliminary PhD research topic. According to him, the dynamic capability ‘theory’ was built upon the resource based view (RBV) and gave an answer to some of the limitations the RBV contains. Interesting enough to ask him several articles and publish some findings on the first I read. The prominent aspect it tries to solve is that the RBV does not specifically address how future valuable resources can be created nor it expresses how the current resource base (valuable, rare, imperfectly imitable, imperfectly substitutable) can be refreshed in changing environments: this is the concern of the dynamic capability perspective, according to Ambrosini and Bowman (2009).

This very interesting article offers a clear and comprehensive overview of what dynamic capabilities are. First of all, dynamic capabilities can be positioned within a three level hierarchy. First, zero-level or operating capabilities comprise the ability to perform the basic functional activities within an organisation. Next, dynamic capabilities modify and act upon the zero-level capabilities to perform dynamic improvements in the organisation’s resource base. Last, so-called meta-capabilities or learning-to-learn capabilities enable the organisation to renew dynamic capabilities. It is a capability that creates new dynamic capabilities which in turn shift the resource base to achieve a competitive advantage.

In the words of the original contributor Teece (1997), a dynamic capability is “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments”. In essence, dynamic capabilities are organisational processes to change the firm’s resource base. The adjective ‘dynamic’ is focused on the changing characteristics and renewal of the resource base and not to the dynamic environment nor it is directly related to the capabilities themselves. Such dynamic capabilities are built over time through learning and experience. In addition, these are embedded within the organisation and path dependend. So, dynamic capabilities will not be created spontaneously nor they come by luck. Last, a dynamic capability is concerned with strategic change but cannot be considered as strategic change itself. (Ambrosini and Bowman, 2009)

In total, four organisational processes can be distinguished which are utulised by the dynamic capability (reconfiguration, leveraging, learning and creative integration).  Reconfiguration refers to the transformation and recombination of assets and resources, e.g. the consolidation of central support functions that often occurs as a result of an acquisition. Leveraging involves replicating a process or system that is operating in one business unit into another, or extending a resource by deploying it into a new domain, for instance by applying an existing brand to a new set of products. Learning allows tasks to be performed more effectively and efficiently as an outcome of experimentation, reflecting on failure and success. Finally, creative integration relates to the ability of the firm to integrate its assets and resources, resulting in a new resource configuration. (Ambrosini and Bowman, 2009)

The ultimate objective of a dynamic capability is to support the organisation’s pace of renewal and as such to increase the organisation’s competitiveness. However, a sustained competitive advantage is not always attained. Ambrosini and Bowman (2009) specify four possible outcomes resulting from dynamic capabilities. A change in the organisational resource base because of a dynamic capability can deliver a sustainable competitive advantage, a temporary advantage over competitors, only a competitive parity or it may even result in a failure and deliver a negative outcome. The outcome depends on external as well as internal factors, as depicted in the figure below.

After having read this interesting article, I am figuring out a way how this can impact my IT value management capability. Is this an operating capability or more a dynamic capability? Where should I position this capability within the organisation? Which resources does the IT value management capability impact? Are the external and internal factors impacting the dynamic capability the same or true for the IT value management capability? Many questions which I would like to address in my next posts.

Feel free to react and provide useful insights!

Too broad, change the route

Changing your plans is never easy, especially when you’re convinced about something for almost a half year. (Un)fortunately this happens if one compares his or her thinking with other opinions. However, changing could also imply new opportunities and a chance for a new direction, perhaps a better direction.

Within the ERIM course and one week later in Amsterdam at the BENAIS PhD symposium IDEAS BAZAAR, my PhD proposal was challenged in a constructive way meaning these people were trying to help me with getting a better and more concise PhD research direction. The current research is going to be too broad to investigate within a four year period and impossible to investigate a (causal) relationship between the independent variables and the dependent variable (organisational performance). Of course, because organisational performance is impacted by almost everything, from organisational resources over a culture and the firm’s environment to an economic crisis for instance. All these contingent factors and many more cannot be controlled during the investigation making it very hard to find or prove such a causality.

Therefore, I will have to focus on a more concise topic within the IT value management capability. Such a change is neither bad nor wrong, because Galliers et. al. (2007 ) and Jarvenpaa (1988) specify a good approach in information systems research including case study research as a first exploratory step. Hence, my improved research will take the following steps:

  1. case study research to explore the study field
  2. develop a relevant research question out of the case studies
  3. theory building to investigate the research question
  4. theory testing through both qualitative and quantitative methods
  5. theory extension

Fortunately, this approach is ideally to build further on my current case study research at Atlas Copco and other organisations. Through this, I have a broad framework to structure my next steps and to guide the improved research within IT value management. Starting from this point, a more concise research topic and question will be distilled. Taking into account that the research topic should be both relevant for the academic world and for practitioners, this research topic will be developed from the case study findings which makes it immediately relevant for practitioners. The latter is one of the main criteria for my IWT grant and it was a basic argument for me to start this PhD journey in the first place!

Initial definitions on IT value management processes and relational mechanisms

As promised, this post will bring the next definitions on it value management practices. Concretely, I have defined eight definitions of it value management processes and six definitions of it value management relational mechanisms, which you can find hereafter.

For it value management processes:

  • Portfolio Management
    Portfolio Management is a continuous process supporting the investment decision board to manage a portfolio of assets that optimise the value creation from a portfolio of IT enabled investment programmes and projects. Therefore, it facilitates the business case process, prioritises these in terms of strategic fit, value opportunity and risk appetite, manages resources, benefits and risks during the initiation, execution, delivery and closing of investment programmes, guards interdependencies and overlap between investments, terminates programmes when necessary, and measures and monitors the overall portfolio performance to report on progress.
  • Programme Management
    Programme Management is a continuous process supporting the investment management team to manage related business and IT projects integrated into an IT enabled investment programme and assure value creation across projects that could not be realised when managed independently. Between the start and closing of a programme, individual projects should be initiated, prioritised (in terms of strategic fit, value opportunity and risk appetite), managed and closed within the programme planning and programme objectives. This involves various sub processes including the management of scope, benefits, coordination, stakeholders, risks, time, interdependencies, lessons learned, issues and overall quality on which should be reported regularly.
  • Project Management
    Project Management is a continuous process supporting the investment management team to manage the overall success of a business or IT project in support of an IT enabled investment programme. Within the broader context of an investment programme, the project strategy is executed through a formal project life-cycle (idea generation, pre-feasibility, feasibility, development and execution, commissioning, launch and post-implementation review). This involves various sub processes including the management of scope, benefits, coordination, stakeholders, risks, time, lessons learned, issues and overall quality on which should be reported regularly.
  • Benefits Management
    Benefits management is a continuous process that facilitates the identification, measurement and (pro)active management of both intermediate and business benefits over the entire life-cycle of an IT enabled investment programme and project. After identification, benefits should be structured within a benefits realisation plan that will be evaluated on benefits delivery performance and the establishment of future benefit opportunities.
  • Business Case Management
    Business Case Management is a continuous process that guides the business sponsor to formally structure an initial investment opportunity in terms of purpose, objectives, strategic fit, approach, scope, benefits, costs, risks, planning, requirements and organisational impact, that offers the investment decision board a standardised business case to select and prioritise effectively, and that induces the programme management team in the active management of the business case during the entire programme life-cycle.
  • Knowledge Management
    Knowledge Management is a continuous process that supports the creation, sharing and utilisation of knowledge acquired through the organisation of IT enabled investments.
  • Stakeholder Management
    Stakeholder Management is a continuous process to manage and align objectives, values and expectations between different internal (and external) stakeholders on the basis of dialogue-based empowered relationships.
  • Role Management
    Role Management recommends clear role descriptions among internal (and external) business and IT people throughout the enterprise which are involved in the organisation of IT enabled investments. The process should lead to a clear understanding of who is responsible, accountable, consulted and informed according to the activities one performs.

For it value management relational mechanisms:

  • Value Culture
    Value Culture is an organisational capacity that refers to a shared set of beliefs, values, norms, understandings and expectations oriented towards the optimal organisation of IT enabled investments so business value creation can be maximised. A cultural shift implying a new open mindset towards change and business transformation requires various skills including a clear vision and strategy, organisational commitment and leadership, personal development and a strong community to rely on.
  • Organisational Leadership
    Organisational Leadership represents an individual competence exercised by business and IT people to be constantly aware of and open to new ideas, to be on the lookout for new opportunities that drive forward the organisation’s business objectives, and to take action in close partnership. This capability builds on cooperative and interpersonal relationships outside of the traditional hierarchical structures.
  • Organisational Commitment
    Organisational Commitment constitutes the confidence and engagement shared by the board of directors, top management and all other organisational members to be fully committed in the value driven goal of the organisation and its IT enabled investments. This collective behaviour shapes a conducive environment that guarantees sufficient resources and dedicated attention is addressed towards the full life-cycle of an IT enabled investment, and that transformation is understood and accepted by the entire organisation.
  • Build a Community
    Build a Community prescribes that organisational responsibles and decision makers should develop well-established cooperative working relationships with internal (and external) stakeholders based on trust and mutual respect to improve their understanding on the capabilities and opportunities enabled by IT and get constructive buy-in once decisions should be taken during an IT enabled investment.
  • Clear Communication
    Clear Communication is a responsibility of each business and IT decision-maker as well as for every individual internal (and external) stakeholder in order to inform employees on vision, mission and strategic direction, to exchange and agree upon unambiguous goals and objectives, to manage expectations, to assemble insights and potential issues, to promote the investment organisation, to update on investment progress and to increase collaboration.
  • Personal Development
    Personal Development comprises recruitment, training, and expertise building of business and IT personnel to ensure that adequate and quality technical, business, personal and managerial skills are available. Life-long organisational learning focuses on the development and exchange of tacit and explicit knowledge regarding general and firm-specific information.

Initial definitions on IT value management structures

When I submitted my first conference paper for HICSS last year, I got a remark from a reviewer that the management practices listed in the paper should be defined opposed to the discussion I provided. Therefore, I have read some new literature and added this to the HICSS literature review to come with clear definitions of every management practice included in the IT value management capability. In this post, I’ll start with the definitions of structures. I want to share these definitions with you and look forward to any comments as these definitions are still preliminary.

  • IT Strategy Committee
    The IT Strategy Committee, composed of board and non-board members, is positioned within the IT organisation and responsible to stimulate awareness amongst the board of directors on the potential value and viability of proven and emerging technologies, the measurement and delivery of business value out of IT enabled investments, the sourcing and use of resources and the management of risks. To carry out this responsibility, the committee should provide optimal resources to the management in relation to the organisational risk appetite, to assess the activities of the investment decision board, to receive updates on both individual as the portfolio of investment programmes and to verify whether the enterprise architecture is flexibly designed to drive maximum business value.
  • Investment Decision Board
    The Investment Decision Board is a business decision making body made up of business and IT executives that are accountable to the executive management committee for the enterprise value delivery across a portfolio of IT enabled investment programmes. Therefore, the board stimulates the ideation process and assesses the business case (based on benefits, costs, risks, time and requirements) and strategic fit of investment programmes. After prioritisation, the winners are selected, a business sponsor is assigned and effective programme preparation, implementation and delivery is facilitated through adequate resource management. Value measures should be defined to reassess the business case on a regular basis as well as after programme delivery. In general, the board is responsible to stimulate top management engagement and effective IT leadership which in turn improves the visibility of investment programmes.
  • Value Management Office
    The Value Management Office is a business secretariat with experts that are assigned to evangelise on a new of thinking about value and to facilitate the implementation of this value culture. To this end, the office assists business sponsors with best practices in the identification and design of a business case and IT enabled investment programme, supports  the investment decision board in the evaluation of such business cases, and tracks both the individual investment programmes as well as the overall portfolio together with value analysts to act upon value opportunities.
  • Investment Management Office
    The Investment Management Office is a business secretariat composed of experts that provide a combination of managerial, administrative, training, consulting and technical services to support the initiation, execution and delivery of IT enabled investment programmes and projects within an overall investment portfolio. Therefore, the office provides effective methodologies, standards and tools, helps with the set up of programme and project structures and processes, documents and assures meeting minutes and lessons learned, and facilitates training and development.
  • Investment Management Steering Committee
    The Investment Management Steering Committee is a business decision making body on programme or project level made up of internal (and external) business and IT stakeholders that are assigned to follow up, review and approve the activities undertaken by the investment management team. Next to its budget responsibility, the committee should approve the strategy, scope, resources and planning.
  • Investment Management Team
    The Investment Management Team constitutes the group of internal (and external) business and IT stakeholders that are concerned with the day-to-day organisation of an IT enabled investment programme or project. Through the full economic life-cycle, their responsibility involves the management of scope, benefits, coordination, stakeholders, risks, time, lessons learned, issues and overall quality on which should be reported regularly.
  • Business Sponsor
    The Business Sponsor acts as the highest accountable individual for the overall success of an IT enabled investment programme. It is the business sponsor’s responsibility to develop an initial investment proposal that meets the overall business objectives followed by a detailed business case to understand the full life-cycle value (based on benefits, costs, risks, time and requirements), to monitor and report on the programme’s progress and to administer the programme budget.

Please, give any comments or remarks whether the definitions are (in)complete, useful, to-the-point…