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A M ethodology to Evaluate the Organizational Impact of IT on Know ledge M anagementtheir integration (Ahn and Chang, 2004; Hansen et al., 1999; Liebowitz et al., 2000; March,1991).For many organizations, knowledge has become a strategic resource. Organizations shoulddevelop their capacity to generate, store, share and apply knowledge (Nonaka and Takeuchi,1995; Tiwana, 2000; Zack, 1999). According to Penrose (1959), a company should develop anduse both knowledge resources and knowledge competences in such a way as to improve itsperformance. Indeed, according the resource-based view, once the acquired knowledge assets areconsidered as key success factors, they should be included in the business organizational context,by properly applying human and knowledge resources to technologies and organizationalprocesses in an integrated way so as to improve performance (Zack, 1999; Von Krogh et al,2000). However, theories of dynamic capabilities and the knowledge-based view theories extendthe resource-based view by asserting that the competitive advantage should be reached by thedevelopment and reconfiguration of knowledge assets and by their dynamic combination andintegration with the other available assets (Freiling, 2004; Teece et al., 1997).Knowledge Management (KM) concerns the development and use of intangible knowledgeresources in an effective way so as to improve a firm's performance. KM initiatives should bedirected towards the achievement of strategic goals of the company by means of the definition ofa program supporting companies in introducing the appropriate infrastructure. A strong effort inbuilding the technological infrastructure for the diffusion of knowledge and for the coordinationof business processes is of primary importance (Davidow and Malone, 1992). Thus InformationTechnology (IT) could represent the main knowledge transmission vehicle within the firm. Therole of IT is not only to organize data into useful information, but also to support thetransformation of individual information into organizational and shared information (Adamides etal, 2006).Several KM tools and techniques support the performance of organizational activities andfacilitate the implementation of knowledge processes (Tyndale, 2002). But, even if IT is the keyenabler of the implementation of KM processes and the primary support of a KM system (Reyeset al., 2002; Wensley, 2000), it does not guarantee the efficiency and the efficacy of businessprocesses (Davenport and Prusak, 1998; Hansen et al, 1999). IT investments and implementationare important aspects in a firm. They should be carefully justified, measured, controlled andevaluated because of the unpredictability related to some of their characteristics, such as highrisks, long-term returns, tangible and intangible benefits, and user resistance to change (Milis andMercken, 2004). Moreover, it is important for a firm to evaluate the benefits of such investment,since, even though an organization invests a great deal of IT resources, it is questionable whetherthe expected benefits can be reached (Huang et al, 2006).A methodological approach was developed to evaluate the organizational impact of IT on KMfrom a Business Process Management (BPM) perspective. This methodology is the result of jointresearch carried out by the authors and Exeura, an Italian company founded in 2002 specializingin KM process consulting. Exeura's business aim is to act as a link between academic researchand industrial production in the IT field. Exeura has a project-based organization. Until 2004, itexecuted its own projects on the basis of a total quality management system called ExeuraJITCAR, Volume 10, Num ber 2 9


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A Methodology to Evaluate the Organizational Impact of IT on Know ledge M anagementEnterprise M anagement System (EEM S). The purpose of EEMS was to clarify and formalize thestrategic and operational processes of the business so as to control and evaluate them in a simpleway. In 2004, Exeura managers determined that EEMS no longer supported the aim of the firm,since it had no capability to manage the firm's consultants' knowledge, which Exeura believed tobe the driver of its expansion strategy. Before replacing EEMS, the management of Exeura,together with the authors, constructed a methodology to assess the benefits that could begenerated by the introduction of a new infonnation system that would support business processesexecution incorporating the potential benefits of KM. Managers of Exeura decided to design anddevelop a new IT solution in order to assist plan, execute and monitor multiple ongoing projects.This IT system, which is named KMS-Plus, has been partially founded by the Italian Ministry ofUniversity and Research. Exeura sought, by means of the constructed methodology, to evaluatethe potential benefits that KMS-Plus could generate and establish its eventual adoption.In the following sections, we first present an in-depth description of the literature on therelationship between IT and KM. We then describe the proposed methodology and the case studyapplication in Exeura. The methodology has been used to support executives and organizationalanalysts in evaluating the organizational and economic performance of a specific IT solution forknowledge and infonnation management. Finally, we discuss the results of the research, drawconclusions and suggest future developments.ORGANIZATIONAL IMPACT OF IT ON KMThe organizational perspective on IT influences and suggests several approaches for evaluatingits impact on organizational performance. On the one hand, IT can be conceived in a 'traditional'way, as is the case when the organization focuses its efforts on improving information systems inorder to support management and administration without linking IT to other organizational assets.On the other hand, IT can be 'integrated' with other organizational assets, as is the case whenorganizations take into consideration IT as a strategic resource and apply and evaluate it in thesame way as other available resources. In both cases, strategic alignment influences companyperformance, the first on a piecemeal basis, the second on a company-wide scale (see Table 1).

Table 1 - Theoretical Approaches in the interpretation of IT for KMApproachTraditional

Integrated

AssumptionsImprovement of InformationSystems to support managementIT as a source of com petitiveadvantageDevelopment of CoordinatedTechnological SystemsIT as a Coordination EnablerIT as a strategic resource

MethodologiesTechnology BrokerIntellectual Capital IndexSkandia NavigatorBalanced ScorecardIntangible Assets MonitorBusiness Impact of KM (Me Hugh)KM Impact on Business Performance(Carlucci and Schiuma)KM Project Evaluation (Ifthicar andErikson)KM Configuration (Corso et al.)IMPaCT Assessment (Robinson et al.)

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A Methodology to Evaluate the Organizational Impact of IT on Knowledge Management

In the literature, the 'traditional' interpretation of IT is represented by the most widely appliedasset evaluation methodologies, such as the Technology Broker (Brooking, 1996), the IntellectualCapital Index (Roos et al, 1998), the Skandia Navigator (Edvinsson and Malone, 1997), theBalanced Scorecard (Kaplan and Norton, 1996) and the Intangible Assets Monitor (Sveiby,2001). These methodologies consider IT as one of the sources of competitive advantage. But,according to the resource-based analysis, the relationship between IT management and otherforms of investment is one of the most important contributors to sustainable competitiveadvantage (Mata et al, 1995; Sambamurthy et al, 2003). There is strong evidence that companiesneed to assess their investment in IT and in other organizational assets jointly, as they arecomplementary. "Integrated" IT methodologies focus on the performance generated by thebusiness integration provided by IT solutions. In this case, IT plays a dual role in an organization:it is used directly as a production technology system, like other types of investments, and, at thesame time, it takes the role of a coordination system (Malone et al, 1987). Because of thepotential of KM for coordinating organizational activities, we have rejected the traditionalapproaches to evaluate KM systems in favour of an integrated approach.KM tools can only be understood in the organizational context in which they are used. Thus, theadoption of IT solutions for KM should require the analysis of organizational actors and businessprocesses, and the interpretation and codification of internal and external data (Bloodgood et al,2001). Therefore, linking IT organizational value to environmental and contextual aspects that arecritical to strategic management plays a crucial role when implementing new IT systems for KM(Roberts, 2000).

A significant number of papers have focused their attention on specific aspects of theorganizational and economic impact of IT investments for KM. Some models aim at theevaluation of the satisfaction of stakeholders of KM initiatives (McHugh, 2002; Carlucci andSchiuma, 2002); other studies have analyzed the interrelationship between KM initiatives andorganizational variables, providing methodologies to evaluate their mutual infiuence (Ifthicar etal, 2002; Corso et al, 2002); R obinson et al. (2002) have defined an integrated metric, similar toReturn on Investment (ROI), to estimate the profitability of IT investments; Milis and Mercken(2004) have proposed an evaluation process derived from the Balanced Scorecard for theappraisal of IT investments, by defining IT-related metrics for each of the four perspectives;similarly, Huang et al (2006) have investigated the relationship between IT investment andcompany performance, by determining and quantifying the infiuence of IT infrastructure, IThuman resources and IT-enabled intangibles on company performance. All of thesemethodologies constitute valuable "tools" for evaluating the organizational consequences of theintroduction of IT for KM. They all have stressed the difficulties related to this problem that aremainly due to the coexistence and the simultaneous interaction of tangible and intangible assets,and to the mutual influence of both quantitative and qualitative aspects. These approaches,however, do not explicitly address the problem of evaluating IT investment for KM from abusiness process based point of view and do not involve consideration on how IT systems for KMare concretely deployed, adopted and applied within organizations from a technologicalperspective. By adopting both process-based and software engineering perspectives, somedifficulties in evaluating the impact of IT for KM can be overcome.JITCAR, Volume 10, Number 2 11


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A Methodology to Evaluate the Organizational Impact of IT on Knowledge M anagement

The methodology proposed in this paper aims at linking IT business value to contextual aspectsthat are critical to strategic management: environmental, strategic, and managerial factors. Inparticular, our framework defines quantitative and qualitative elements to determine theperformance improvement of the knowledge life-cycle in terms of cost and time reduction,profitability, productivity, cost/benefits ratio, usability of IT solutions, and information quality.The innovativeness aspect of the methodology is its combined use of business processmanagement (BPM) and software engineering approaches in the analysis.THE METHODOLOGICAL APPROACHThe methodology presented in this paper was developed during several research meetingsbetween the authors and Exeura Management through a critical analysis of the traditional andintegrated methodologies discussed above. Our intent was to incorporate the best features ofthese methodologies while extending them to address explicitly the role of KM in the IT solution.The methodology consists of four phases (see Figure 1). In the following sections, each phasewill be described in detail. As previously mentioned, the adoption of IT tools for KM shouldrequire an in-depth analysis of business processes, organizational actors, and internal and externaldata. The methodology has been constructed by taking into consideration the well known BPMtools (Hammer et al, 1993). They have been applied and contextualized referring to the case ofadoption of IT solutions for KM. In particular, attention has been focused on some formal andinformal processes of information and knowledge sharing.

Phase 1: Definition of business performance

Businessprocesscataiog

Phase 2: DefinitionActorscatalog

of technological andFeaturescataiog

organizational modelCost/BenefitDriverCataiog

Int. AssetDriverCataiog

IPhase 3: Interdependency evaluation

IPhase 4: AssessmentFigure 1 - The f low chart of the meth odology

Phase One: Definition of Business PerformanceThis phase consists in the definition of the organizational areas involved in the evaluation processand the estimation of the IT solution benefits in terms of time and cost reduction, profitability,productiveness, cost/benefit ratio, usability and quality of infonnation shared. In particular, theJITCAR, Volume 10, Number 2 12


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A M ethodology to Evaluate the Organizational Impact of IT on Knowledge M anagementmethodology aims at assessing whether the adoption of the new IT solution improves knowledgesharing activities among organizational members, and/or leads to such an increase of skills as toreduce or eliminate some training activities, and/or enhances exchange of capabilities and/orproduces organizational benefits in terms of communication activities, customer satisfaction andproductivity. As a generalization of the analysis, it is possible to consider the variation of somefinancial indicators such as the ROI, i.e. the ratio between the net profit and the cost of theinvestment.Phase two: Definition of Technological and Organizational ModelIn this phase, technological and organizational representation of the firm is defined. Usingsoftware engineering and BPM tools (Unified Modeling Language - UML, Business ProcessReengineering - BPR, Activity Based Costing - ABC), a set of four catalogs is developed (1.Business process catalog, 2. Actor catalog, 3. IT feature catalog, 4. Cost/benefit and intangibleasset driver catalogs). These catalogs aim at giving an outlined description of the most relevanttechnological and organizational aspects affecting the evaluation process, such as businessprocesses and their activities, organizational actors, system features, cost/benefit drivers.1. Business Process Catalog. Business process analysis is aimed at exploiting the processesthat should be managed with a new technology. It could be developed following typicalBPM techniques, such as ICAM Definition Languages and Unified Model Languages(UML) tools. Applying these methodologies, activities and their mutual relations andinterdependencies are defined. Sometimes, firms could use also the process schemestarting from the internal quality control system (where such activities are required). InTable 2, the schema of business process and the relationships between processes andactivities is illustrated. This table is a synthesis of the resuits that could be obtained

following BPM methodologies.Table 2 - Business Processes CatalogProcessesProcess 1

Process m

Activity 1.1. . Activity l.nActivity m.lActivity m.p

Description

.. .

.. .2. Actor Catalog. Actors represent all the organizational members whose behaviors could beaffected by the introduction of the new IT solution. Organizational actors are classifiedon the basis of their competences, skills and expertise after the organizational structurehas been defined (e.g. process oriented, divisional, functional, etc.). The purpose of theactor catalog is to clearly represent the profile of the end user of the new IT solution.Actors can be intemal or external to the organization, and they can also be classified onthe basis of their nature, human or not. An organization chart and job description can beused to schematize the actors involved in the organization. Table 3 illustrates the ActorCatalog.

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A Methodology to Evaluate the Organizational Impact of IT on Knowledge ManagementTable 3 - Actor Catalog

Typology of actorsEmployeeClient/supplierAutomatic (system and machinery usedby the actors)

ActorsActor 1Actor jActor n...

Com petences, Skills, E xpertises

.. .3. IT Feature Catalog. Features of the IT solution are identified by the Feature DrivenDevelopment Agile Software methodology (Highsmith, 2002). This catalog providestaxonomy of the information system features. Requirements of the system are clustered insuch a way that each cluster is composed by a set of homogeneous features. Thus, foreach group of features, managers can identify end users, their activities and

responsibilities, as illustrated in Table 4.Table 4 - IT Feature CatalogFeatureCluster 1

Cluster m

Feature 1.1Feature 1 .nFeature m.1Feature m.p

DescriptionNumber and profile of end user...Number and profile of end user

4. Cost/benefit and Intangible Asset Drivers Catalog . The cost/benefit ratio evaluates theeconomic impact of the new IT system. In "Show me the money", Martin (2002)analyzed the organizational and economic impacts of a specific IT solution for KM byselecting and evaluating four critical factors:a. internal expense (the benefits of KM can be directed at reducing internal costs);b. increasing profit (KM can be targeted to improve low company profit margins);c. measuring 'ha rd' returns (the primary tool used by businesses to measure thevalue of technology acquisition is the ROI);d. 'soft' benefits and comparative evaluation (a firm can also focus directly on theeffectiveness of the investment in generating intellectual capital and otherintangible benefits).

On the basis of the above considerations, specific metrics have been selected to assess aquantitative evaluation of the economic impact when a new IT solution is implemented (Table 5).These metrics are the cost drivers, revenue drivers and intangible asset drivers.The Intangible Asset Driver component of the Cost/Benefit Driver Catalog has been distinguishedfor actors and, successively, for combinations of activities, features and actors. This catalogcontains expected values and variations of drivers with respect to internal actors, taking intoconsideration those values and variations which can be modified by the utilization of potentialJITCAR, Volume 10, N umber 2 14


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A Methodology to Evaluate the Organizational Impact of IT on Knowledge Managementexternal actors. In this way, for example, it is possible to determine how a firm could pay for aspecific activity carried out by a person having a certain skill. Broadly, it could be possible toestimate and measure, for each driver, the modification generated by the introduction of the ITsolution for KM and the ensuing variation of knowledge sharing, capabilities exchange andtraining activities.

Table 5 - Cost/Benefit Driver CatalogTypologyCost DriverRevenueDriverIntangibleAsset Driver

DriverDriver 1Driver jDriver n

Description,, , .

. . .

Formula .. .

Phase three: Interdependency evaluationAt the end of the second phase, all the characterization of the technological and organizationalmodel of the firm is extrapolated/accrued from the business process catalog, actor catalog, ITfeature catalog and cost/benefit driver catalog. The Interdependency Matrix (Table 6) shows theset of drivers for a chosen set of activities/features/actors in a concise way. In fact, in the firstcolumn of the matrix the business processes are bulleted; in the second column, for each process,the activities are bulleted; finally, in the third column for each activity, IT features, actors anddrivers are bulleted. In this way, the Interdependency Matrix aims at identifying areas wherework can be saved so as to help determine benefits.Table 6 - Interdependency Matrix

ProcessesProcessProcess 1

...

ActivityActivity 1.1

Activity 1.2

ITFeaturesFeature 1...Feature nFeature e1Feature 2Feature m

Actors

...

...

DriversDriver 1...

...

......

...

. ...

Driver n

...

...

Phase Four: AssessmentIn this phase, the interdependency matrix is checked in order to assess whether its structure isable to explain and justify the evaluation goals. Moreover, this matrix is utilized to evaluate thedrivers before the adoption of the new IT solution. The same matrix is then utilized to estimatethe same drivers on assuming the adoption of the new IT solution. By comparing the valuedrivers of the 'as is' situation with those of the 'to be' estimation, management is able toJITCAR, Volume 10, Number 2 15


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A Methodology to Evaluate the Organizational Impact of IT on Knowledge M anagementunderstand the potential economic benefit generated by the adoption of the new IT solution.Moreover, the measures obtained in the previous phase can be used to detennine the ROI index.FIELD STUDYThe Case Study EnvironmentThe proposed methodology was tested at Exeura by a group composed of researchers andmanagers of Exeura. In order to decide whether to adopt the KMS-Plus, the firm wanted toevaluate the organizational benefit deriving from it by using the methodology.Data collectionData collection was achieved through meetings with managers of Exeura. The following sectionsdetail the application of the methodological phases previously described.Phase One: Definition of Business PerformanceWithin the wide range of business performance goals, management of Exeura established ROImaximization as the main goal in the adoption of the KMS-Plus system.Phase two: Definition of Technological and Organizational Model1. The Business Process CatalogBy exploiting the already existing EEMS, which provides a formalized representation of thebusiness processes, it was possible to identify the following activities: Trading (Exeura acts as an advisor for the realization of research and developm entactivities for technological solutions); Consultancy (Exeura acts as an innovation consultant);

Research and Development (Exeura acts as an advisor in research and developmentactivities).Table 7 shows the business process catalog for the trading process.Table 7 - Example of business process catalog in Exeura

ProcessesProcessTrading

ActivitiesAcquisition of requirements/call forbidsAnalysis of the feasibility of requirements/call for bidsDevelopment of technical specification related to therequirements/call for bidsContract drawn up

Description

. . .

2. The Actor CatalogThe actor catalog was drawn by using the organization chart and job descriptions. In Table 8, asection of the actors catalog developed in Exeura is shown.

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A M ethodology to Evaluate the Organizational Impact of IT on Knowledge M anagementTable 8 - Exam ple of actor catalog in Exeura

TypologyInternal Employees

External employees

.. .

ActorChief officerProject ManagerResearcherPrsales Engineer

Private customerPublic CustomerPartner

.. .

Description

3 . The IT eature CatalogFeatures of the new IT solution (KM S-Plus) were drawn from the handbook of KM S-Plus. KM S-Plus supports a virtual community paradigm that allows business processes management torepresent tacit and explicit knowledge. This solution was designed considering that knowledge isa dynamic combination of skills, individual values and capabilities that flow amongorganizational members and that only a portion of them is transformed from a tacit to an explicitdimension by means of information systems.The KMS-Plus workspace, when referring to a virtual community, enables several services tosupport group activities, such as synchronous and asynchronous communication (chat, e-mail,forum, blog, etc.), collaborative work (expert search, knowledge brokering, workflowmanagement), project management (project planning, project execution, and project monitoring).All these features increase efficiency and efficacy of managerial and operational processes,adding value to the production process. In Table 9, a part of the features catalog for Exeura isshown.



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A M ethodology to E valuate the O rganizational Impact of IT on Knowledge ManagementTable 9 - Example of feature catalog for Exeura

FeatureGroupRepresentation, acquisition, ans usage ofknowledge

t

FunctionRepresentation of knowledgeRepresentation of processesSemantic representation of actorsSemantic management of contents. ..

Description

4. The cost/benefit and intangible asset driver Ca talogOnce all the catalogues had been developed, drivers were chosen to estimate the economic impactof KMS-Plus, through the analysis of the balance sheet. Then, for each driver, the mostappropriate formula was identified. A section of the cost/benefit and intangible asset drivercatalog is shown in Table 10 and 11.Table 10 - Exam ple of cost/benefit driver catalog in Exeura

TypologyCostDriver

DriverProduction hour perpersonHour of effective usage ofcommunication systemHour per Training

Description...

. ..

FormulaEmployees cost = Productionhour/Employees*cost per hourCommunication service cost = serviceusage cost per hour * number of hour ofeffective usage of the service

.. .Table 11 - Example of cost/benefit driver catalog in Exeura

TypologyIntangibileAssetDriver

DriverConsultant marketvalueNumbers andfrequency ofemployees'complaint

DescriptionKMS-Plus allows consultants to shareknowledge about technical andorganizational aspectsAn higher visibility and control of thevariables related to employees's levelof satisfaction allow an increasing ofthe level of participation of eachemployees...

FormulaIntellectual Capital= average marketvalue per advisorSatisfaction =number andconsistency ofemployees'compliances...



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A M ethodology to Evaluate the Organizational Impact of IT on Knowledge ManagementPhase three: Interdependency evaluationIn Table 12, the interdependency matrix for the trading process is shown. For each set ofprocesses, features, and actors the most appropriate drivers were selected.

Table 12 - ExampleProcessesProcessTradingprocess

ActivityAcquisition ofrequirements/call for bids

Analysis of thefeasibility ofrequirements/call for bids

Developmentof technicalspecificationrelated to therequirements/call for bids

Contractdrawn up

Feature

Knowledgeobjectcreationand storageTradingprocessmanagement

Semanticmanagementof contents

Virtualworkspacemanagement

HumanresourcesmanagementSemanticmanagementof contentsVirtualworkspacemanagementTradingprocessmanagementSemanticmanagementof contents

of the interdependency matrix in ExeuraActor

ManagerAdministrativeProject managerPrsalesengineerManagerProject managerPrsalesengineerPrivate or clientcustomerIT architecturalexpertProject managerPrsalesengineerIT architecturalexpertManagerProject managerPrsalesengineerIT architecturalexpertManagerProject manager

*

DriverProductionhour/employees-

----------------

Num ber of hourcommunicationserviceTraininghour



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A Methodology to Evaluate the Organizational Impact of IT on Knowledge M anagementPhase four: AssessmentThese drivers were estimated on thebasis of the ties identified in interdependency matrix. InTable 13, anexample referring to the driver "Production Hours" is illustrated. Once the whole setof drivers has been estimated, it becomes possible to connect the features of the KMS-Plus withthe activities defined in the business process catalog.

Table 13 - Example of dnver selection inTypology

Internalemployees

Actors

ManagerAdministrativepersonnelProjectmanagerResearcherArchitecturedesignerSoftwaredesignerQualitymanagerProgrammeranalystPrsalesengineer

Partial totalTotal

Totalannualhour167020881000100020005010505

6680505

20458

Productionhour1670

1670,480080016004008404

5344404

16700,4

Traininghour

0417,62002004001002101

1336101

3757,6

ExeuraPersonnel costsCosts

perh ou r

4210

22,722,722,718,822,714,3222,7

Operationalcosts7014016704181601816036320

75350,49170,8

76526,089170,8

329702,08

Training costsTeaching

costs0

26000

16000

2000000

6200

Trainingcosts

06776454061409080

20837,62292,7

19131,522292,7

71090,52400792,6

Results of the assessment showed that the introduction of the KMS-Plus technology to KM in thebusiness activities of Exeura could give rise to the following expected benefits: Increased productivity of personnel (employees are able to carry out the same activities savinga considerable amount of time); Training time reduced by 20% ; 10% increase inmarket value per advisor (because of an increase inknowledge circulation anda reduction in training time); Personnel complaints reduced by 20% .The expected results reveal a greater availability of time per person tobe added to the businessactivities. The ROI was estimated to evaluate the economic benefits that could be reached withKMS-Plus. The starting point for this kind of analysis is represented by the income statement,where the revenue value in 2005 was about 660,000 . On the basis of the value revealed by themethodology, this result could have been achieved with 14,195 hours annually instead of the16,700 effectively used in the production activities. As a result, about 2500 of production hoursthat could have been used to undertake several additional projects. Extrapolating from this data,we calculate that the firm could have reached a revenue of about 815,200 (14,195 productionhours: 662,793 = 17,450 production hours: 815,200 ). Estimating that the total cost ofimplementing KMS-Plus at 400,000 Euros, Table 14 shows that, by taking into account anincrease in revenue of about 150,000 Euros, the KM S-Plus investment has a Pay Back Period ofthree years.JITCAR, Volume 10, Num ber 2 20


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A Methodology to Evaluate the Organizational Impact of IT on Knowledge ManagementTable 1 4- Ex am ple of driver in Exeura

DriverMonetary Estimation ofefficiency Increasing Total

Value ()1" Year152,440

r" Year152,440304,880

i" ' Year152,440457,320

4'" Year152,440609,760

5'" Year152,440762,200

On the basis of the results obtained in this analysis, Exeura could expect tangible benefits fromthe adoption of the KMS-Plus. As a consequence Exeura decided to adopt the KMS+ as anappropriate IT solution for its specific organizational targets.DISCUSSIONIn this paper, we have proposed a methodology to evaluate the benefits that could be gained bythe adoption of an IT solution to support KM activities. The problem, when evaluating IT forKM, is the quantification of benefits from intangible assets. To solve this problem, themethodology uses catalogs that aim to identify the knowledge of the actors and the businessprocesses of the firm, the features of the IT solution, and the drivers of benefit to evaluate theeconomic impact of the new IT solution.In the case study presented, the methodology has been used to evaluate the impact and the benefitof KMS-Plus technology, an IT solution for improving KM within the firm. Exeura sought tounderstand whether the adoption of the new solution could have brought about some benefits.The methodology proved useful in deciding to adopt the new so lution.The proposed methodological approach can be considered as a valid tool to estimate efforts andeconomic benefits through the adoption of IT for KM. However, this tool should not beconsidered alone in this evaluation process. An organizational culture oriented to a knowledgesharing behavior, a strong leadership and commitment by top management, as well as theavailability of an appraisal system w ith incentives towards innovative attitudes are also necessary.CONCLUSIONS AND FUTURE DEVELOPMENTThe methodology described in this paper has been adopted to analyze the performance of an ITsolution for KM. Results show that the adoption of the IT solution can enhance the performanceof the case study firm both from the technological and organizational point of view. From amanagerial standpoint, the proposed framework could help managers in understanding thepotential benefits deriving from the adoption of IT tools for KM; from a methodological point ofview, it adds a new step in the analysis and measurement of the performance of IT tools for KM.To understand the limits of the framework, the next step of the research will be the adoption ofthe methodology within different types of firms (e.g. large enterprises) and in other businesssectors.



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A Methodology to Evaluate the Organizational Impact of IT on K nowledge ManagementREFERENCES1. Adamides, E.D. & Karacapilidis N. (2006). Information Technology support for theknowledge and social processes of innovation management. Technovation, 26, 50-59.2. Bloodgood, J.M. & Salisbury, W.D. (2001). Understanding the influence of organizationalchange strategies on information technology and knowledge management strategies. DecisionSupport Systems, 3 1, 55-69.3 . Brooking, A. (1996). Intellectual Capital: Core Assets for the T hird M illennium Enterprise.London: Thomson Business Press.4. Carlucci D. & Schiuma G. (2002). How Knowledge Management initiatives impact onBusiness Performance, Third European Conference on Knowledge Management. DublinIreland: Trinity College.5. Corso M. & Martini A. & Paolucci E. & Pellegrini L. (2002). Knowledge Managementconfiguration in SMEs Results of an empirical analysis. Impresa e Competizione Knowledge-

Based, XIII AilG Scientific Conference.6. Davidow, W.H. & Malone, M.S. (1992). The virtual Corporation. New York:Harper&CoUins.7. Davenport, T. & Prusak, L. (1998). Working Knowledge: How organization manage whatthey know. Boston, MA : Harvard Business School Press.8. Edvinsson, L. & Malone, M. (1997). Intellectual Cap ital: Realising Your Com pany's TrueValue by Finding its ' Hidden Brainpower. New York: Harper Collins.9. Freiling, J. (2004). A Com petence-based Theory of the Firm. Management Revue, 15(1), 27-52.10. Hammer M. & Champy J., (1993). Reengineering the corporation. A manifesto for BusinessRevolution. New York: Harper Business Essential.11. Hansen, M.T. & Nohria, N. & Tiemey, T. (1999). What's your strategy for managingknowledge? Harvard Business Review, 77(2), 106-116.12. Huang S.M. & Ou C .S. & Chen C M . & Lin B . (2006). An empirical study of relationshipbetween IT investment and firm performance: A resource-based perspective EuropeanJournal of Operational Research, 173, 984-999.13 . Kaplan, R. S. & Norton, D. P. (1996) Using the Balanced Scorecard as a StrategicManagement System. Harvard Business Review, January-February.14. Ifthicar, Z. & Erikson, I. V. & Dickson G . V. (2002). Devoloping an Instrumen t forKnow ledge Management Project Evaluation. Third European Conference on KnowledgeManagement. Dublin Ireland: Trinity College.15. Liebowitz J. & Rubenstein-Montano B. & McCaw D. & Buchwalter J. J. & Browning C.(2000). The Knowledge A udit. Journal of Knowledge and Process Management, 7(1), 3-10.16. March, J.G. (1991). Exploration and Exploitation in Organizational Leaming. OrganizationScience,l{\),l\-%117. Martin, K. (2002). Show Me the Money - Measuring the Retum on Knowledge M anagement.LLRX.com.18. Mata, F . J. & Fuerst, W . L. & & B amey , J. B . (1995). Information technology and sustainedcompetitive advantage: A resource-based analysis. MIS Quarterly, 19(4), 487-505.19. McHugh, M. W. (2002). Measuring the Business Impact of KM in Practice, Third EuropeanConference on Knowledge Management. Dublin Ireland: Trinity College.JITCAR, Volume 10, Num ber 2 22


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A Methodology to Evaluate the Organizational Impact of IT on Knowledge Management20. Milis, K. & Mercken, R. (2004). The use of balanced scorecard for the evaluation ofInformation and Communication Technology projects. International Journal of ProjectManagement, 22, 87-97.21 . Nonaka, I. & Takeuchi H. (1995). The Knowledge Creating Company New York: Oxford

University Press.22. Penrose, E.T., (1959), The theory of the growth of the firm, Oxford: Basic Blackwell.23. Reyes, P. & Raisinghani, M. S. (2002). Integrating Information Technologies andKnowledge-based Systems: A Theoretical Approach in Action for Enhancements inProduction and Inventory Control. Knowledge and ProcessManagement, 9(4), 256-263 .24. Roberts, J., (2000). From Know-how to Show-how? Questioning the Role of Information andCommunication Technologies in Knowledge Transfer. Technology Analysis and StrategicManagement, 12(4), 429-443 .25. Robinson, H.S. & Carrillo, P.M. & Anumba, C.J. & Al-Ghassani, A.M. (2002). EvalutingKnowledge M anagement Strategies: An IMPaCT A ssesment. Third European Conference onKnowledge Management. Dublin Ireland: Trinity College.26. Roos, G., Roos, J. & Dragonetti, N. & Edvinsson, L. (1998). Intellectual Capital: Navigatingin the New Business Land scape. New York: University P ress.27. Sambamurthy, V. & Bharadwaj, A. & Grover, V. (2003). Shaping Agility through DigitalOptions: Reconceptualizing the role of IT in Contemporary Firms. MIS Quarterly, 27(2),237-263.28. Sveiby, K. E. (2001). Methods for Measuring Intangible Assets, [online],http://www.sveibv.com/articles/IntangibleMethods.htm.29. Teece, D.J. & Pisano, G. & Shuen, A. (1997). Dynamic Capabilities and StrategicManagement, Strategic Management Journal, \S{7), 509-533.

30. Tiwana, A. (2000). The Know ledge Management Toolkit: Practical Techniques for Buildinga Knowledge Management System, Prentice-Hall PTR, NJ.31 . Tyndale, P. (2002). A taxonomy of knowledge management software tools: origins andapplications. Evaluation and program p lanning,15, 183-190.32. von Krough, G. & Ichijo, K. & Nonaka I. (2000) Enabling Knowledge Creation: How toUnlock the Mystery of Tacit Knowledge and Release the Power of Innovation, New York:Oxford University Press.33. Wensley, A. K. P. (2000). Tools for knowledge management. BPRC Conference onKnowledge Management: Concept and Controversies, 10-11.34. Zack, M.H. (1 999). Developing a K nowledge S trategy. California Management Review,41(3), 125-145.



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A M ethodology to Evaluate the O rganizational Impact of IT on Know ledge M anagementBIOGRAPHIESMichle Grimaldi received his first-class honours degree in 2002 and a Master's in IndustrialEngineering in 2003. In 2005 he achieved his PhD in Industrial and Management Engineering atthe University of Rome 'Tor Vergata'. He actually works as researcher at the the faculty ofEngineering at the University of Cassino (Italy). He has published papers in International Journalsand Conference Proceedings. His current research field concerns knowledge managementstrategies and metrics.Pierluigi Rippa completed his Ph.D in Business and Managerial Engineering at the University ofNaples Federico II. He currently works as researcher at the Department of Business andManagerial Engineering, University of Naples Federico II (Italy). His research interests includeinformation technology adoption and organizational interaction, ERP systems development andadoption, Statistical and Fuzzy application in Decision Support Systems. He has published papersin international journals and presented researches in international conferences.Massimo Ruffolo is a Computer Science researcher at the Institute of High PerformancesComputing and Networking of the Italian National Research Council (ICAR-CNR). He istemporarily posted to Exeura s.r.l., where he fills the position of Senior Researcher. He receivedthe Doctoral degree in System Science and Computer Science from the University of Calabria in2000 and the Bachelor degree in Managerial Engineering in 1996. He received in 2006 the masterdegree in enterprise management. He has led or participates in several research and developmentprojects aimed to obtain technologies and infrastructures for knowledge management. He haspublished several papers in international scientific conferences and journals in the areas ofknowledge representation and reasoning, ontology and semantic web, data/text mining,knowledge management and its organizational impact.ACKNOWLEDGMENTAn earlier version of this Paper was presented at the GITM Conference in 2007 held in Naples.Referees suggested submitting the paper to JITCAR. We would like to thank the referees for theiruseful suggestions and appreciation about our work.



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a methodology to evaluate the organizational

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