Research on Enterprise Knowledge Management system to Improve Competitive Advantages for Small and Medium Enterprises in Vietnam

or Enterprise Knowledge Management System. - Building the influence model of Enterprise Knowledge Management System to Competitive Advantage in the SME’s. 3 3. Subjects and Scope research 3.1. Subjects Research Knowledge Management Business system to Competitive Advantage in the SME’s Vietnam 3.2. Scope Research Spatial area of interest: The paper researches the SME’s in Vietnam Temporal area of interest: Data from 2015 to 2016 Content of interest: The thesis investigates the realities, constitutes and the impact of Knowledge management system to Competitive Advantage in companies. 4. Methodology - Collecting Qualitative Data (qualitative – interview, quantitative or combined) I will randomly select companies such as state enterprises, private company, joint venture, Foreign-Invested Enterprise in Vietnam and conduct a survey using two methods: interview and questionnaires. - Collecting Data + The interview method (personal Interview) is a face to face communication between the researchers and the respondents e.g staffs, directors and partners of the companies. + Questionnaire: The present study will use some questions as the questionnaires to find the information related to the researches. If the geographic is far away to use the interview method, researcher will use online interview. + Analyzing data: Using SEM – Structural Equation Modeling to test the estimates, exploratory factor analysis and suitability model. + Analyze or Design System: using the Enterprise Architecture structure. 4 5. Structure My thesis is divided into four chapters: Chapter 1: The issues between the Knowledge Management and Competitive Advantage in SME’s in Vietnam Chapter 2: The Knowledge Management System in SME’s in Vietnam Chapter 3: Design Enterprise Architecture for Knowledge Management System in SME’s in Vietnam Chapter 4: The Knowledge Management System Model to make competitive advantages for SME’s in Vietnam. 6. New Contributions on the thesis New contributions in term of academic literature and theory: - Predictive and test the Knowledge Management System Model of SME’s Vietnam - Building Enterprise Architecture for the Knowledge Management System Model - Giving the Impact Model of the Knowledge Management System to Competitive Advantage New recommendations: - My thesis evaluates actual state of implementation of the Knowledge Management System in SME’s Vietnam - Knowledge Management System is being used and practice in some SME’s Vietnam 5 CHAPTER 1. THE ISSUES BETWEEN THE KNOWLEDGE MANAGEMENT AND COMPETITIVE ADVANTAGE IN SME’S IN VIETNAM In this chapter, I have already shown in the background of the issues between the Knowledge Management and Competitive Advantage in SME’s in Vietnam. The first, I indicate the fact of problem of SME’s in Vietnam. The second, I introduce Competitive Advantages and Capacity in building sustainable competitive advantages. The third, I give the overview of Knowledge, types of Knowledge and Knowledge Management in companies. The last, I explain analysis and evaluation to give the roles of Knowledge Management in building the Competitive Advantages in SME’s. 1.1. Vietnam SMEs Depending on the country, the size of the enterprise can be categorized based on the number of employees, annual sales, assets, or any combination of these. It may also vary from industry to industry. 1.2. Competitive Advantages M.Porter (2004) explained that: “Competitive advantage is a function of either providing comparable buyer value more efficiently than competitors, or performing activities at comparable cost but in unique ways that create more buyer value than competitors and, hence command a premium price”. Competitive advantages are conditions that allow a company to produce a good or service at equal value but at a lower price or in a more desirable fashion. These conditions allow the productive entity to generate more sales or superior margins compared to its market rivals. Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property and customer service. 1.2.1. The definition of Competitive Advantage 1.2.2. Effect of Core Competence of Enterprises on Competitive Advantage 6 - Creation - Adaptation - Internalization - Connection - Knowledge - Integrated Capacity 1.3. Knowledge Management in Enterprises 1.3.1. The definition of Knowledge Sveiby (1997-1998) showed that “Knowledge is the ability to explain and act something”. Following Nonaka& Takeuchi (1995) indicated that “Knowledge is the dynamic process of person to demonstrated faith of truths”. Davenport &Prusak (1998) and Davanport (1999) gave the definition of Knowledge is the information in your brain that the aggregation of experience, value, context of information and specialist knowledge. These helps to evaluate and coordinate to create new experiences and information including comparison, results, contact and communication. Stenmark (2001), Quigley and Debons (1999), Holsapple and Joshi (2000) show that: “The brain transforms information into valuable knowledge which helps us understanding the definitions by answer questions: How? Know-How? Why? Know-Why? 1.3.2. Types of Knowledge Nowadays, several definitions of knowledge and theories to explain it exists. Knowledge dividends into many types such as: Individual Knowledge and Group Knowledge, Tacit knowledge and Explicit knowledge. 1.3.3. Business knowledge Business knowledge is a sum of skills, experiences, capabilities and expert insight, which you collectively create and rely on in company. As a 7 shared resource, knowledge shapes and affects all the activities in and around company. 1.3.4. Knowledge Management in Business Knowledge Management is a multidisciplinary assessing and several definitions. Many researchers gave several definitions about Knowledge management so had some confusion. Researchers gave two orientations: human orientation and information technology orientation. Two orientations show basic of approach, or researcher, organization and investigate Knowledge management system, computer science, artificial intelligence. There are definitions of both the approaches, but most of them focus on human orientation and technology orientation is just supporting factors. - Classification of Knowledge Management + From the learning organization to Knowledge management + From database to Knowledge management + From traditional to knowledge work professions - The process of Knowledge transfer Socialization Externalization Internalization Combination Figure 1: SECI model of Nonaka Source: Nonaka,1991 - Socialization: Sharing tacit knowledge through face-to-face creation or shared experience. - Externalization: Tacit to explicit. Developing concepts, which embed the combined tacit knowledge. And which enable its communication. Tacit Tacit Explicit Explicit Explicit Explicit Tacit Tacit 8 - Combination: The creative use of computerized communication networks and large-scale databases can support this mode of knowledge conversion. - Internalization: Transfers from explicit knowledge into tacit knowledge held by the individual through the actual doing or through simulations. - Environment of transfer knowledge The theory of knowledge creation through the SECI process, and try to advance them further incorporating the dialectic thinking. Knowledge is conceptualized as a shared context in motion, can transcend time, space, and organization boundaries to create knowledge. (Nonaka, 1991). Knowledge creation is conceptualized as a dialectical process, in which various contradictions are synthesized through dynamic interactions among individual, the organization, and the environment. In the knowledge-creating theory, Nonakael at gave the importance of physical space or cyberspace of knowledge transfer environment interaction. The environment of transfer knowledge is “a space that allows participants share case and creation knowledge through interaction” 1.4. The role of knowledge management in creating competitive advantage for SMEs Many information system papers showed the effectiveness of knowledge management systems (KMS) as the most advanced innovation in the future. Davenport and Prusak (1998), Johnson (1998), Alavi and Leidner (2001) indicated the importance of developing an organization’s KMS to maintain competitive advantage in business environment. Knowledge management system in business, especially SMEs is strategic to improve their competitiveness. It has four factors: rarer, non- imitate, valuate and irreplaceable, specifically: Creation capacity, adaptation capacity, internalization capacity, connection capacity, knowledge capacity, 9 integrated Capacity. Thence, SMEs gives some competitive advantages through methods: - Enhancing products - Creating product differentiation - Keeping customers - Prevent competitors entering the market - Increasing profits by reducing cost Nowadays, information system is important components that helps company maintaining their business goals and having competitive advantage in the market. Information technology is an indispensable factor in the strategy of company. SMEs should use knowledge management system which is a useful tool to defeat such powerful opponents and attract more customers with their brand positioning strategy. 10 CHAPTER 2. KNOWLEDGE MANAGEMENT SYSTEMS IN SMALL AND MEDIUM ENTERPRISES IN VIETNAM Knowledge management systems in small and medium enterprises in Vietnam is considerably researched from the overview to that of detail. The first part of the chapter, it presents an overview of the research school of knowledge management systems. Besides, the authors examined the current situation and determine the level of development of knowledge management systems in small and medium enterprises in Vietnam. Finally, the author proposed and tested model of factors affecting the knowledge management systems in small and medium enterprises in Vietnam. 2.1. Situation knowledge management systems in small and medium enterprises in Vietnam We have other with data management or information management and knowledge management is understood as a process created, shared, exploited and developed knowledge assets in enterprises in order to enhance the effectiveness of the innovative capacity innovation and rapid response capabilities of the business. 2.1.1. Schools of research on knowledge management system 2.1.1.1. Innovative diffusive theory 2.1.1.2. Reasonable action theory 2.1.1.3. Technology acceptance model 2.1.1.4. Theory of planning behavior 2.1.1.5. The fit between tasks-technology 2.1.1.6. Theory of social capital 2.1.1.7. Social awareness theory 2.1.1.8. Modeling success stories 2.1.1.9. Model of information system 2.1.2. Knowledge management system in small and medium enterprises 11 Knowledge Management System (KMS) includes g tools and technology support and organizational problems. KMS is all of knowledge of such organizations KMS consist of a current knowledge hidden, appeared, made an creative and shared, stored and used. Therefore, it can be defined in many different ways and applied in many areas of the organization of activities related to human technology and processes. 2.1.3. Level of development of knowledge management system in small and medium enterprises in Vietnam Figure 2: Graduation scale of Knowledge Management system development in Vietnam’s SMEs 1. Graduation scale of knowledge management system development in small and medium enterprises in Vietnam 2.2. Factors affecting knowledge management systems in small and medium enterprises in Vietnam 20 19 27 18 12 4 Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 0 10 20 30 Level of Knowledge Management system in Vietnam’s SMEs Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 12 2.2.1. Model of enterprise knowledge management system According to Svetlana Sajeva & Robertas Jucevicius (2010), knowledge management systems are characterized by six factors: (1). Knowledge Management Process (KMP) Factor: KMP consists of 3 variables: Process Implementation and Coordination (KMP1), Process Formulation (KMP2), Process Performance Measurement (KMP3). (2). Strategy Leadership (SL): SL consists of 5 variables: SL1, SL2, SL3, SL4, Reward and motivation (SL5). (3). Organizational Structure (OI): Stacey (1995) states that the OI consists of four variables: OI1, OI2, OI3, Social Networking (OI4). (4). Technology Infrastructure (TI) Factor: TI consists of three variables: the existence of information and communication technology in line with business development (TI1), access to information technology and business communication (TI2), enterprises have regular application of information and communication technologies (TI3). (5). Academic Organization (OL): OL consists of three variables: learning before knowledge management (OL1), learning in knowledge management (OL2), learning after knowledge management (OL3). (6). Organizational Culture (KC): The KC consists of 5 variables: KC1, KC2, KC3, KC4, Culture of Culture, share knowledge (KC5). Table 1: Cronbach's Alpha Scales of Variable Knowledge Management System Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted KMS (Cronbach's Alpha = 0.856) KMS1 14.6000 9.899 .666 .828 KMS2 14.6900 10.054 .644 .834 KMS3 14.6300 9.852 .660 .830 KMS4 14.6700 9.294 .674 .827 KMS5 14.5300 9.524 .715 .815 13 2.2.3. Analyzing Discovery factors Table 2. Verify KMO and Bartlett's for independent variables Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.717 Bartlett's Test of Sphericity Approx. Chi-Square 881.136 Df 253 Sig. 0.000 Coefficient of KMO = 0.717> 0.5: analyzing factors is appropriate for research data. Bartlett's test result is 881,136 with significance level sig = 0.000 <0.05, so the factor model hypothesis is unsuitable and will be rejected, which proves that the data used to analyze the factor is extremely appropriate. 2.2.4. Analyzing assertive factors Figure 3. CFA results of variables Intention to share work experience 14 2.2.5. Model validation After evaluating the scales, we test whether the model that t is suitable by running on the Amos software. The resulting non-standardized model is shown in Figure 3: Figure 4. The non-standardized model 15 CHAPTER 3. DESIGN ENTERPRISE ARCHITECTURE FOR KNOWLEDGE MANAGEMENT SYSTEM IN SME’S IN VIETNAM Overall, I indicate the designing enterprise architecture for Knowledge Management system. At first, I concentrate on the method of building model for all of the information system, based on the result to evaluate, analyses and select the Togaf way to create the overall model for Knowledge Management system at SME’s in Vietnam. The next of content, showing the results of building from the master to the detail of Knowledge Management system. Finally, the experimental results, applied the overall model to develop and implement at a specific business, is introduced 3.1 Enterprise architecture design method "The enterprise architecture is known to be a set of principles, methods and forms used to describe the organizational structure, business process, infrastructure, information system or any constituent elements or any other agency, organization, enterprise "according to Nguyen Minh Hong (2011). Figure 5. History of the enterprise architectures 3.2. Building the enterprise model for Knowledge Management System Key components of that system Business Process Architecture: including the development strategy, management system, organizational structure, the main business processes of a system. 16 Data Architecture: The structure of the physical data assets (text, books, ...) and the logic (digital data) of the system and the tools for managing this data asset. Application Architecture: The overall design of the software applications is used, the interaction between them and their relationship to the main business processes of the system. Technology Architecture: Describing the hardware and software infrastructure which is vital in developing the three architectures. Technology architecture includes: information technology infrastructure, middleware, networking, communications, standards, etc. System architectural framework: The architectural framework makes general rules for the creation, interpretation, analysis and use of architectures in a particular area of software or in the community that involved. Figure 6. Business Process Flow Diagram of Enterprise Knowledge Management System Begin 1. Operational 2. Collective problems 3. Exchange 4. Answer the question and solve problems 5. Appreciated the answers 6. Storage Knowledge database The end 17 3.2 Business Process Flow Diagram of Enterprise Knowledge Management System Personal Information System Policies User Interface Portal The Regulation Of It Applications Software Training And Supervision Background Technology Software It Data Digitization Database Process Operation Cooperate Environment Infrastructure Development Strategy Figure 7:. The IT architecture 3.3 Experimental building knowledge management system based on ERP Figure 8. Modules supported production and business operations 18 CHAPTER 4: THE KNOWLEDGE MANAGEMENT SYSTEM TO MAKE COMPETITIVE ADVANTAGE FOR SME’S IN VIETNAM In this chapter, I propose a model and test the impact of knowledge management system to a competitive advantage SME’s in Vietnam. The content is presented in detail from the design study model research methods to test the model results. Thereby, finding out the inadequacy of knowledge management in today's business, throughout analyzing to find the cause and choosing a solution selection of optimal solutions and conducting building system implementation knowledge management in the enterprise. 4.1. Question Recent researches in the field of information systems appreciate greatly the knowledge management system (KMS) as the important innovation to enhance the operational efficiency of the business. Continuing upheaval of the corporate market we always try to create and maintain competitive advantage. Enterprises must effectively manage the resources of their unit and one of the assets most important strategy that is knowledge (Nonaka 1995). Business knowledge may be found to be used and shared by decision makers when they need it. There are many information technology systems can effectively support the flow of knowledge. A system can the best support the KMS line from which knowledge can improve the creativity popular organizations collected knowledge (M. Alavi and D. Leidner 2001). In other words, the KMS system has a great influence on the creation of competitive advantage. 4.2. Designing research My thesis randomly selected businesses across the country operate in the field of information and communications technology including the type of public, private, venture and capital foreign investments, etc. It focusses primarily on medium-sized enterprises and small and progress survey by two methods of direct interviews and using questionnaires. 19 4.3. KMS model to CA Figure 9. KMS model to CA 4.4. Research Methods The study used analysis methods linear structure (Structural Equation Modeling SEM-) to verify estimates explore factor analysis and the appropriateness of the model + The first phase, it involves evaluating their selection interview question survey to obtain data along-to-use analysis. Using quantitative preliminary set sample initially test the correlation between the variables correlated variables total inspection Cronbachs Alpha testing the factors explored (EFA) which determine the pattern with the scale officially Decision making process - Tacit knowledge - Explicit knowledge - Cultural knowledge Knowledge management system -Reliability -Flexibility -Integration -Approach -In Time Learning -Creation - Receipt -Organization -Common Capacity of innovation - Process innovation - Product innovation Competitive advantage - Product quality - Market position - Diversify products - Difficult to imitate - Administrative procedures 20 + SEM method is used to test the model appropriately, weighted sum CFA, reliability, unidirectional convergence and distribution value, ect appreciate an influence on the degree of correlation with each other independent factors 4.5. Results of model testing Cronch Alpha coefficient of variables Measurement Reliability Scores for each variable: Knowledge Management System, Decision Process, Innovation Capacity, Learning Ability and Competitive Advantage are summarized as follows: Table 3. Cronbach Alpha coefficients of variables No Variable name Identification Number of observation variables Coefficient Cronbach Alpha 1 Knowledge management system KMS 5 0.810 2 Decision making process DMP 3 0.891 3 Capacity of the organization CO 2 0.770 4 Learning ability LA 4 0.914 5 Competitive advantage CA 5 0.847 Analyzing discovery factors According to Hair &etc (1998, 111), KMO (Kaiser-Meyer-Olkin) is an indicator of factor suitability. The KMO test results are as follows: Table 4. KMO Coefficients Accredited KMO and Bartlett KMO Coefficients 0.749 Bartlett form Approx.Chi-Square 3665.765 df 171 Sig. .000 21 According to the analysis reuslt, the KMO coefficient = 0.749> 0.5: Factor analysis is appropriate with the research data. Analyzing the assertive factor Results of the CFA model Chi-square Chi-squaredf df143 423 894 296 3 unsatisfactory (Carmines McIver 1981) worth 005 p 0000 is a perfect fit. Other indicators show that this model fit the data research (CFI 0917 09 09 TLI RMSEA 089 008 0074). Components consist of: Systems Knowledge Management, Learning Ability, decision process innovation capability and competitive advantage are achieving unidirectional. The correlation coefficient between the conceptual component is P-value ≤ 0,05. Thus P-value components Knowledge Management System Learning Ability decision process innovation capacity and competitive advantages are achieved separated values special. The scale for the observed variables of knowledge management system to achieve the convergence value. Figure 10. Model affects KMS to CA 22 CONCLUSION The dissertation has presented the realities of the development of knowledge management systems in small and medium enterprises in Vietnam. The most common level is the system that allows new employees in the enterprise to perform old jobs using published business processes. This system accounts for the highest rate of 27% and the optimized KMS system accounts for the lowest rate of 4%. In the context of research being workers in Vietnamese enterprises, where every employee has the need to learn from other people experience, sharing, exchanging, learning the knowledge in business is always on high demand. Corporate governors need to invest in the knowledge management system development along with paying some considerable attention to their staff: creating favorable conditions and building incentive mechanism to encourage employees to actively learn and pass on their experience; aiming at the goal of building a complete enterprise knowledge management system that allows knowledge to be created, used, shared and stored continuously to contribute to building sustainable competitive advantage and enhancing efficiency - the fruit of the business. Research results show that small and medium enterprises are aware of the role that knowledge management plays in their production and business activities. It can be emphasized that each component of the knowledge management system can be characterized by different parameters. The dissertation has proposed a number of factors that contribute to effective management and are considered as an important condition for the successful creation and development of knowledge management systems, the numerical values of these results are used for smal