Public private partnership contract management failure in information technology service delivery: a qualitative inquiry into the South African Department of Labour ERP implementation project

This PhD research project investigated the failure of a Public Private Partnership (PPP) ICT service delivery project between the South African Department of Labour (DOL) and Siemens Information Services (SIS). The research investigated conditions contributing to management failure of the Enterprise Resource Planning (ERP) Implementation project, which had the objective of improving the Department of Labour's service operations and the transfer of ERP technology competence to the DOL. An important objective of this research was to develop an understanding of the special challenges of PPP management in the context of emerging and developing countries. International organizations such as the IMF, World Bank and United Nations (UN) have been encouraging emerging and developing countries to adopt PPPs as vehicles for developing technology competence and improving public sector efficiency. However, little research has been conducted to discover whether these countries have the competencies to successfully implement and manage PPPs. The goal of this PhD study was to develop an understanding of factors and conditions influencing the DOL-SIS PPP failure in order to develop theory and approaches, which could help improve management practices in the area of contracting-out ICT service delivery in the public sector of the Republic of South Africa. The research was guided by an agency theory framework and utilised a multi-method approach to conduct three empirical investigations into the PPP institutional framework, project governance and public accountability aspects of the DOL-SIS project. Some important findings of this research are: (1) Robust institutional policies and governance mechanisms specific to PPPs for ICT service delivery are necessary but not sufficient to combat risks of failure; robust mechanisms for performance monitoring and penalties for shirking are also necessary. (2) Public sector managers need specialised knowledge and competence to effectively manage private partners in the execution of ICT PPP contracts; over dependence on the private partners can significantly increase the risk of project failure, and encourage opportunistic behaviour and shirking by the private partner. (3) Transparent project governance and public accountability mechanisms are necessary to maintaining public support and combating opportunistic behaviour of both private and public partners on a PPP ICT services project. The thesis comprises three empirical studies: Study 1 used an agency theory framework to interrogate the PPP institutional framework to understand its provisions for identifying and managing risk factors in ICT service delivery projects. Study 2 analysed data from interviews with stakeholders, the contract meeting minutes and other relevant documents, guided by the agency theory framework to develop an understanding of project governance challenges. Study 3 focused on identifying public accountability issues and used a critical discourse analysis methodology to interrogate the media discourse concerning the failure of the DOL-SIS ERP Implementation failure. Content analysis with the use of ATLAS/TI and automated tool was used to analyse all the relevant documents for the different studies. The general contribution of this PhD research is an explanatory theory illustrating how interactions among institutional conditions, governance mechanisms, knowledge and management competence deficits, and the behaviour of the PPP actors reinforced dysfunctional organisational conditions, which resulted in project failure. The theory is illustrated using a causal loop modelling technique and a set of five theoretical propositions clarifying the organizational knowledge and competence challenges, which the public sector managers faced, and the consequences of these affecting the success of the PPP project. This is an important contribution to literature on the use of PPPs for ICT service delivery not only in emerging and developing country contexts, but in developed contexts as well. Other contributions specific to the South African perspective are: (1) Study 1 revealed gaps in the institutional framework concerning the management of risks in ICT PPP projects. While South Africa has much experience with managing risks in the engineering and delivery of physical infrastructure, there is a comparable lack experience with managing ICT infrastructure implementation project risks. (2) Studies 1 and 2 reveal gaps in the governance and accountability mechanisms and practices which can be exploited with adverse consequences to the public interest. These studies also point to the importance of robust transparency and governance mechanisms, and high levels of management competence to the effective risk management of PPPs for ICT service delivery. (3) Study 3 reveals importance of the independent media in fostering debate, uncovering evidence, scrutinizing the activities of the actors in the DOL-SIS PPP and defending the public interest. The independent media played a critical role of agitating for public accountability when the DOL was reluctant to do so, and raising issues about SIS underperformance and pushing for public investigation into the governance of the DOL-SIS ERP Implementation project

Investigating the impact of institutional forces on the operations of an organisation-implemented ERP system in a developing country

In response to the pressure of the ever-changing and dynamic global market, enterprise resource planning (ERP) systems have become the cornerstone for organisations of all sizes to compete internationally. However, implementing organisations in developing countries doesn't enjoy the same benefits as implementing organisations from developed countries, because ERP systems general originate from developed countries and these do not necessarily fit the requirements of implementing organisations in developing countries owing to the different business practices, legal and government regulations. ERP systems are built on institutional models, procedures and forces that set the rules of rationale and these forces serve to bind implementing organisations to fundamental choices about how organisational operations and processes should be organised. Limited studies have been done on the impact of institutional forces on implementing organisations from developing countries, particularly in South Africa, yet these organisations continue to invest huge amounts of their financial resources in ERP systems. Until implementing organisations understand the impact of institutional forces on their operations, misalignment will continue to deny realisation of the full benefits of these systems. This study aimed at exploring the institutional forces and their impact on the operations of the implementing organisation within the South African context. A qualitative research approach was undertaken from an interpretive epistemological position. A single case study was conducted at Organisation X. Organisation X is a public sector organisation formed in 1999 and implemented an ERP system in 2006. Thirty employees participated in the study and the data were analysed using the thematic analysis qualitative technique. The selected participants only include those who joined the Organisation X before the implementation of the ERP system because they have a broad general knowledge of the ERP and have undergone the experience during this time. These include executive managers, senior managers and support staff. Major themes from the data illustrate that implementing organisations from the public sector resort to modifying the ERP because they operate in highly regulated environments. These themes also demonstrate that economic differences, sector requirements, organisational culture, IT infrastructure and operational differences are the institutional forces that affect the implementation and use of software packages. The findings reveal that ERP-embedded institutional forces have a negative impact on the implementing organisational structures, bring changes to the process controls and procedures of the implementing organisation, affect the reporting structure of the organisation, create additional roles and responsibilities, bring undesirable changes to organisational culture and increase organisational spending in IT infrastructure. Institutional forces also have positive impact on implementing organisation operations, including improved availability, accessibility, accuracy and reliability of the information and, lastly, thus improve the effectiveness and efficiency of operations. The findings of this study help to build a body of knowledge on ERP misalignment for organisations planning to implement or adopt ERP systems. This study alerts implementing organisations of the need to systemically review regulations and national rules together with industry best practices prior to deployment

Master Data Management in Global Enterprise

The need of qualitative data is becoming of primary importance for enterprises and there are different approaches, leading toward the increased importance to manage the core business data referred as Master Data Management. This concept if not new, there are different studies and different software solutions that address master data. However, the concept can be applied differently in organizations. In a geographically spread company the complexity increases due to the nature of operation. The aim of this study is to capture the real life factors influencing Master Data Management (MDM). More specifically, this research focuses on providing additional insight on the main factors from the three internal working domains, namely Business, Finance and Informtion Technology (IT). Subsequent to this, observations were made from the two main angles of a global financial organization which are Global and Local (country-level). A global enterprise is influenced by 11 main factors regarding MDM such as data quality, culture, projects, definitions, etc. Taking a deeper look into these factors we created three main classes of influence, Data Properties, MDM Influencing Factors, and Sociological Factors. These congregations have their own relations with each other and they have not the same impact on corporate and country level

IT Governance in SMEs : a theoretical framework based on the outsourced information systems failure

IT Governance in Small and Medium-sized Enterprises (SME) is both controversial and paradoxal. When it comes to IT, SMEs tend to have an idiographic profile with characteristics that differs strongly from larger companies. Although the majorities of organisations comply with the sizing standard of an SME (less than 250 employees) we focus here on family-owned SMEs. In these companies the concept of IT Governance is very elusive if present at all. SMEs tend to be slow adopters of IT but they do invest in strategic IS and face the challenges of adopting IT. However, SMEs depend strongly on external IT expertise for implementing an IS. On the other hand one can observe the vast amount of failed outsourced IS projects in SMEs. In this work we design a theoretical framework to explain the setting of an SME conducting an outsourced IS project that leads to an outsourced IS failure (OISF). A multiple case study methodology is used to build up the framework. The scene is dominated by two actors: a relatively well informed agent and a less informed SME-principal meeting each other on a typical market. This situation of information asymmetry gives rise to well known problems already predicted by agency theory: moral hazard and adverse selection. However other observable phenomenon's like trust deterioration, misunderstood scope and underfunding of budget can be better explained and/or predicted by other theories. To enlarge the explanatory and predicting power of our framework we draw from four additional theories: Lemon Market Theory (LMT), Prospect Theory (PT), Incomplete Contract Theory (ICT), and Organisational Trust Theory (OTT). The use of different theoretical constructs matches better with the different ways actors deal with the circumstantial settings found in the empirical cases. We conclude that the framework yields a strong internal validity and enlarges our insight to the level of IT Governance in SMEs based on the sole but rich observation of OISFs. We suggest further empirical research based on the framework to extend the external validity of our framework

The complementary use of IS technologies to support flexibility and integration needs in budgeting

In business controllers’ work on budgeting, considered as a classic decision-making process in organisations, it is consistently indicated that enterprise resource planning (ERP) systems, business intelligence (BI) and spreadsheets are commonly applied to assist the process. An academic research contribution on this topic is few. Most available research concentrates on ERP systems but it mentions neither BI nor spreadsheets. A further review of budgeting literature designates that budgeting characterises both flexibility and integration needs to accomplish decision-making. Given the limited understanding as to how IS technologies are used in budgeting, this dissertation aims to describe and explain how business controllers can complementarily use IS technologies to support the flexibility and integration needs in a budgeting process. Two research questions addressed are: RQ1- how do business controllers perceive IS technologies in relation to the need for both flexibility and integration in budgeting? And RQ2 - why do business controllers use IS technologies to support the need for both flexibility and integration in budgeting? The analysis employs conceptual ideas pertaining to structuration theory. Empirical data was collected through interviews, observations and documentations with twenty-six business controllers in sixteen companies in Thailand. It is concluded that business controllers perceive IS technologies to enable and constrain their flexibility and integration needs in budgeting. Spreadsheets are the main IS technology used in budgeting despite an existent of ERP systems and BI because of the flexibility that spreadsheets offer. Business controllers use spreadsheets to support both the flexibility and integration domains but they use ERP systems and BI to support the integration function alone. It is necessary for business controllers to rethink their IS technology use practice because spreadsheets cause errors and frauds. The insights generated create a framework to describe how the three IS technologies should be complementarily used to support specific budgeting activities in respect of the flexibility and integration needs

Semantic discovery and reuse of business process patterns

Patterns currently play an important role in modern information systems (IS) development and their use has mainly been restricted to the design and implementation phases of the development lifecycle. Given the increasing significance of business modelling in IS development, patterns have the potential of providing a viable solution for promoting reusability of recurrent generalized models in the very early stages of development. As a statement of research-in-progress this paper focuses on business process patterns and proposes an initial methodological framework for the discovery and reuse of business process patterns within the IS development lifecycle. The framework borrows ideas from the domain engineering literature and proposes the use of semantics to drive both the discovery of patterns as well as their reuse

The secret life of ERP: from technical tool, instrument of control, to transformative agent

In the Information Systems (IS) discipline there has been a continued interest in understanding how IT or IS development, implementation and use draw from and impact on social and power relations and the distribution of power in various contexts. This thesis aims to understand the role that the implementation and use of an enterprise system such as ERP can play in the (re)configuration, (re)construction and exercise of power in organisational contexts. To achieve the aim, the thesis i) draws from extensive literature related to IS (and specifically ERP) and power, ii) develops a Foucauldian theoretical foundation to study ERP and power in organisational contexts and iii) examines a case of an ERP implementation and use in a State Owned Enterprise (SOE) in China as part of an ongoing modernization program. The thesis answers the following empirical research questions: 1. How are various forms of exercise of power and control enacted through the ERP system implementation and use in business processes and practices? 2. How do these enactments reconfigure power relations and reconstitute the regime of truth? 3. What is the role of the ERP system in such a process of power (re)construction? The case study demonstrates how the ERP implementation aimed at rationalizing business processes led to largely covert attempts at increasing surveillance, standardization, disciplining, and subjugation. These attempts are met with counteraction in various forms through a ‘care of the self’, including overt resistance, e.g. openly challenging and arguing, non-participation, and covert resistance, e.g. distancing, persistence, creating workarounds. The analysis reveals the outcomes of the ERP implementation do not only result from the perception of technological (mis)fit or the interpretation by powerful groups but more importantly spring from mutual constitution of the ERP system and the human actors leading to reconfiguration of power relations. This is explained by proposing a concept of power-technology nexus as an instance of the broader notion of power/knowledge discussed by Foucault. The emergence of power-technology nexus indicates that the more ERP enabled processes get enacted, the more ERP becomes integral to the circulation and exercise of power, and the more the ERP system becomes a material embodiment of the power/knowledge nexus, thus a transformative agent. These empirical and theoretical results contribute not only to better understanding of the mutual reconstruction of power and technology, but also provide a theoretical foundation for a more critical view of the wider societal and political consequences of technology that can help inform both research and practice

Aligning Key Success Factors to ERP Implementation Strategy: Learning from a Case Study

CAHIER DE RECHERCHE n°2012-08 E5These last years, we can observe that most of companies implemented an ERP system but many of them fail. Much of research that has been conducted in this field, focus on KSFs. We have noticed that confronting those KSFs to ERP implementation strategies seems quiet fecund. So provide in this article a brief overview of the literature dealing with key success factors related to an ERP implementation project to better cope with the field, then come out with a framework analyzing these KSFs depending on implementation strategies. Then we study a case of an ERP implementation project in a company operating in the automotive industry, with a quail-metric methodology, to better understand the reasons of ERP implementation projects success or failure

Aligning Key Success Factors to ERP Implementation Strategy: Learning from a Case Study

CAHIER DE RECHERCHE n°2012-08 E5These last years, we can observe that most of companies implemented an ERP system but many of them fail. Much of research that has been conducted in this field, focus on KSFs. We have noticed that confronting those KSFs to ERP implementation strategies seems quiet fecund. So provide in this article a brief overview of the literature dealing with key success factors related to an ERP implementation project to better cope with the field, then come out with a framework analyzing these KSFs depending on implementation strategies. Then we study a case of an ERP implementation project in a company operating in the automotive industry, with a quail-metric methodology, to better understand the reasons of ERP implementation projects success or failure

Counterparty credit risk management in industrial corporates

Ever since the financial crisis of the banking system of 2008 - 2010 the paradigm that deposits or other exposures towards major banks are safe has been fundamentally questioned. This put industrial corporates, who to support their business usually need to manage significant cash holdings or incur counterparty credit risk via derivatives, in the situation to develop or extend their resources for counterparty credit risk management. This paper provides a comprehensive overview over the practical issues into the subject benefitting largely from the findings of an interview series conducted with the respective heads of counterparty and customer credit risk management in the time period April - September 2011 of 25 large european enterprises with a large subset being members of the German DAX Index.Financial Risk Management; Credit Risk; Counterparty Credit Risk; CCR Management; Organisation; Financial Controlling; Financial Institutions; Banks