Academic journal article Journal of the Association for Information Systems

Managing the Complementarity of Knowledge Integration and Process Formalization for Systems Development Performance 1

Academic journal article Journal of the Association for Information Systems

Managing the Complementarity of Knowledge Integration and Process Formalization for Systems Development Performance 1

Article excerpt


Systems development processes have received significant negative publicity due to failed projects, often at large costs, and performance issues that continue to plague IS managers. This study complements existing systems development research by proposing a knowledge management perspective for managing tacit and explicit knowledge in the systems development process. Specifically, it proposes that collaborative exchange and integration of explicit knowledge across phases of the development process positively influence the performance of systems development. It also suggests that process formalization not only directly impacts development performance but also moderates the performance effects of the knowledge integration factors. Data for the empirical study were collected from 60 organizations that are part of a user group for one of the world's largest software development tool vendors.

Empirical results provide strong evidence of the importance of supporting tacit and explicit knowledge processes in systems development as well as process formalization. The findings suggest that: (i) collaborative exchange among IS employees that integrates their tacit knowledge positively impacts development performance, (ii) explicit knowledge integration in development artifacts across different phases of the systems development process positively impacts development performance, (iii) formalization of processes that establishes routines and discipline yields performance gains, and (iv) the performance effects of both collaborative exchange and explicit knowledge integration are moderated by the formalization of the process. These results have implications for how both tacit and explicit knowledge integration can be managed during systems development, and how formalization of processes complements their relationship with development performance.

Keywords: Knowledge exchange, explicit and tacit knowledge, collaboration, process formalization, software development performance


Managing systems development projects so that the desired functionality is delivered in time and on budget continues to elude organizations (Tiwana and Keil, 2004; Wallace et al., 2004). It is estimated that U.S. corporations spent approximately $1 trillion on underperforming IT projects during the period 1997-2001, accounting for nearly 40% of total IT expenditure (Benko and McFarlan, 2003). Moreover, about 75% of IS projects are late, over budget, do not deliver core functionality, or are cancelled outright (Glen, 2006). Similarly, on average, one-third of a software development project's budget is spent on fixing defects that originated from faulty requirements (Pratt, 2006). Addressing these performance problems related to systems development becomes even more important due to increased organizational dependence on information systems for mission-critical activities and the magnitude of potential losses associated with poor systems quality. In today's business environment, which is fast-paced and rapidly changing, organizations must be able to respond to change with information systems that are delivered or modified with agility.

Over the past two decades, research and practice in systems development have been dominated by the view that the application of engineering principles will lead to a more manageable, predictable, and disciplined systems development process with consistent performance outcomes. Tools support Computer-Aided Software Engineering (CASE), new development methodologies, and new modeling techniques and frameworks like the Capability Maturity Model (CMM) attempt to formalize the development process and improve control to provide better outcomes in terms of quality, time, and budget. More recently, in response to the rapidly changing business and technical environment, there is an increased emphasis on imperatives like responsiveness, time to market, and programming skills (Baskerville and Pries-Heje, 2001). …

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