KNOWLEDGE MANAGEMENT AND NEW PRODUCT DEVELOPMENT: LEARNING FROM A SOFTWARE DEVELOPMENT FIRM James A. Sena A B. (Rami) Shani California Polytechnic State University California Polytechnic State University San Luis Obispo, California San Luis Obispo, California jsena@calpoly.edu ashani@calpoly.edu Abstract 1 Introduction New product development has emerged as the lifeline for The core of the new product development [NPD] process centers on knowledge creation, utilization many businesses and industries. This process can be and the management of knowledge. This characterized as complex to organize and manage. The manuscript uses a software firm case to establish management of NDP units and processes requires both a framework to aid managers in deciding on an maintaining a balance between order and disorder and effective work design configuration for managing careful attention to knowledge management. a NPD project. A framework is presented which identified five dimensions that affect performance The core of the NPD process centers on knowledge, it's in an NPD work environment including: the creation, utilization and the management of knowledge. business environment; the social subsystem; the Within the context of the knowledge-base firm, technological subsystem; the management knowledge has a critical strategic value since it fosters system; and, the knowledge management system organizational actions and helps the firm establish that provides the context within which NPD sustainable competitive advantage. Organizational efforts are designed and developed. Our case knowledge is a unique asset and a scarce commodity of an study provided an initial support to the argument organization. Yet, creating, replicating and transferring that within the context of knowledge-based firm, knowledge within NPD teams, between NPD teams, and NPD can be designed as a set of dimensions, each of which fulfills a necessary requirement for between organizational units is difficult to carry out. achieving NPD sustainability. The requirements Managing knowledge and knowledge creation is a for achieving sustainability include formal and complex task that gives rise to multiple organizing and informal arenas for exchange of ideas; continuity management issues [Adl00]. of support and improvement efforts maintained over a long period of time; team composition The breakthroughs during the last ten years in information reflected in the totality of the business functional and communication technologies have irreversibly altered areas of expertise; goals, scope and purpose the ability to conduct business unconstrained by the defined and refined on an ongoing basis, and; traditional limitations of time and space [Nad99] The effective processes for implementing continuous massive demands imposed by time compression fostered improvements. increased attention within R&D and engineering units for information and communication technology. One area where enhancements can be made is continuous improvement and change management in the NPD process. The literature on NPD seems to be based on a variety of disciplines and theoretical perspectives - The copyright of this paper belongs to the paper’s authors. Permission to copy strategy, organization theory and design, organization without fee all or part of this material is granted provided that the copies are not made or distributed for direct commercial advantage. behavior, marketing, sociology of organizations and Proc. of the Third Int. Conf. on Practical Aspects of engineering. Knowledge Management (PAKM2000) Basel, Switzerland, 30-31 Oct. 2000, (U. Reimer, ed.) Strategic management coupled with sociotechnical system http://sunsite.informatik.rwth-aachen.de/Publications/CEUR-WS/Vol-34/ thinking provides a basic language and analytical framework to advance the investigation of the relationship A.B. Shani, J.A. Sena 19-1 between new product development and knowledge management. The objective of this manuscript is to The business environment cluster is comprised of establish a framework to aid managers in both deciding on elements and forces in the market place in which the firm the most effective work design configuration for managing competes. The social subsystem cluster refers to the a complex new product development project and to persons who work in the organization. Individual attitudes explore the potential causal relationships between new and beliefs, competencies and skills, relationships product development design configurations and between group members, relationships between knowledge management. We address these relationships supervisors and subordinates, relationships between through an illustrative case of new product development groups, cultures, traditions, past experiences, assumptions, in a software firm. values, rites, rituals, work habits and practices, and emergent role systems all are an integral part of the social 2 Towards an Alternative Framework cluster. The technological subsystem cluster refers to the The sociotechnical systems perspective considers every tools, techniques, devices, artifacts, methods, organization to be composed of a social subsystem (the configurations, procedures and knowledge used by the people) using the tools, techniques and knowledge (the organizational members to acquire inputs, transform technical subsystem) to produce a product or a service inputs into outputs and provide outputs or services to valued by the environmental subsystem (i.e., [Pas93], clients or customers. The management systems cluster [Tri82]). The degree to which the design of the technical refers to the systems that attempt to link the subsystem, social subsystem, and the environmental environmental, technological and social subsystems. subsystem are integrated determines the success and Business strategy, business design, business capabilities, competitiveness of the organization [Sha92]. While every business processes and change management processes organization is perceived as a sociotechnical system, not provide the key elements in this cluster. The knowledge every organization is designed according to sociotechnical management system provides the context within which system design principles, methods, processes and new product development efforts are designed and philosophies. The economic performance of firms based developed. on sociotechnical system design principles has been significantly better than comparable organizations using 3 An Overview of the CDM Company conventional designs [Van93]. CDM is a firm devoted to building, implementing, and supporting agent-based “Cooperative Decision Making” In our proposed framework we identify five clusters of tools for distributed problem solving. Application areas dimensions that affect performance in an NPD work include: facilities management, transportation planning, environment. Figure 1 portrays system performance and military logistics and control, and engineering design. The sustainability as an outcome that is influenced by the organization of CDM on the surface does not appear to be causal relationships among the five clusters. untypical for a software development firm. The various departmental units function with a minimum of supervision. Frequent meetings, a good infrastructure of networks and electronic communications, and a well- thought through layout of workspace facilitate the firm’s operation. The department structure appears to be straight forward. However, much of the product work is conducted by supporting groups. The leadership of the product team is divided between a product leader and a technical leader. One product example is a contract for developing a product (e.g. the Collaborative Infrastructure Assessment Tool [CIAT] for the waterfront operations at the San Diego Naval Station). The product, once developed, can then be marketed to other customers (e.g. the Naval Station at Pearl Harbor). Responsibility and direction is divided among two leaders, the Product Manager and the Technical Lead, and the various departments (e.g. testing, customer support and training). This division of responsibility could dilute the direct management-line for product management – in effect, disputes or differences Figure 1: Framework for NPD and Sustainability either have to be worked out through discussion or are A.B. Shani, J.A. Sena 19-2 brought to senior management for resolution. This has not been a significant problem because the work content and work constituency is relatively homogeneous. New products evolve from existing products and involve technology transfer and adherence to grounded technologies. 4 The Product Development Process CDM has a well defined process for product development. Figure 2 presents a graphic of this process. As in many firm’s there are several points where an iterative cycle is depicted. Preceding the process is the product initiation phase where RFPs (Requests for Proposals) or to prepare bids for sole-source contracts.. A good deal of this effort involves customer liaison and knowledge acquisition. The product responsibility is divided among the product manager, the technical lead, and various support The choice to have a dual set of product leaders – the product manager and the technical lead is a clear example of the rationale for stocks of knowledge. The technical lead devotes his efforts to insure that the product evolves by developing coordination mechanisms to support software version control, libraries of shared and re-usable code, and the application of agent-based technologies. In Figure 2: New Product Development Process addition, the technical lead oversees the production of the software team, makes assignments and reviews the work The typical system can be retrofitted to a particular of the software developers. The technical lead coordinates customer (e.g. the Naval Station at Pearl Harbor contracts and schedules testing and quality control. The product for the CIAT system for it's waterfront operations -- the manager interfaces with the technical lead but is not system is then tailored to the pier configurations and involved in the actual software development. Instead the special needs of the station.) Each product takes on a product leader handles the external interfaces with the particular flavor by adding agents, some of which have customer and management. Knowledge about customer been previously developed and modified to meet special needs and expectations can be tempered and translated to customer needs, or agents that are specifically developed agent technologies using a standardized framework for to meet unique needs. Because of this agent-based work definition. technology CDM is successful in it's NPD and is more able to sustain product development and viability. The program design and testing are completely the responsibility of the technical lead in coordination with Organization design is characterized by three key the programming team. Similarly the hardware, services elements: differentiation, coordination and integration. and supplies, management and customer liaison, training Since knowledge, compared to other assets is and documentation are completely under the responsibility characterized by its intangibility, tacitness and action of the product manager in coordination with the service relatedness, it is harder to manage in comparison to other groups. When the product work is completed the product organizational assets. Coordination refers to the binding is delivered to the customer by both the product manager together of the various tasks, activities and efforts. The and the technical leader. Since CDM deals primarily in a choices made to facilitate coordination will influence the military environment most of these contracts are modular organization’s ability to accomplish goals. The designer’s and are spread over a series of years or periods. Thus, choice about how to bind together the tasks and activities there is not always a clear, precise product delivered. influences the extent to which the different stocks of Instead, the product evolves by adding features and knowledge held by individuals will be shared and acted capabilities. CDM markets a core product (e.g. The CIAT upon. As such coordination is not only combining the system) that consists of a basic set of agents. tasks, activities and efforts but also combining the unique stocks of knowledge held by individuals. The design of the CIAT product consisted of identifying system requirements, deciding on a format for system presentation, and specifying the system design. The spatial agent technology employed relied on the acquisition of A.B. Shani, J.A. Sena 19-3 data by artificial intelligence techniques in the form of 4.1 CDM’s Product Development and Sustainability data definition and rule specification. The initial customer There are several factors that make CDM unique with contact was the product manger. Here the data collection respect to supporting and enhancing product and rule acquisition process was defined. Area specialists sustainability. There is a clear path for product consisting of system analysts from the programming teams development. The CIAT team was supported by that collected the requisite data. The database schema and permanent support staff throughout the development. rule base were initially defined -- this process was one of Unlike most of the software product (or more specifically refinement, an iterative cycle leading to greater and project) development efforts there is a small nucleus greater detail. formed for the actual development. There is not the All of these agents must be defined jointly by the technical project "ramp up -- team assembly" that often occurs in lead and the product manager along with area experts software development. Instead, an ongoing set of teams during the product design phase. The product manager (e.g. programming, testing, and service) provide stability and the technical lead together compile the estimates and and an external perspective. schedules for the product construction, Here The intelligent agent and modular software components arrangements need to be made with programming teams, form a software warehouse that allows CDM to roll-out testing groups, service groups, as well as preparing for alternative versions. Once an agent is developed it stands documentation and training. All of these teams or groups as a sub-product or feature that can be interfaced or are independent of the product itself. They transcend the included in the system. In this way business results can be product, existing as entities beyond the product work. sustained. Even though CDM has a strong social This is a key element for sustainability. Since they have atmosphere and optimal working conditions there is little major ongoing products with the military that are now in "ego" involvement in the product development -- the main the maintenance mode these business areas must exist to concern is making certain that the system is a quality support those products but on the other hand they can product. The focus is on "how" best to design the agents ramp up to provide the needed services for new product not "who" is doing the design. developments. The product construction consists of parallel operations. 5 Discussion and Conclusions Here the technical lead and the product manager work somewhat independently. The computer programs are The study of the NPD at CDM provides an initial support written by the programming team. Many reusable modules to the argument that within the context of knowledge- are deployed – taking advantage of existing based firm, NPD can be designed and managed in various technology/expertise and work already tried and tested. ways. These "various ways" can be described as a set of This is another ingredient in sustainability, they do not dimensions, each of which fulfills a necessary requirement have to create a new product from scratch. The for achieving NPD sustainability. The set of necessary but programming team members may be involved in multiple not sufficient requirements for achieving sustainability can developments at the same time. The product definition be referred to as design requirements. Looking at the and design are such that coders and programmer are CDM case the following are a few of the design somewhat interchangeable. requirements that seem to have been utilized: Legitimate formal and informal arenas for exchange of ideas were As modules are developed they are turned over to the created; the continuity of support and improvement efforts testing group. Each module goes through a variety of tests for the products was maintained over a long period of – unit testing of each module and system testing of the time; the composition of the NPD team reflected the modules together. The testing group is accustomed to totality of the business functional areas of expertise; goals, working with agent technologies and is familiar with their scope and purpose for the NPD teams were defined and presentation system. Before any product is presented to refined on an ongoing basis, and; there were effective the customer it is tested for internal reliability and processes for implementing continuous improvements adherence to specifications. As the testing and during the NPD process. programming proceeds documentation is initiated. CDM has an independent group that produces professional One of the key findings from the case is that CDM quality manuals, online and web-based materials. They established some type of a legitimate forum for exchange liaison with the technical lead, the programming team and of ideas and actions. From an organization design the testing group. While the CIAT programs are being perspective, the forum is seen as a mechanism with a developed, tested and documented the service group structural configuration and processes that are devoted to arranged for the purchase and configuration of the improvements and learning. The iterative cycles approach network and workstations for the customer. coupled with the deliberation mechanisms for information-sharing and sense-making provided an ongoing opportunity to improve and sustain business A.B. Shani, J.A. Sena 19-4 results and a way to foster learning at all levels and across all levels of the firm. Our case suggests that not only is a learning mechanism an integral part of sustainability but that the type of the learning mechanism is a clear managerial choice that has a significant influence on the organizational ability to develop and nurture sustainability. References [Adl00] N. Adler and P. Docherty. Bringing business into sociotechnical theory and practice. Human Relations. 51(3). 319-345. 2000. [Pas93] W. A. Pasmore. Designing Work Systems for Knowledge Workers. Journal for Quality and Participation. July-August. 1993. [Sha92] A. B. (Rami) Shani, R. Grant, and R. Krishnan. 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