Managing the Complementarity of Knowledge Integration and Process Formalization for Systems Development Performance

Systems development processes have received significant negative publicity due to failed projects, often at large costs, and performance issues that continue to plague IS managers. This study complements existing systems development research by proposing a knowledge management perspective for managing tacit and explicit knowledge in the systems development process. Specifically, it proposes that collaborative exchange and integration of explicit knowledge across phases of the development process positively influence the performance of systems development. It also suggests that process formalization not only directly impacts development performance but also moderates the performance effects of the knowledge integration factors. Data for the empirical study were collected from 60 organizations that are part of a user group for one of the world’s largest software development tool vendors. 1 Jeffrey Parsons was the accepting senior editor. This paper was submitted on March 1, 2005, and went through 3 revisions. Knowledge Integration and Process Formalization/Patnayakuni, Ruppel, & Rai Journal of the Association for Information Systems Vol. 7 No. 8, pp. 545-567/August 2006 546 Empirical results provide strong evidence of the importance of supporting tacit and explicit knowledge processes in systems development as well as process formalization. The findings suggest that: (i) collaborative exchange among IS employees that integrates their tacit knowledge positively impacts development performance, (ii) explicit knowledge integration in development artifacts across different phases of the systems development process positively impacts development performance, (iii) formalization of processes that establishes routines and discipline yields performance gains, and (iv) the performance effects of both collaborative exchange and explicit knowledge integration are moderated by the formalization of the process. These results have implications for how both tacit and explicit knowledge integration can be managed during systems development, and how formalization of processes complements their relationship with development performance.