Consultants operate as external intermediaries who facilitate organisational learning by bringing in external knowledge (Westrup and Knight, 2000, pg 638; Robey et al., 2000, pg
145).
The available literature shows that little research has been done into the extent to which effective learning occurs when organisations use consultants. One such study, conducted by Werr (2002, pg 1) does, however, propose that: "projects in which consultants and employees of the hiring organisation interact extensively provide large opportunities for individual learning."
It is realistic to suppose that user organisations do not fully understand an ERP system during implementation, because it may be the first experience of this system for the client. This is why the implementation services from a consulting firm are introduced for a project in the first place, and the user organisation anticipates knowledge transfer to them during the project. Although organisations use consultants as an implementation partner to help during the implementation process, it is also important that knowledge is transferred from the
consultant to internal employees, and in the case of multiple implementations to the in-house project teams, who will be the long term users of the new system (Chang, 2004, pg 6).
Prior to an ERP implementation, a firm has to configure its packaged software in order to specify the business rules that would constrain organisational decision making. Configuration involves populating many tables with business rules. To succeed in configuration, a firm has to understand the capabilities and limitations of the software and be able to describe the business processes that would be supported by the ERP (Lee and Lee, 2000, pg 285). The complexity of the ERP software packages creates significant knowledge barriers (Robey et al, 2002, pg 29.
Typically firms would hire consultants to overcome configuration knowledge barriers inherent in this complexity. Consultants bring external software expertise gained through formal training and prior experience (Chang, 2004, pg 6). Thus consultants apply their knowledge either by configuring the software themselves or by working with the firms' core teams. More successful companies effectively manage the relationship with their consultants (Ibid, pg 7). This entails bringing in consultants to help address specific problems and then letting them go. Sometimes consultants may even be "phased out" before implementations are even completed, although they would be expected to help with future software upgrades.
Even where consultants are regarded as being in "the driver's seat," it is important to avoid over-dependence and ensure knowledge transfer (Robey et al, 2002, pg 32). In successful cases, consultants play a key role in transferring external knowledge to the organisation but that role must be carefully managed by the client firms.
According to agency theory (Haines and Goodhue, 2003, pg 27), organisations implementing ERP systems and engaging consultants to fill in the knowledge gaps have to consider that organisational life is sometimes driven by self-interest. For the principal-agent relationship of an implementer and a consultant, this means that the implementer has to be able to control the consultants' behavior to curb opportunistic behavior.
Westrup and Knight's (2000, pg 637) research warns that organisations will continue to be offered the seductive vision of strategic positioning and control through IS. This is the business of both consultants and vendors. But, at the same time, IS in use will continue to fall considerably short of these expectations. They question the much quoted view that ERP
systems incorporate 'best business practice' and show that this is an effect that has to be constructed.
One of the key players in this activity is argued to be management consultants. Using empirical evidence the paper elaborates the pivotal role of consultants and proposes that much of the ERP phenomenon is based on the efforts of management consultants to create new markets for their expertise (ibid).
Haines and Goodhue (2003, pg 33) suggest that the key to ensuring desirable behavior is the knowledge possessed by the implementer. This knowledge enables the implementer to evaluate the consultant's behavior and also determines the level of involvement of consultants in the first place. It is obvious that the more knowledge and skills are available internally, the less dependent an organisation becomes on consultants. But in the case of an ERP implementation, hardly any organisation has all the necessary knowledge in-house.
Methodology and technical knowledge and skills needed during the implementation may well be provided by consultants. Some of this knowledge is only needed temporarily and does not have to be retained. The implementer has to be aware, though, that some of the technical skills, such as system administration, system customisation, and a good conceptual understanding of the system, are needed beyond the day of going "live." If not already present these skills need to be transferred into the organisation during the implementation.
Among the more strategic roles in an implementation project are project leadership and management (Lian, 2001, pg 46). Although it is clear that an organisation is better off if it has this knowledge in-house, this is sometimes not the case. The first option is to increase, before beginning the project, the implementer's internal knowledge and thereby limit the need for consultants, especially in strategic aspects of the project. This could be done by hiring appropriately experienced and skilled people into the organisation, which is a challenging task (Robey et al, 2002, pg 18).
Haines and Goodhue (2003, pg 34) also recommend the implementing organisation purchase the services of a second consulting firm, hired solely to give feedback on the first consulting firm's performance. This, however, creates a more complex set of relationships between the vendor and the consultants, having its own set of problems. This is a costly alternative, however, it may be necessary when in house experience is limited, especially if it is made clear to all parties from the time of the initial discussions.
Where companies support the core implementation team and manage their relationships with consultants well, they succeed in overcoming knowledge barriers related to the configuration of ERP software. Where they invest wisely in training and adopt an incremental approach to organisational change, they deal more successfully with the assimilation of the ERP system (Esteves et al, 2002, pg 4; Boudreau and Robey, 1999, pg 294).
The transfer of knowledge is thus seen as a key aspect in the relationship between implementer and consultant (Lee and Lee, 2000, pg 206; Chang, 2004, pg 6). This has implications on how organisations select an "appropriate" consultant. Expertise, experience, and costs are criteria commonly included in the evaluation of a consultant. The organisation also needs to take into account the willingness and ability of consultants to transfer critical knowledge to the implementer, so that effective learning does take place within the organisation. The key is how this transfer takes place, which is dealt with in the next section.