Framing the effectiveness of the SCM development work

improve the effectiveness of development work. Development work can be categorized as knowledge work. Gregerman (1981) defines that the output of knowledge work is usually difficult to quantify, and the effectiveness of the work depends mainly on the approach selected by the knowledge worker. Because the

development work, especially in the area of SCM, is collaborative by nature, its effectiveness is an elusive concept. There is also some literature on the effectiveness and performance measurement of white-collar work in general, where the performance measurement can have three purposes (Takala et al., 2006):

- Administrative purposes: recruitment, promotion and motivation

- Improvement purposes: analysis on problems and target setting - Strategic purposes: seeking desired outputs contributing to the

overall goals of the organization.

In this context the effectiveness is seen as the performance measurement for strategic purposes. An expert carrying out development work can be considered effective when he/she promotes those development issues which give the highest value added for the effort of the whole organization. This composition is derived from the presumption that the utilization of expert knowledge increases both the quality of the implemented solution and the effectiveness of the development work. In other words, the presumption can be put so that we believe that the more the decision making and implementation are based on experts’ knowledge, the better they are. Obviously this kind of positivistic conception is quite far from professional reality, as the connection between the quality of input data and the quality of the decision is not at all straightforward and clear. However, it is arguable to take this presumption as a starting point for research purposes, simply because the dominant way of thinking of SCM experts stems from the positivistic conception of reality.

Development work is defined above as deliberate, systematic work carried out to bring out the capabilities or possibilities of the current resources of the organization and/or to bring the organization, a part of it, or a set of organizations to a more advanced or effective state. It can be thought to consist of a set of development processes, carried out by an expert usually together with the rest of the organization.

Through development processes the expert knowledge is diffused to the organization for example as new ways of working. Seeing the development work in the context of surrounding environment of the expertise, the effectiveness of development work can be reduced to the effectiveness of the solutions or plans. Looking at the problem from the viewpoint of a problem, dimensions of the effectiveness of development processes can be expressed as:

1. Technical performanceof the developed suggestion 2. Consumption of resources of the development process

Being an SCM issue in this study, technical performance includes both the technical and economical performance of the solution. Consumption of resources includes expenditure of money, work, time, starting from analysis to the last steps of implementation both from the expert and the implementing organization. Both these dimensions aggregate a multitude of variables, not necessarily easy to distinguish or measure. As a simple example of the model, figure 2 shows two suggestions for development processes. In the figure suggestion A is technically and economically superior compared to suggestion B. However, the technically and economically superior suggestion requires more resources. The reasons for this can be numerous:

the planning phase requires more skills and work, the decision making phase is time-consuming because of its wider implications to the organization, and the implementation stage may be difficult because of deeper changes to current working practices and skills requirements.

Technical performance

Consumption of resources Suggestion A

Suggestion B

Figure 2 - An illustration of the dimensions of the effectiveness of the development process

It is obvious that aggregate measures make it difficult to position actual suggestions or potential development processes in the frame. Reflecting the perception that decision making is in many cases seeking for satisfying rather than optimal solutions (March, 1994), the illustration gives an adequate principle how the development initiatives are actually evaluated. It should also be noted that an essential managerial decision is to allocate the development resources between development processes. The allocation can be more or less transparent, ranging from joint agreement of a development project portfolio to heuristic evaluation processes of single suggestions inside individual managers’ heads.

From the viewpoint of an expert, the field can be seen as a battlefield of competing development suggestions. SCM development suggestions compete with each other and against other suggestions potentially utilizing the same resources. Basically, a sound, well communicated strategy should inhibit this kind of thinking, but it seems that in big companies this viewpoint can very concretely guide the expert work. In practice it is seldom possible to derive all the development issues from the strategy, for at least two reasons. Firstly, the origin of the development issues lies in operative problems and analyses of operative work and processes. Secondly, the development issues can stretch beyond the strategy period or they are potential building blocks of a new or revised strategy. In that sense there is plenty of room for an SCM expert to guide the development by suggestions.