Business Process Modelling as an Element of Knowledge Management - A Model Theory Approach

The increasing importance of Business Process Modelling and Knowledge Management within economic reality as well as their common epistemological problem are good reasons to look for an integrative approach to both disciplines. The widely recognized lack of epistemological foundation in information systems research also applies to Business Process Modelling and Knowledge Management, thus making this effort more difficult. An analysis of current works shows that most authors, consciously or otherwise, take a positivistic view when talking about models, knowledge, processes and the like. Bound to this view is a naïve ontological and epistemological realism that leads to a mapping-oriented understanding of the terms “model” and “knowledge”. This position is currently under increasing criticism, as it does not take subjective aspects of cognition into consideration. In more recent literature, an increasing number of authors take alternative positions, predominantly a radical-constructivistic point of view. As critics of both positivistic as well as radical-constructivistic positions, our starting point is a conception of a socio-pragmatic-constructivistic approach that takes the subjective aspects and their social contextualization into consideration. Knowledge and model are no longer objective circumstances, but constantly changing results of subjective, socialized interaction. Thus, Knowledge Management and Business Process Modelling should not be focused on representatives or representations of knowledge or models, but on human societies. These have the permanent task of communication about models (and their use) and approximation and optimization of their corresponding worlds of meaning (Sinnwelten) within common practice. WYSSUSEK, B., SCHWARTZ, M., KREMBERG, B., BAIER, F., KRALLMANN, H. 2 1 Introductory Background The increasing relevance of knowledge for the economic success of an enterprise is widely recognized nowadays. As early as 1776 in his work “Inquiry into the nature and the causes of the wealth of nations”, ADAM SMITH identified knowledge as a cause for technological progress: 1) inventions and improvement by the workmen who use machines, 2) improvement by the specialized makers of machines and 3) improvements made by “those who are called philosophers or men of speculation, whose trade it is not to do anything, but to observe everything; and who upon that account are often capable of combining together the powers of the most distant and dissimilar objects” [SMITH 1776, BOULDING 1959]. CHURCH and ALFORD state the systematic use of experience as one of their three “principles of management” and define experience as knowledge of passed achievements, which includes “know what” as well as “know how” [CHURCH and ALFORD 1912]. In economics, VON HAYEK in particular initiated the discussion on the role of knowledge [VON HAYEK 1937]. In the section “Knowledge is the business” of his book “Managing for results” DRUCKER supplies an analysis of the influence of knowledge on the success of organisations, proving that the success of basically similar organisations within an industry is different due to different knowledge within the organisations. Economic results are the results of differentiation. The source of this specific differentiation, and with it of business survival and growth, is a specific, distinct knowledge possessed by a group of people in the business. But while there is always at least one such knowledge area in every successful business, no two businesses are alike in their distinct knowledge [DRUCKER 1964]. In social sciences, the work of BOULDING contributed greatly to the discussion regarding knowledge in human society [BOULDING 1964, 1966, 1970]. BERGERs and LUCKMANNs basic knowledge-sociological approach in “The social construction of reality” is also important [BERGER and LUCKMANN 1966 ] because of its parallels to epistemological constructivism. Despite this historic background, it took quite some time for the topic “knowledge” to attain an outstanding role in the agenda of research and practice in business administration. This finally occurred with the advent of concepts such as Learning Organisation [ARGYRIS and SCHÖN 1978, SENGE 1990] and Knowledge Management [SVEIBY and LLOYD 1987, DRUCKER 1988, NONAKA 1991]. Knowledge in both the epistemological and sociological sense must be regarded as a constituent for human existence. Thus, it is not surprising that Knowledge Management has spread into many areas of scientific effort – be it as an object of research or as a means to an end. The idea of managing knowledge is closely tied to other approaches for strengthening the competitiveness of the organisation, such as Total Quality Management (TQM), Lean Management, Kaizen or Continuous Improvement and above all Business Process Reengineering (BPR). Different authors regard Knowledge Management as a supplement to Business Process Reengineering. The fact that John Wiley’s Journal “Business Change and Reengineering” was renamed as “Knowledge and Process Management” in March 1997 supports this thesis [BARCLAY and MURRAY 2000]. The approach of Business Process Reengineering expressed the importance of a process-oriented design of organisational structures (going away from resources efficiency with its local maximums, going towards process efficiency with a global optimum) [HAMMER and CHAMPY 1993]. But the original focus on the organisational (structural) and technical aspects neglected the human dimension. The knowledge dimension hardly played any role in the initial conception of BPR. In its course of development people found out that entrepreneurial success does not solely consist of the production and sale of products. In order to ensure the survival of a business in a dynamic environment, it is necessary for an organisation to be able to deal with large and mostly unpredictable changes. A single focus on the increased efficiency of the WYSSUSEK, B., SCHWARTZ, M., KREMBERG, B., BAIER, F., KRALLMANN, H. 3 services rendered can be strongly counter-productive if there is no space for creativity or learning for those involved in the execution of processes [LEVAS et al. 1995]. The meaning of knowledge in BPR is directly linked with creativity and learning, according to [SCARBROUGH 1996]. The various types of knowledge that play a role in BPR form a suitable starting point for re-connecting Knowledge Management and process orientation. In the context of BPR, the focus of interest has been on business processes. Business processes are considered as substantial structures ensuring business success, with their efficiency placed in the foreground. Consequently, a second look at Knowledge Management should be taken from the process point of view. Knowledge Management is a continuous process and its object is not only the distribution of knowledge resources in the enterprise, but also management of knowledge processes: Knowledge is generated, passed on, used and in turn contributes to its re-generation. If we regard the rendering of services within the organisation as a process or a sequence of functions performed on an object, then we should observe the influence of knowledge along with these business processes. Thereby, it is possible that knowledge processes run parallel to performance processes or alternate between them, thus forming a network structure. A function of Knowledge Management can be seen in the management of knowledge that is necessary for the execution of the processes and generated at the time of execution (in reference to these business processes). However this interpretation of process oriented Knowledge Management is not particularly new. Numerous IT projects executed in the context of BPR already had goals such as the improvement of communication, co-operation, co-ordination and the information supply on their respective process functions. At that time, the focus was on “information supply”, whereas today it is called “knowledge transfer”. DAVENPORT demonstrates a substantial weakness of today's approaches of Knowledge Management towards Process Management: It is simply not sufficient to collect and store processmonitoring data in databases, because data graveyards (which already exist in most organisations) would be the result. Process data is of course helpful when controlling Workflow Management Systems, but knowledge is not regarded at all in this way [DAVENPORT 1997]. By distributing reports, spreadsheets and the like, we still don’t take knowledge into consideration. The process has to be run in a knowledge(able) environment, a learning organisation. The coherence is evident: Knowledge cannot be generated without learning, which preferably takes place in some kind of community. Knowledge is based on experience, and is a result of realization. Only a (human) being is capable of such realization—there is no knowledge without a knower. In the case of process orientation, the concerns are process knowledge (knowledge about the process as such) and process-relevant knowledge (knowledge which, apart from the process knowledge, is necessary for the process performance). Further to the collection of process performance data, process modelling is a common method of “raising knowledge” about processes. In doing this, it is insignificant whether existing processes are modeled (modelling of the actual state) or processes which are yet to be implemented (modeling of a planned or future state). If all modelling takes place explicitly, this results in possibilities of a further use of the model representations. The term “explicit modelling” can already serve as a starting point for an analogy. In Knowledge Management, a differentiation is made between implicit and explicit knowledge [NONAKA and TAKEUCHI 1995]. Explicit knowledge is thereby understood as externalized knowledge. If we regard externalized knowledge as what it is, a knowledge representation, then the connection between explicit