The client role in consultancy relations during the appropriation of technological innovations

Research Policy 31 (2002) 657–671

The client role in consultancy relations during the appropriation of technological innovations Donald Hislop∗ Sheffield University Management School, University of Sheffield, 9 Mappin Street, Sheffield S1 4DT, UK Received 14 November 2000; received in revised form 23 April 2001; accepted 6 June 2001

Abstract This paper examines the role played by client firms in shaping their consultancy relations during the implementation of similar technological innovations in four organisations. While much of the literature on consultants underplays the role of clients, this paper shows that client firms can play a key role in shaping their consultancy relations. The paper utilises Granovetter’s concept of embeddedness to suggest that the diversity of client behaviour found, was influenced by the social networks and organisational cultures that client staff were embedded within. Further, the character of the consultancy relations developed also influenced the innovation processes examined. © 2002 Elsevier Science B.V. All rights reserved. Keywords: Innovation; Embeddedness; Consultants; Clients

1. Introduction The 1990s witnessed a significant growth of academic interest in the consultancy industry. In much of this work consultants are presented as having a key role in stimulating the creation, diffusion and adoption of the latest ‘best practice’ fashions and new organisational practices (e.g. Bloomfield and Danielli, 1995; Bloomfield and Best, 1992; Clark, 1995; Fincham and Evans, 1999; Grint, 1994; Grint and Case, 1998; Huczynski, 1993; Sturdy, 1997a). However, consultants only exist in relation to clients, and the nature of the client–consultant relationship and the role of the client firm in shaping this relationship has tended to remain neglected and unexplored. Thus, the concern of this paper is to examine the role of the client company in shaping client–consultant relations, as an attempt to provide a counter-balance ∗ Tel.: +44-114-222-3438; fax: +44-114-222-3348. E-mail address: [email protected] (D. Hislop).

to the focus on consultants which has dominated most of the academic writing on the subject. An equally important objective of the paper is to examine how the innovations being appropriated were influenced by the nature of the client–consultant relationship. The paper presents empirical data on four case study firms, which were all implementing multi-site enterprise resource planning (ERP) systems with the aid of consultants/suppliers. The late 1990s saw a massive growth in the implementation and use of ERP systems across a large range of industries (Economist, 1999a,b; Davenport, 1999). These systems could therefore be described as one of the current fashions in business systems (Abrahamson, 1996). Thus, at one level it could be suggested that the four case companies were simply passive followers of one of the latest fashions. However, a more detailed analysis reveals significant differences between the companies in terms of both the type of consultancy relations developed, and the way they implemented and used these systems. Thus, at this more detailed level the four case companies

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were by no means passively following ideas permeated by consultants. The paper suggests that important new insights into the role of clients in the formation and development of their consultancy relations can be gained by viewing such behaviour through the lens of Granovetter’s embeddedness concept (Granovetter, 1985). This provides a useful theoretical tool for explaining these differences, as the client behaviour in each case was importantly shaped by such factors as the pre-existing social relations and past experiences of the relevant organisational actors, as well as the culture of their companies. Further, the data presented suggests that the specific ways in which the client behaviour in the case companies was embedded in its social, and organisational context were important in shaping the character of the innovations being appropriated. Primarily, the data presented suggests that the power and authority granted to consultants affected the extent to which the ERP systems being implemented were customised 1 to the specific needs of the organisational context.

2. Theoretical framework and empirical focus The significant expansion in the size of the consultancy industry which has occurred since the early 1980s (Fincham, 1999, pp. 335–336; Sturdy, 1997a, p. 521) has been paralleled by a similar growth of academic interest in the area. This paper examines the character of client–consultant relations, and considers how the behaviour of client firms shape the character of this relationship, as well as how the embeddedness of these social relations played a key role in shaping the character of the innovations being appropriated. The importance of focusing on these issues is related to the relatively limited attention that has been given to them in the burgeoning literature on the topic. One of the most dominant perspectives to emerge in the 1980s and 1990s placed its emphasis on the role of consultants in client–consultant relations, with consultants being portrayed as by far the most active 1 Customisation in relation to ERP systems in the paper refers not to the configuration of software parameters, which is a standard part of any ERP implementation. Instead ERP customisation, as outlined later, refers to more fundamental changes to the functionality, or source code of ERP modules.

partner in constituting client–consultant relations. This can be illustrated by some of the many, vivid metaphors used to describe the role of consultants. For example, consultants have been portrayed as: witchdoctors (Clark and Salaman, 1996a; Micklethwait and Woolridge, 1996); story tellers (Clark and Salaman, 1996b); performers (Clark, 1995; Clark and Salaman, 1995); magicians (Schuyt and Schuijt, 1998); seducers (Sturdy, 1998); and religious leaders (Huczynski, 1993). While these different metaphors provide a diverse range of images about consultants there is also a significant element of commonality in that they all portray clients as relatively passive. The flip-side of all the above metaphors is that clients take on the role of the audience, which not only suggests that they are relatively passive, but that they may also be prey to the tricks and methods of the consultant/performer (Sturdy, 1997a). One consequence of this is that there has been a significantly greater focus on the tools, techniques and methods used by consultants than there has been on client behaviour and attitudes. 2 This assumed passivity concerning the client role in these innovation processes is also embedded in much innovation diffusion literature, which typically assumes that clients simply adopt and use innovations diffused by consultants (Hislop et al., 1997). However, there has been a growing body of work which has challenged the assumptions of the above perspectives. Both Fincham (1999) and Sturdy (1997a,b, 1998) argue strongly that the development of client–consultant relations need to be seen as an interactive process, which requires greater recognition of the active role played by clients in constituting their consultancy relations. Two relevant examples of writing based on such assumptions are Newton (1996), which illustrates how client recruitment methods shape consultancy relations, and McGivern 2 One area where attention has been paid to the role of staff from client organisations is in providing one of the main underlying catalysts to the use of consultants. For example, one important reason put forward to explain the use of consultants is in attempting to alleviate the existential anxieties and uncertainties of organisational staff (Abrahamson, 1996; Gill and Whittle, 1993). However, while this perspective highlights the active role of clients in providing a potential trigger to the use of consultants, this work does not elaborate any further on the character of client–consultant relations which subsequently develop, and the role of clients in shaping them.

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(1983), which is particularly successful at making visible, and giving a voice to clients in their consultant relations. This paper attempts to build upon and extend this tradition of work, through making an empirical and theoretical contribution to the understanding of the way in which client behaviour shapes consultancy relations. Firstly, this paper places a substantially greater emphasis on client behaviour than the work of Sturdy, which has primarily focused on client attitudes, values and perceptions. Therefore, the paper usefully complements Sturdy’s work through revealing aspects of the client role which have been under-researched. Specifically, this paper examines all areas of client behaviour with respect to their consultancy relations: from the initial recruitment and selection methods used, to the way client behaviour shaped the character of ongoing working relations. The other theoretical contribution of the paper is through the utilisation of Granovetter’s embeddedness concept, which usefully relates the specific client behaviours described to the social and organisational context that these actors inhabited. In terms of the consultancy relations examined, the paper considers how the behaviour of staff from the client firms examined was influenced by the way these individuals were embedded within both existing networks of social relations, and also within particular organisational cultures. The primary focus of the paper is therefore on the evolving social relations during what Wilson et al. (1994, p. 226) referred to as ‘processes of implementation’. The price of this focus, is that only a limited amount time/space is devoted to technical characteristics of the systems/solutions being appropriated. However, the benefit of this focus is that it helps reveal important insights about the nature of social relations during such processes, and how they influenced the innovations being appropriated.

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The other central issue addressed in the paper is the way in which the consultancy relations shaped the innovations being appropriated, which does allow some consideration of the technical character of the systems being appropriated. This is an issue which has also been relatively neglected by the vast majority of the literature on consultants (with the exception of Bloomfield and Danielli, 1995; Bloomfield and Best, 1992). One of the major consequences of this is that relatively little is known about exactly how the appropriation of technological innovations is shaped by the role of consultants and the character of client–consultant relations that develop. Other research, on the diffusion of innovations, shows how the nature of network relations can significantly shape innovation processes. For example, the role of professional associations has been shown to importantly shape the appropriation of similar innovations, for example, influencing what processes, tools or methods came to be regarded as constituting ‘best practice’ (Robertson et al., 1996; Swan et al., 1999). These insights, combined with the massive growth in the use of consultants outlined above, suggest that the role of consultants may have an equally important influence. Therefore, one of the main objectives of this paper is to shed some light on the role of consultants in the appropriation of technological innovations.

3. Case company client–consultant relations: similarities and differences The data presented is drawn from four case study companies (see Table 1), all of which were implementing EPR systems. While these companies are from different countries, and design, manufacture and sell quite different products, there were a number of striking similarities between them, which made the

Table 1 Organisational and innovation characteristics Company

Company details

International project

Number of sites involved in innovation project

UK-cast UK-pharm France-connect Swed-truck

UK casting and injection moulder Specialist, international pharmaceuticals corporation French mechanical connectors Swedish based, international fork lift truck company

Yes Yes No Yes

12 4 (initially) 6 11 divisions (>20 sites)

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innovation processes they undertook highly comparable. Firstly, they had all traditionally been structured into highly autonomous business units, which had only limited interactions, being supported by central corporate functions such as IT. Secondly, the ERP systems they were implementing were of an extremely similar scale, involving a significant number of autonomous, geographically dispersed business units. Finally, the motivations behind this change were also relatively similar—to introduce an element of standardisation to some core business processes. Our research was concerned with examining the appropriation of these innovations, with a specific focus on the networking and knowledge utilisation/development practices undertaken. However, the data presented here focuses narrowly on the role of consultants in these processes. A qualitative and longitudinal methodology was utilised for this research, which involved each case company being visited regularly for a period of 18 months to 2 years. The main source of information was semi-structured interviews with relevant organisational personnel (i.e. those key individuals involved in the particular projects over the period of study). Before the empirical data is presented it is necessary to make a caveat concerning the data. Through presenting data only from the client perspective there is the risk that the role of individual client personnel has been over-emphasised, however, the research methods used minimised the extent to which this could occur. Firstly, in each organisation a range of different personnels were interviewed, which allowed for some triangulation and comparability of the accounts given. Secondly, the longitudinal nature of the research, through avoiding the dangers of single visit, ‘snapshot’ studies (Pettigrew, 1987), provided a further way in which the accounts provided by individual personnel could be cross-checked. Both of these factors therefore limited the extent to which any individual was able to exaggerate the extent of their role. 3.1. Swed-truck In Swed-truck, the IS/IT department was responsible for the ERP project examined, which had had some previous experience attempting to implement common business systems. The evaluation process which was undertaken to identify a software system,

and consultancy company was extremely detailed, and was managed with a incredible rigour. The evaluation process initially identified four potential companies and systems, with this list eventually being reduced to two main candidates. The evaluation of these two remaining companies took 2 months to undertake and involved both consultants having to give detailed presentations, with Swed-truck staff making visits to a number of their reference customers, and with business scenarios being run on test systems. Ultimately, the two systems were evaluated against a list of over 60 different functional and business requirements. The results of this evaluation were then submitted to Swed-truck’s board for final approval to be given to one of the consultants. There were a number of reasons why such a detailed evaluation process had been undertaken. The ERP project was seen as being a key part of Swed-truck’s long term reorganisation process, and the ERP project was therefore extremely important. Secondly, it was recognised that none of the commercially available systems would adequately meet the needs of Swed-truck. Therefore, it was known that it would be necessary to select a consultancy company which was prepared to invest time to develop new modules. However, one of the main reasons that Swed-truck’s IS/IT department undertook such a detailed evaluation was due to their experiences with a failed, previous attempt to implement a common business information system. It was apparent from most of the Swed-truck staff interviewed that this failed implementation had significantly shaped their attitudes towards the ERP evaluation process. One of the main lessons that appeared to emerge from this previous experience was the importance of ensuring that adequate planning was done to accurately gauge the amount of development work required, and to ensure that the consultancy company used was fully committed to investing all necessary effort. Thus, Swed-truck’s decision to use Intentia’s Movex system, was significantly shaped by Intentia’s commitment to undertake all necessary development work. Swed-truck’s ERP project team was extremely active in defining the terms of their consultancy relationship, and the way their ERP project was managed. As with the rigour of the evaluation process they undertook, this was partly the result of a desire to learn from the previous failed project through

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Table 2 Customisation typologya No. 1 2 3 4 5 6 7 8 9 10

Type of customisation

Description

Configuration

Setting of parameters (or tables) in order to choose between different executions of processes and functions in the software package Implementation of third party software designed to work with the ERP system Creation of new screen masks for input and output of data Programming of extended data output and reporting options Creation of non-standard workflows Programming of additional software code in an open interface Programming of additional applications without changing the source code Programming of interfaces to legacy systems of third party products Changing the source codes ranging from small changes to changing whole modules Development and production of completely new modules with different functionality not available in existing modules

Bolt-on’s Screen masks Extended reporting Workflow programming User exits ERP programming Interface development Package code modification Develop new modules

a This table is developed from a table presented by Brehm et al. (2001). The main difference is the addition of an extra level of customisation (the last level), which represents a more extensive form of customisation than Brehm et al. referred to.

codifying and concretising the roles and responsibilities of both parties. In the end, a long term partnering arrangement was agreed, whereby Intentia would develop the two extra modules that Swed-truck wanted, while Swed-truck would help in their development, and then consequently act as a key reference customer for Intentia in the future. The methodology adopted to develop the two new modules was negotiated jointly between Swed-truck and Intentia, with Intentia’s standard implementation methodology being adapted to meet Swed-truck’s needs and demands. One of the main effects of these consultancy relations on Swed-truck’s ERP system, was that Swed-truck project staff were able to retain control over key decisions regarding how it was redesigned and customised. The careful and detailed advance planning that had been undertaken also gave the Swed-truck project team a relatively clear picture of what the organisational requirements from their system were. The combination of these two elements allowed them to have the system significantly customised to their specifications, which resulted in the system they finally implemented being significantly different from the standardised, generic system that the consultants began with. The system that Swed-truck got was one that was therefore carefully customised to their articulated organisational needs. Table 2 outlines a customisation typology (taken from Brehm et al., 2001) in which the degree of customisation increases generally from top to bottom. The degree of customisation undertaken by Swed-truck

was such that it can be said to be ‘10’ on this scale. 3 3.2. UK-cast Similar to Swed-truck, UK-cast also undertook a detailed and costly evaluation processes, however, a number of factors acted to limit and constrain the range and type of companies evaluated. From an early stage there was a strong commitment to use one particular type of ERP system (SAP). This was both because it had been implemented in another division of the corporation that UK-cast was a part of, and also because one of the key stakeholders, UK-cast’s European Managing Director, became strongly committed to using it. Because of this preference, it was acknowledged by those interviewed that the evaluation process was limited to organisations which could help with the implementation of SAP, rather than evaluating other potential ERP systems. Another way in which the evaluation process was constrained was through the absence of any of the major international consultancies, who were explicitly, and deliberately not asked to bid for the work. The same reasons for this exclusion were made by a number of interviewees—there was a general 3 One of the types of customisation, which does not fit neatly in this ordered hierarchy, is number 8, interface development with legacy systems. This is because, to some extent, all ERP implementations will involve an element of interface development with legacy systems.

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mistrust/dislike of the ‘big 6’ consultants as they were argued to encourage/sell large scale BRP solutions, and were also extremely expensive. However, these opinions were not based on any direct experiences that the UK-cast staff interviewed had had with these consultants. There was no identifiable or specific root to these attitudes. Instead, they appeared to be part of the general culture within UK-cast, which in this respect can be characterised as being primarily constituted by a generally high level of cost consciousness, which created a general reluctance to invest large sums of money on restructuring projects. Once UK-cast had made a decision over the consultant to be used, the consultant was granted a significant degree of power and influence over the implementation methodology to be used, but typically major decisions were made jointly by negotiation between UK-cast’s project manager and representatives from the consultants. Therefore, while the consultant selected had developed a relatively standardised implementation methodology that was utilised with all its clients, in the case of UK-cast they adopted a greater degree of flexibility than usual. As a result of this joint decision making process, and the relatively equal control that UK-cast and the consultants had, the ERP system to be implemented, and the organisational context were modified and changed in relatively equal measures. In approximate terms the degree of customisation made to the ERP system they implemented was approximately ‘5’ using the typology in Table 2. 4 3.3. UK-pharm In contrast to the above examples, UK-pharm did not undertake any significant evaluation of a range of potential consultants, and instead utilised consultants/equipment providers that were known to key stakeholders in the projects. For example, the ERP project team in UK-pharm used a number of consultants at different stages throughout the project, all of which were selected partly on the basis of being established contacts. One local consultant who was used informally, became involved at a number of discrete stages. The reason that this particular consultant was used was because he was someone who was very fa4 There was also a need for the development of some interfaces with legacy systems, which represents ‘8’ on the typology.

miliar with UK-pharm, and the project team, through his involvement in previous change projects. He was seen as someone who could be trusted, who knew the company and whose opinion was valued. UK-pharm also used consultants at a later stage of the project to help provide a detailed functional evaluation of UK-pharm’s needs from an ERP system, and to evaluate potential systems against this requirement. However, no effective, widespread evaluation was made of a range of possible consultants at this stage either. Instead, based on the recommendations of one of UK-pharm’s American managers, a consultancy which had been involved previously with UK-pharm’s American business, was approached and used. UK-pharm was equally as active as Swed-truck in shaping the nature of their consultancy relationships, but with preferences for a different type of relationship. In UK-pharm, the consultants used had relatively low profile, discrete roles, which were narrowly defined, being used to ‘sanity check’ ideas, and to ‘bounce ideas off ’. The sense of this role in the project can be gained from the following quote from the project leader I do actually use consultants quite a lot to say just let me run this by you. Does this make sense? (and), Tell me Sherlock is this what the evidence says or this just what I would like the evidence to say? This type of constrained consultancy role was partly a result of the culture within UK-pharm with regard to the use of consultants, where their widescale use was frowned upon. This attitude was argued to have permeated down from UK-pharm’s MD, who discouraged over-spending on consultants. Their constrained roles was also the result of the project leaders preferences, attitudes and experiences, which had been developed over time, through involvement in a number of previous innovation projects. These experiences had shaped her opinions quite significantly. For example, she suggested that I believe very strongly that ownership has to reside with the company. Unless the project management, the program management, the directions, strategy, etc. comes from the company then it would not actually last. I also believe that the only way you really get the knowledge transfer out of the consultants is

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for them to really work for us rather than anything else. . . . I have seen how badly wrong it goes when you let it happen the other way. The effect of these consultancy relations on UK-pharm’s ERP system were similar to the case of Swed-truck. Primarily, the limited and constrained role given to consultants by the UK-pharm project team allowed them to retain control over key decisions, in an attempt to ensure that the system they implemented would meet their organisational needs. This was driven by a concern that giving too much power to the consultant could potentially result in the organisation having to be adapted more to suit the system preferred by the consultant, rather than the system being selected to suit the needs of the organisation. This concern was one of the primary factors in their decision not to commit to any particular ERP system until a detailed evaluation of their organisational needs had been established. When the research with UK-pharm was finished (which was before their implementation had been completed), the indications were that the degree of customisation made to the ERP system they were implementing would be equivalent to an ‘8’ using the typology in Table 2. 3.4. France-connect France-connect provides an even more extreme example than UK-pharm of how decisions regarding consultants were made without the effective evaluation of a range of options, with key stakeholders effectively deciding on the consultants to be used, largely on the basis of their own preferences. In France-connect the decision on which consultant was used was largely shaped by the opinion of the pilot site’s Managing Director, who had a high profile role in the project, a forceful personality, and quite particular opinions concerning consultants. The pilot site’s MD had been imbued with a significant amount of authority to manage the project as he saw fit, because he had been recruited to France-connect specifically to act as a change agent. From his previous work the pilot site’s MD had been involved in a similar type of project, and from this had developed strong positive feelings towards the ideas of one particular consultancy/education company, Oliver Wight. For example, when asked why he favoured this company he replied

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I do not see any way to work now, whatever it is the industry is, without such a business process’ (and), do you see there was another way to work? I do not see it. This decision was reinforced by a recommendation for the same company one of the senior project team members received from a known and trusted colleague (from outside of France-connect). No detailed evaluation of a range of potential consultants was conducted, and following conversations with, and site visits from one of the consultant’s staff, a decision was made to use them. In France-connect’s project yet another type of consultancy relationship was developed, with the consultants being given a high level strategic role shaping the general project methods adopted. However, to a significant extent, this consultancy role was a consequence of Oliver Wight’s preferred implementation methodology, which is relatively standardised, encouraging implementers to follow their ‘proven path’ (Swan et al., 1999, p. 916; Wilson et al., 1994, p. 222). This implementation methodology placed the day to day responsibility for managing the implementation in the hands of local management, with the consultants making regular visits to check progress, and make recommendations over actions to be taken and prioritised. As outlined, while France-connect used recruitment methods similar to UK-pharm, it then went on to develop an extremely different type of relation with the consultants that were selected, with France-connect opting to give the consultant they selected significant levels of power and autonomy over their ERP implementation. The main effect of this type of consultancy relationship on the ERP system that France-connect implemented, was that whereas in the case of UK-pharm, and Swed-truck, where efforts were made to ensure that the systems were significantly customised to the needs of the organisation, in the case of France-connect, the opposite occurred. The rigid methods, tools and systems that their Oliver Wight consultant used resulted in France-connect having to significantly modify and restructure their organisation to meet the needs of the system that the consultant used. The level of organisational modifications undertaken by France-connect were on such a scale, that it would not be going too far to say that had to undergo a substantial transformation.

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Table 3 Consultancy relations and character of change Company

Consultancy role

Character of change

Swed-bank UK-cast

Partnership Client retains major control over key decisions Consultant granted significant power over implementation process

UK-pharm

Consultants’ level of power and influence limited and constrained

France-connect

Consultant granted extensive power over implementation process

Significant customisation of ERP system Less significant organisational change Some customisation of both organisational context and ERP system Significant customisation of ERP system Less significant organisational change Massive organisational change Limited modification to ERP system

In contrast, relatively more limited changes were made to the ERP system they implemented (approximately ‘3’ using the typology in Table 2). The case of France-connect is therefore the closest of the four cases examined to the type of client–consultant relations being critiqued in the paper, i.e. where the client is relatively passive, and where the consultant plays the dominant role. However, even in this case, the client still played a significant and active role in the negotiation of the consultant’s role. It could be argued that the consultants had an extensive role primarily because the client was happy for them to do so. Thus, even though the client ceded significant levels of control for the project to the consultant, account still needs to be taken off the clients perspective in order to fully understand the choices and decisions that were made. In conclusion therefore, while all four case companies were implementing similar technological innovations, the way consultants were selected, and the nature of the consultancy relationship utilised varied significantly (see Table 3). In each case, these decisions were shaped by both the pre-existing social networks of relevant individuals, as well as the cultures of the organisations. The different consultancy relations developed were also shown to have significantly influence the innovations being adopted, with the extent to which the systems were customised, and the degree of organisational redesign varying significantly.

4. Analysis: embedded relations and their impact on innovation processes The analysis of these findings is structured into three main sections. The first two sections consider

the two focal questions outlined previously, while the third section reflects on the implications of the data presented for management practice, with regard to the implementation of ERP systems. 4.1. The active and embedded nature of client behaviour The empirical stories presented illustrate not only the active role of the client company in shaping their consultancy relations (Fincham, 1999; Sturdy, 1998), but also go substantially beyond this to illustrate the way in which the behaviour of client personnel, in relation to the consultants they used, was shaped by the embeddedness of their social relations. The data presented therefore suggests that the use of Granovetter’s embeddedness concept can provide important insights into the patterns of client behaviour that were described. For example, the evidence presented supports Granovetter’s basic insight that, ‘most behaviour is closely embedded in networks of interpersonal relations. . . ’ (Granovetter, 1985, p. 504), as the different ways in which each of the case companies selected, and worked with the consultants they used was partly the result of the different social relations, and histories of the relevant organisational actors. Granovetter’s argument challenged the assumptions of traditional economic theory about the character of economic relations, which under-emphasise, or ignore the socially embedded character of economic relations. Two important elements to Granovetter’s concept of socially embedded economic relations are that firstly, while arms length, market relations are narrowly concerned with economic issues, embedded relations have broader socio-economic concerns

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(Uzzi, 1997). Thus, the achievement of precise equity in every exchange is relatively unimportant in embedded relations. Secondly, there is assumed to be no repeatability to market relations, while embedded relations involve an element of repeatability (Granovetter, 1985, p. 496). Both of these elements were found to exist in the client–consultancy relations developed. Further, the behaviour of project staff from the client organisations was embedded not only within pre-existing networks of social relations, but also within their prevailing organisational cultures. The paper presented innumerable examples of the way the pre-existing social, network relations of client staff shaped the consultancy relations they developed. For example, in Swed-truck the consultant selected for their BPR project was previously known to the company. All the consultants and training companies used by UK-pharm were selected partly on the basis of either their previous direct relations with the project team, or on the basis of recommendations from known colleagues. In France-connect, the selection of the consultant was a decision shaped both by the past experiences of the MD, and on the basis of a recommendation from a known colleague. Thus, crucial decisions about which consultants to use were partly shaped by the pre-existing social relations of the client staff who were responsible for making the decisions. These findings are reinforced by McGivern (1983), Fincham (1999) and Newton (1996), who found similar patterns of behaviour. The use of such pre-existing social relations to shape decisions, rather than relying on the use of totally arms length, market type relations was closely related by Granovetter to the issue of trust. Fundamentally, the use of recommended contacts, or previous acquaintances is an attempt to overcome the problem of reliance on ideas of ‘generalised morality’, and the dependence on non-specific reputations which is necessary when dealing with new, unknown acquaintances (Granovetter, 1985, p. 490). The episodic nature of innovation processes means that project teams formed to manage specific innovation projects have similarities with the type of temporary group and team work that appear to become an increasing part of organisational life (DeFillippi and Arthur, 1998; Jarvenpaa and Leidner, 1999). For example, the project teams described here all had

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a finite life span, were task/objective focused, and their success depended on a significant element of co-ordination between members of the project team— three of the criterion Meyerson et al. (1996) used to define temporary work groups. The analysis of this type of work group also emphasises the importance of trust, and the difficulty involved in the establishment of trust in such short term, and temporary relations. Conventionally, the development of trust is conceived as requiring the development of shared norms, common experiences, and some experience of promise fulfillment, which usually requires time to occur (Mayer et al., 1995; Meyerson et al., 1996; Jarvenpaa and Leidner, 1999). However, in the type of temporary work groups that the project teams examined typify, opportunities for the development of trust in this way were limited. Meyerson et al. (1996) suggest that where there is not the ‘luxury’ of time to allow the development of ‘conventional’ forms of trust, such as when temporary groups have to work within narrow time constraints, a form of trust called ‘swift trust’ can develop. At the start of work relations in temporary groups swift trust is something that is inferred based on limited information (Meyerson et al., 1996, pp. 191–192), and which requires to be conferred presumptively (Meyerson et al., 1996, p. 170). Swift trust therefore represents a way of dealing with the inherent uncertainties of temporary project work. It is suggested here, however, that the use of embedded social relations represents an attempt on the part of client personnel to reduce their dependence on such precarious forms of trust. The use of socially embedded network relations can thus be explained as providing a way of attempting to reduce uncertainty, and the need to trust previously unknown organisations/individuals. The use of embedded relations, where there is some history of shared experiences and where there are experiences of promise and expectation fulfillment, can be seen as attempting to develop relations based upon conventionally developed trust. Fincham made similar conclusions by arguing that the use of known or recommended contacts was concerned with attempting to reduce uncertainty through reliance upon ‘reputational knowledge’ (Fincham, 1999, p. 345). The use of embedded social networks may therefore be concerned with the client organisations studied

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attempting to reduce their levels of risk and uncertainty through developing consultancy relations based on an element of pre-established trust. Another way in which the client behaviour described could be seen to be embedded, was within the cultures of their own organisations. This supports Sturdy’s conclusion that client behaviour is related to and shaped by the institutional context of their organisations (Sturdy, 1997a, p. 513), or what Swan et al. (1999) referred to ‘prevailing as organisational practices’. One of the best examples of this form of embeddedness was provided by UK-cast, and was related to the general suspicion of the large, international consultants. This culture significantly shaped UK-cast’s selection and recruitment process, as the large international consultancies were deliberately excluded from bidding for their project. Another relevant example is provided by Swed-truck. As outlined, an important element of Swed-truck’s culture was shaped by the problems experienced by a failed similar initiative in the recent past. This failed project had resulted in the development of a culture which emphasised the importance of careful, and detailed planning. Thus, the amount of attention that Swed-truck gave to the evaluation and selection process was significantly shaped by these cultural values. The final example of organisational–cultural embeddedness is illustrated by UK-pharm. Here an important element of the prevailing culture involved a general mistrust of all consultants, and a general concern over the problems related to giving consultants too much control and influence. These values appeared to have a significant influence on the ERP project examined, as they were important in influencing the tightly constrained, and narrowly defined role and responsibilities given to consultants in the project. These attitudes, values and behaviours appear to be related to the prevailing organisational cultures, as they were relatively independent of the direct, personal experiences of the project staff in all three companies. In all three of the examples illustrated above, these attitudes were espoused quite consistently by the different project team members interviewed, irrespective of whether or not they had personally experienced the examples and episodes that they used to explain and justify their opinions. Thus, one of the main ways these cultural values appeared to circulate through these organisations was in the form of stories/myths. Thus,

stories about consultants appear to be a visible manifestation of the cultural values towards consultants in these organisations. These values diffuse through processes of socialisation, and can significantly shape the attitudes, values and behaviour of organisational staff. Thus, this reinforces the idea that stories in organisations can act as important repositories of knowledge, and represent a form of encultured knowledge (Blacker, 1995; Brown and Duguid, 1991; Orr, 1990). 4.2. The impact of the client role on the innovations being appropriated The appropriation of complex, technological innovations has been shown to involve the mutual adaptation of both the technological systems being implemented, and the organisational context into which they are being introduced (Clark and Staunton, 1989; Scarbrough and Corbett, 1992). This perspective is supported by other writing which suggests that the organisation–technology relationship is highly recursive and interactive (Newell et al., 2000; Orlikowski, 1992). While the research data presented here reinforces and supports this general perspective, the extent to which both the organisational context, and the technological systems being implemented were customised, varied quite significantly. For example, in France-connect, substantially greater modifications and changes were made to the organisational context than to the ERP system being implemented. Thus, while the operating practices and procedures utilised were significantly transformed to be compatible with the demands of the ERP systems being implemented, the ERP system itself did not undergo the same scale of customisation. However, in the case of both Swed-truck, and UK-pharm, the opposite appeared to happen. In these cases the ERP systems being implemented were subject to a substantially greater degree of customisation, than the organisational contexts within which they were being introduced. Thus, while in France-connect a relatively standardised and generic system was implemented, in Swed-truck and UK-pharm efforts were made to ensure a significantly greater level of customisation was made to the ERP systems being implemented (see Table 3). One of the most obvious and striking differences between the cases was the roles granted to the

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consultants. France-connect granted the consultants they used a significant degree of power and autonomy over the implementation projects. In stark contrast to this, in the case of Swed-truck, and UK-pharm, the consultants used had significantly more constrained roles, with the client project teams in both cases retaining the largest element of control over key, strategic decisions. The case study based nature of this research means that it is impossible to make broad conclusions about the general nature of innovations processes. However, this research seems to tentatively indicate that the level of power granted to consultants may significantly influence the extent to which new technological systems are customised. More specifically, the case study data presented here indicates that the higher the level of power and autonomy granted to consultants during the innovation processes examined the more likely that the scale of customisation to the ERP systems would be lower than the extent to which the organisational context was changed. Conversely, in those cases where the role of the consultants were more constrained and limited the ERP systems being implemented were subject to a greater degree of modification than the organisational context (see Table 4). The tentative findings are supported by Swan et al. (1999) in a survey of over 1300 organisations which implemented similar systems (1000 UK based, and over 300 from Sweden). This research found that in general, Swedish implementations, where the use of consultants was significantly more limited than in the UK, involved a greater degree of customisation to the software systems being implemented than occurred in the UK. However, greater research is required in this area before such conclusions can be generalised. 4.3. Implications for management practice This final section of the analysis considers the implications of the research data for management practice Table 4 Consultancy role and type of customisation Degree of customisation

Organisational context Technological innovation

Level of consultants power/ autonomy in appropriation process High

Low

High Low

Low High

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in relation to the implementation of ERP systems, or other comparable technological innovations. Specifically, it considers the practical conclusions which can be drawn regarding the type of consultancy relation, or the extent of organisational/software customisation which may increase the likelihood of such projects being successful. Firstly however, the difficulties, and limitations of making such conclusions are considered. Establishing the degree of success of ERP implementation projects, or any technological change projects, is complicated by the difficulty in establishing objective and agreed definitions of what constitutes success (Markus et al., 2000; Wilson et al., 1994). Even apparently straightforward measures such as ‘the achievement of goals/objectives’ become complicated by the fact that goals and objectives are likely to change over time, because as people’s understanding of systems change, so their expectations of achievable goals evolve (Adam and O’Doherty, 2000). Thus, whether projects are deemed successful will depend not only on what measure of success is used, but also, when it is used (Markus et al., 2000). Another difficulty in relating either the nature of the consultancy role, or the degree of system customisation to the success of technological change projects is the diversity of factors which all contribute to the success of such projects. For example, the extent to which systems are accepted/resisted by organisational staff, the level of senior management support, the amount of advance planning, the adequacy of training provision, are all factors which contribute to the extent to which technological change projects succeed or fail (Markus et al., 2000; Wilson et al., 1994). Thus, separating out the effect of the consultant–client relationship, or the degree of software customisation on the outcomes of the projects is difficult to do. Having said this, a number of general conclusions can be drawn from the data presented. Primarily, all four case studies illustrated the constant and inescapable nature of the dilemma over whether to customise ERP software, or the extent to which it should be customised. This is the standard dilemma for all technological change projects: use an off-the-shelf ‘standard’ solution, or adapt a system to the specific needs of the organisation. The data presented suggests that some degree of customisation will always be necessary to the technological systems being implemented. In all four cases some degree of ERP system

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customisation was undertaken, even in the case of France-conect, where this was attempted to be kept to a minimum. This reinforces the perspective of Swan et al. (1999) who suggest that there is no such thing as a ‘one size fits all’ system/solution, for any organisation. Further, Swan et al.’s (1999) data, which as outlined earlier involved a survey of over 1300 organisations, suggested that the likelihood of success was greater where attempts were made to customise ERP systems to meet organisational needs. Brehm et al. (2001), and Markus et al. (2000) also suggest that ‘many’ (most?) ERP implementations are likely to require some degree of ERP system customisation. However, a number of articles make explicit the potentially significant problems and risks associated with customising such systems. Wilson et al. (1994), and Markus et al. (2000), suggest that getting such changes working successfully and reliably can be extremely difficult. Further, the greater the level of customisation to ERP systems that is made, the greater the risks and problems associated with being able to maintain and upgrade such systems in the long term (Brehm et al., 2001). Ultimately, customisation is likely to be a double edged sword. The benefit of customisation is that it is likely to help modify systems to ensure compatibility with existing organisational structures and cultures, which may improve the likelihood of success during the initial implementation process. The potential disadvantage is that customisation may significantly complicate the process of system maintenance, or the implementation of further system upgrades. Overall therefore, the empirical data presented confirms the importance of the customisation issue to ERP projects, and suggests that the client–consultant relationship may play an important role in determining the degree of system, and organisational customisation which occurs.

5. Conclusions According to the ‘fashion’ perspective it is acknowledged that fashions are not simply pushed onto gullible managers (Abrahamson, 1996). Rather, managers are seen as actively looking for new techniques that can help them respond to real performance gaps opened up by technical and environmental changes.

However, while the fashion perspective highlights the active role of users, in this early stage of the consultancy relationship, it does not elaborate on the nature of the client–consultant relationship and how this influences the role of consultants in the innovation process. Moreover, as was shown, much of the literature on the role of consultants tends to under-emphasise the ways in which the client organisation shapes this relationship. This paper attempted to address this neglect through examining the important role that client organisations can play in the development of their consultancy relations. However, before concluding on the main findings of the paper it is necessary to begin with a caveat. Primarily, the case study based nature of the evidence presented limits the generalisability of the conclusions that can be made. Therefore, further research is required to strengthen and develop the findings presented. The empirical data presented supports the perspective articulated most clearly by Sturdy (1997a,b, 1998) and Fincham (1999) about the importance of taking account of the role of client firms in shaping their consultancy relations. However, one of the most striking characteristics of the data presented was the broad range of client behaviours and attitudes found, both in relation to the recruitment methods utilised and the type of consultancy relations developed. Thus, the empirical data illustrated a diversity of ways in which the attitudes, perceptions and behaviour of staff from the client organisations shaped the nature of their consultancy relations. While this paper has concentrated on emphasising the role of client firms, it is not suggested that clients play a more active role than consultants in the constitution of their relationship. For example, there is a wide range of published writing which has shown how influential consultants can be in shaping their client relations (Clark, 1995; Schuyt and Schuijt, 1998). Instead, as with Sturdy, and Fincham, it is suggested that the development of client–consultancy relations requires to be viewed as an interactive process, and are mutually constituted, with both partners playing an equally important role. The relatively single-minded focus on the client role in this paper is intended simply to increase awareness of the dangers of neglecting their role, through emphasising the different ways in which their behaviour importantly shaped their consultancy relations.

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In order to explain the diversity of client behaviours found, Granovetter’s embeddedness concept was mobilised (Granovetter, 1985), as this usefully takes account of the socially embedded nature of economic action. Thus, the character of the client behaviours found was related to the different social networks, and organisational cultures that client staff were embedded within. For example, the extensive evaluation practices that characterised Swed-truck’s recruitment procedures were related to a culture of caution and careful planning that had developed as a consequence of a previously failed implementation project. Further, a number of different examples were also given, from all four case companies, of the ways in which consultant recruitment practices were shaped by the social networks that client staff were a part of. These findings therefore suggest that those accounts of client–consultant relations which focus solely on the role of consultants provide only a limited and partial explanation for the character of these relations. These relations were embedded in, and emerged from pre-existing networks and cultural understandings, but continued to evolve in a dynamic way over the period of the project. However, while the behaviour of client staff was shaped by it is embeddedness in a specific context it is not suggested that this rigidly determined their behaviour, the nature of client–consultant relations, or the character of the innovations. The second main theme examined in the paper was how the nature of the client–consultancy relations that were utilised shaped the character of the innovation processed being examined. While there is a significant consensus that the implementation of technological innovations involves the mutual adaptation of both the technological system being implemented, and the organisational context in which it is introduced, the findings presented here go beyond this somewhat general conclusion. Across the four case companies examined there was a significant variety in the extent to which the ERP systems were customised and also the degree to which the organisational contexts were changed. These differences appeared to be related to the level of power and autonomy granted to the consultants. When the consultants had a significant level of autonomy, as in the case of France-connect, the organisational context was modified substantially more than the ERP systems being implemented. However, these findings are extremely tentative, and require to

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be further investigated. What these findings do suggest is that important insights can be made into the nature of technology implementation processes through going beyond the general finding that they involve the mutual adaptation of technology and organisation. More broadly, the embedded client–consultant relationships observed in these cases could be argued to reflect how innovation processes are becoming increasingly interactive, requiring the simultaneous involvement of multiple communities, sometimes on a global scale. This is especially the case when the information systems being implemented are international in scale, as with the type of innovations examined. The involvement of multiple actors means that there needs to be considerable negotiation among these different communities, which may have distinctive norms, cultural values and interests in the innovation process (Scarbrough and Corbett, 1992; Spender, 1989). Knowledge needed for innovation is therefore increasingly distributed both within organisations (e.g. across functions and geographically dislocated business units) and across organisations (e.g. consultants and user firms). This poses new challenges in terms of creating, sharing and managing the knowledge and expertise needed for innovation. This is because the communication of tacit knowledge requires some shared system of meaning so that it can be understood and applied (Boland and Tenkasi, 1995; Nonaka, 1994). Interactive innovation, however, involves disparate social communities, which can have very different systems of meaning. Relying on embedded client–consultant relations, at least to some extent, appears to provide a way of lessening the difficulties of the knowledge sharing that is required in such interactive innovation processes.

Acknowledgements I would like to acknowledge the input and support of Harry Scarbrough, Jacky Swan and Sue Newell, who all provided useful comments in the development of the paper. This paper is based on data collected as part of the ESRC funded project ‘Knowledge Articulation and Utilisation: Networks and the Creation of Expertise’, which had Harry, Jacky, Sue as the principal investigators. Thanks also to the two anonymous reviewers who provided helpful comments.

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