dynamic information systems for sme cluster: case study of...

วารสารบริหารธุรกิจ

Dynamic Information Systems for SME Cluster: Case Study of Lampang Ceramic Cluster

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Atichart Harncharnchai Ph.D. Candidate, Knowledge Management,

College of Arts, Media and Technology, Chiang Mai University

Dr.Paradorn Sureephong Lecturer of Department of Knowledge Management,

College of Arts, Media and Technology, Chiang Mai University

บทคัดย่อ ตสาหกรรมขนาดกลางและขนาดย่อมกำลังเผชิญกับความยากลำบากของการดำเนินงาน ภายใต้สภาพแวดล้อมแบบ

พลวัตซึ่งมีการแข่งขันสูงในยุคโลกาภิวัตน์ เพื่อความอยู่รอดของอุตสาหกรรมขนาดกลางและขนาดย่อม มีความจำเป็น

ในการปฏิรูปโดยการรวมกลุ่มอุตสาหกรรมที่เรียกว่า “คลัสเตอร์” จากข้อมูลเบื้องต้น ความร่วมมือในกลุ่ม

อุตสาหกรรมขนาดกลางและขนาดย่อมอยู่ในระดับต่ำ และขาดระบบสารสนเทศที่เหมาะสมสนับสนุนการทำงาน

บทความนี้เน้นการออกแบบและพัฒนาระบบสารสนเทศแบบพลวัตใน 3 ด้าน คือ การตอบสนอง เวลา และเหตุการณ์ โดยมี

วัตถุประสงค์เพื่อสนับสนุนสมาชิกในกลุ่มคลัสเตอร์ ด้วยฟังก์ชั่นสำหรับรายบุคคลในการติดต่อสื่อสาร แลกเปลี่ยน และสร้างความ

ร่วมมือโดยมีเป้าหมายร่วมกัน โดยมีการนำเสนอระบบสารสนเทศบนเว็บ 2.0 กระบวนการดับเบิลสไปรัลและเทคนิคการพัฒนา

โปรแกรมประยุกต์แบบมีส่วนร่วมถูกนำมาใช้ในการสกัดความต้องการและเพื่อการแลกเปลี่ยนเรียนรู้จากการประชุมร่วมแบบ

โครงสร้าง การติดตั้งระบบสารสนเทศแบบพลวัตนำไปใช้กับกรณีศึกษาอุตสาหกรรมเซรามิคคลัสเตอร์จังหวัดลำปาง ผลจากกรณี

ศึกษาพบว่าระบบสารสนเทศส่งผลที่เป็นรูปธรรมต่อการแลกเปลี่ยนเรียนรู้และการสร้างความร่วมมือระหว่างสมาชิก การวัดผลการ

ปฏิบัติงานของระบบพบว่า จำนวนสมาชิกที่มีบทบาท ความรู้ที่ไหลเข้าสู่สมาชิก และกิจกรรมความร่วมมือของสมาชิกในกลุ่ม

คลัสเตอร์ มีจำนวนเพิ่มมากขึ้น

คณะพาณิชยศาสตร์และการบัญช ีมหาวิทยาลัยธรรมศาสตร ์

ปีที่ 34 ฉบับที่ 129 มกราคม-มีนาคม 2554

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mall and Medium Enterprises (SMEs) are faced with operation difficulties under the dynamic and

competitive circumstances of globalization. In order for SMEs to survive, they have to reform their

ways of running their businesses by linking together to form a cluster. From the initial findings, the

collaboration among SME firms is quite low and there seems to be little support of proper

information systems. This paper focuses on the dynamic design and development of information systems in

three aspects: response, time, and event. The purpose of the paper is to provide the cluster members with the

individualized functions to communicate, share, and collaborate for a shared goal. A Web 2.0-based information

system is proposed. The double spiral process with joint application development is a technical approach to

elicit the requirements and to share knowledge in a structured group session. The implementation of the

dynamic IS has been used in the case study of the Lampang ceramic cluster. The case results have shown that

the IS gives concrete impact to member’s knowledge sharing and collaboration. The measurement of IS

performance has also shown that there is an increasing number of active members, knowledge inflows, and

collaborative activities among cluster members.

Keywords: Collaboration, Dynamic Information Systems, Web 2.0, Joint Application Development, SME Cluster

ABSTRACT



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1. Introduction Small and Medium Enterprises (SMEs) have

long p layed a c ruc ia l ro l e i n the economic

development of many countries (Beck et al., 2005).

However, in the last decade, changes in rivalries in

the global market and knowledge-based economy

drove SMEs to adapt themselves to the new

management paradigm. Companies that are capable

of utilizing knowledge and shift their businesses into

a new market will survive (Glenn, 2009). The study of

Young and Molina (2003) has shown that one way for

SMEs to survive in today’s unsteady business

environment is to form strategic alliances or merge

with other similar or complementary business

companies. This supports the idea at the industrial

cluster approach where groups of core f i rms,

specia l ized suppl iers , serv ice prov iders , and

associated institutions in a particular industry within a

specific geographic region are interlinked (Porter,

1990). The development and success of the industrial

cluster is determined by relationships among its

members which generally involves sharing information

and experiences, sharing resources, and developing

common strategies in areas such as product

development, market ing, and training (Ecotec

Research and Consulting, 2004). The way to increase

relationships is to encourage collaboration among

firms to achieve greater economies of scale without

increasing additional costs. Collaboration is defined

as a process to achieve mutual benefit or a common

goal by exchanging information, altering activities,

sharing resources and enhancing each other’s

capacity (Himmelman, 1995). The key point is that

organizations and individuals are willing to learn from

each other to become better at what they do.

Col laborat ion is now becoming the basis for

successful organizations that support sharing and co-

production through leveraging dispersed resources

and capabilities (Hansen and Nohria, 2004; Gloor and

Cooper , 2007) , and knowledge creat ion is a

significant benefit of collaboration (Lotia, 2004, p. 58).

Knowledge Management (KM) is one of the

leading approaches that helps create new working

environments where knowledge and experience can

easily be shared, and also enables information and

knowledge to emerge and flow to the right people at

the right time so they can efficiently use it to support

their tasks (Smith and Farquhar, 2000). KM uses

information systems (IS) as an extension tool to

manage organizational knowledge by supporting and

enhancing the processes of creating and sharing

knowledge (Alavi and Leidner, 2001). Knowledge

shar ing of ten requ i res soc ia l processes and

interactions because of the tacit nature of knowledge

(Granovetter, 1985, p.491), which corresponds to

knowledge conversion processes where the exchange

of tacit knowledge in the socialization stage depends

on the social relation (Nonaka, 1995). Recently, social

networking has become a major organizational focus

in the development of communities and collaboration,

which is the key factor for knowledge creation and

the sharing process. The new concept of Web 2.0

has initiated a strong impact on social networks in

the online community for its dynamic concept of

“web for part ic ipat ion” or “web for individual

services” (O’Reilly, 2005). Web 2.0 provides a set of

social networking tools such as wikis, blogs, and

social network services that enable new ways of

co l laborat ion , t ransact ion , and par t ic ipat ion

(Dearstyne, 2007; Tapscott and Williams, 2006).

From the def in i t ion , industr ia l c luster

comprises various sectors of enterprises. This paper

aims at the development of web-based information

systems by focusing on the dynamic design concepts

in response to different user requirements. However,

due to rapid changes in both technologies and

bus iness env i ronments , in format ion systems

development must be carried out in a way that will

lead to success in both technical and organizational

aspects. An evolving software development process

is applied in accordance with the evolving business



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process. The “Double Spiral” process, with joint

appl icat ion development (JAD) technique , is

proposed. JAD is a method whereby systems

stakeholders work together in facilitated group

sess ions to spec i fy and per form pre l iminary

development (requirements gathering and analysis) of

a system (August, 1991). Typically, JAD stakeholders

include leaders, users, developers, and sponsors.

Incremental prototyping and knowledge conversion

processes are the two technical approaches used

during the JAD sessions. As a result, developing

software content and sharing knowledge content

gradually increase throughout the double spiral

process. The paper starts with a review of the

industrial cluster concept, the knowledge conversion

process, and the software development process. The

architecture of dynamic information systems is then

proposed. The case of the Lampang ceramic cluster

is tested to evaluate the IS performance and

collaborative outcomes.

2. Related works SMEs have been of considerable interest to

many countr ies over the last decade as they

associate with the country’s development. Over 95

percent of the economy with an average total of

employed workers of 65 percent labor forces in Asia-

Pacific region comes from SMEs (Kotelnikov, 2009).

In recent years, with fierce global competition and in

response to customer satisfaction, SMEs have been

required to become more productive and competitive.

However, due to a lack of both skilled workers and

resources, SMEs require an innovative capacity of

skills and expertise (Burgelman et al., 2003) which

can be increased by incorporation into a form of

SME cluster. The inter-relationships among core firms,

suppliers, and supporting industries generate so-

called external economies such as an emergence of

specialized suppliers, a pool of skilled workers, and a

shared value of information and knowledge. Social

networking is a crucial factor for cluster development

as it facilitates the knowledge creation process where

the transformation between tacit knowledge and

explicit knowledge can be supported through social

interactions among the individuals (Granovetter, 1985,

pp.498-502).

Knowledge management is the approach that

helps spread the knowledge of the individuals or

groups within and across the organizations in a way

that directly affects performances. Knowledge

creation and learning have become the vital source of

sustainable competitive advantage (Boisot, 1999).

Nonaka and Takeuchi (1995) suggest that continuous

innovation is the product of new knowledge created

from the conversion of tacit knowledge to explicit

knowledge. It is difficult to express tacit knowledge,

such as experience and skills, while it is easier to

express explicit knowledge, which comes in the form

of hard copy, such as documents and electronic files.

The transformation between tacit knowledge and

explicit knowledge is referred to as the SECI model,

where the process of knowledge creation moves

t h r o ugh f o u r d i f f e r e n t c on v e r s i o n modes :

Socialization, Externalization, Combination, and

Internalization.

Socialization is the process of sharing tacit

knowledge, i.e. experiences, expertise, and skills,

through social interaction between individuals in

d i f f e ren t fo rma l and i n fo rma l commun i t i es .

Externalization is the process of articulating tacit

knowledge into explicit knowledge expressed in the

concepts or prototypes which will be crystallized and

become the basis of new knowledge. Combination is

the process of converting explicit knowledge into

more systematic knowledge through exchanges or in

combinat ion wi th such media as documents ,

meetings, online communication networks, and

databases. Finally, the created explicit knowledge is



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shared throughout the organization and converted

into tacit knowledge among individuals, which is the

approach of “learning by doing”. The learning

process continues to grow in a spiral loop and

knowledge is created and expanded over time. In this

way, the dynamism of cluster for organizational long-

term competitiveness can be achieved (Bell and Albu,

1999).

As globalization transforms organizations to

move towards a knowledge-based economy, the era

of virtual enterprise is a new model for social

networking. Communities of Practice are groups of

people who share a concern or a set of problems,

and who deepen their knowledge and expertise in

this area by interacting on an ongoing basis (Wenger

and Snyder, 2000). In the evolution of internet-based

technologies, social networking takes place online.

V i r tua l Communit ies of Pract ice (VCoPs) are

becoming widespread. Many VCoPs rely on web-

based collaborative environments to communicate,

connect, and conduct community activities. The new

concept of Web 2.0, announced by Tim O’Reilly in

2004, has in i t iated a strong impact to socia l

networking in VCoPs. Hoegg et al. (2006) defines

Web 2.0 as the philosophy of maximizing a shared or

group intel l igence and added values for each

participant by formalized and dynamic information

sharing and creation. Technologies of Web 2.0 create

new features for online networking and collaboration

(Tapiador et al., 2006). Various networking tools such

as blogs, wikis, and social network service (SNS)

allow users to create and maintain an online network

for social and professional needs.

Social network software encompasses a

range of software systems that allow users to interact

and share data. Information systems are types of

software systems that combine technologies with

people’s activities to support operations, management,

and dec i s ion -mak ing . Fo r SME c lus te r , t he

information systems are required by dispersed

knowledge workers to seek common solutions by

effectively sharing their expertise. Therefore, the

development of IS for SME cluster can be achieved

by adopting social networking tools and Web 2.0 as

a platform to enhance knowledge sharing and

collaborative activities. A number of IS for SMEs have

been p roposed , bu t f ew o f t hem f ocus on

collaboration among SME clusters (Levy, Powell and

Yetton, 2001, 2002). For SME cluster, business

processes keep changing regular ly , based on

environmental changes while collaboration and

knowledge sharing are crucial factors. Moreover,

technologies in both hardware and software also

change very rapidly. The following criteria for the

development of the IS for SME cluster are therefore

to be concerned.

(1) There are many types of users in SME

cluster located at different remote sites and whose

requirements are different.

(2) Collaborations among members are

usually uncertain, based on changes in business

process.

(3) Software development for SME cluster

must be dynamic in response to changes in

technologies and in collaborative activities.

There are many different methods used to

direct tasks in software development. The typical

tasks of the most common models include analysis,

design, development, and maintenance of information

systems. Most software development processes used

today have evolved from three traditional approaches:

Ad-hoc development, the Waterfall model, and the

I terat ive process, each of which has i ts own

advantages and limitations (Sommerville, 2001). For

SME cluster where business processes and software

development tools rapidly change, the development

of the IS must be dynamic to cope with such

changes. Prototyping approaches that provide fast



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results (Agresti, 1986) and multiple JAD sessions that

capture incremental requirements from collaboration

and knowledge sharing are adopted.

3. Methodology

This section starts with findings from a

survey and then proposes the architecture of a

dynamic information system. The double spiral

process with JAD and application are then discussed.

An init ial survey has been done to the

members of the ceramic cluster in Lampang province.

The survey method is based on questionnaires and

personal interviews. A total of 62 questionnaires were

sent to 6 groups of the ceramic cluster (Trust, Active,

Believe, Harmonize, Sira, and Ceracluster groups) and

cluster development agent (CDA), which is the

government enterprise. There are between 5 to 8

firms in each group, except the Ceracluster, which

has 25 firms representing all types of members,

including core firms, suppliers, and related sectors. A

total of 45 questionnaires, or 72.6%, were returned.

Subsequent personal interviews have been conducted

with cluster leaders who acted as the groups’ leaders.

The result in Table 1 shows that the use of basic

too ls , such as te lephone , fax , and E-mai l in

communication, is high. However, the use of web-

based applications is low. This indicates that most of

the SMEs have used pr imit ive technology for

communication purposes only, while few of them

ha ve u s ed mo r e advanced t e chno l og y f o r

collaborative purposes.

Technology Percentage of use

1. Telephone/ Fax 100.00

2. E-mail 100.00

3. Messaging tools 46.00

4. Web-based applications 32.00

Table 1: Usage of Technology

Tab l e 2 shows t he p r e sen t l e ve l o f

collaborative activities among cluster members. Most

of them agree that communication and information

sharing is useful. However, the completion and

correction of communication is quite low. One of the

most important issues is that the collaboration

between partners cannot solve the problems of each

other . This indicates that the SMEs consider

communication among their group members as an

important aspect , but they have less use for

technologies in collaboration and information sharing.

From the personal interviews of group leaders,

collaboration among group members is uncertain and

occurs by chance, varying from task to task. For

example, one firm may subsequently place some part

orders to another firm with which they have good

personal contacts. In addition, most ceramic SMEs

run businesses from generation to generation and no

new management approaches are used. From the

survey results, the following observations have been

found and are to be considered:

(1) SME cluster members are willing to adopt

the IS and consider the IS as a potential tool to

support communication and information sharing.

(2) SME cluster members real ize that



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information sharing is important, yet they prefer to

share only the information that they are willing to

share.

( 3 ) The r equ i r emen t s o f web-based

information systems are to be considered to help

improve the collaboration among firms within the

cluster.

Collaborative Activities Percentage

1. Open and frequent communication 93.33

2. Communication completed and reliable 65.00

3. Communication is prompt and punctual 62.50

4. Members trust each other 69.17

5. Continued sharing of information 80.00

6. Collaborative problem solving 16.67

7. Sharing of confidential information 39.17

8. Sharing of orders 40.00

9. Joint R&D and investment 30.00

10. Finding new market channels together 50.00

Table 2: Degree of collaborative activities

3.1 The dynamic design concept of

information systems

The concept idea in developing information

systems for SME cluster is to provide services

through a webpage so that all the members can

communicate and exchange information. Users

generally want to express their needs to the system,

and the system must “respond” with the right

information for the user. Therefore, a webpage must

be designed based on individual needs in three

dynamic aspects: response, time, and event. For

example, the web contents for managers may include

information about market, finance, and product

trends, while knowledge workers require different

information, such as production and technical

knowledge. Moreover, web pages for individuals must

also change differently based on their collaborative

activities in SME cluster. For example, one firm’s

webpage automatically displays information about the

Bangkok International Gift fair while others do not.

Information and knowledge sharing among only

concerned members wil l then be init iated. The

Cascading Style Sheet (CSS) is a useful tool for this

purpose, as different CSS can be designed to match

different purposes (Bos, et al., 2004). Finally, the

sys tem must have the capab i l i t y o f “event”

managemen t . E i t he r p l anned o r unp l anned

information, private or public information, must be

easily managed and customized by individuals or

groups. Calendar and social networking tools can

serve this purpose. With the three dynamic aspects,

individuals are connected with one another as they

are socialized by the given information (the right

information is sent to the right users without request).

The sharing of information and knowledge will then

be initiated in several groups of social networking

that share a common business goal. Therefore, the

use of the IS will be motivated and encouraged

sustainably, and in turn, knowledge sharing and

collaboration shall be enhanced. Participants will get



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the right information at the right time from the

dynamic, web-based IS. The architecture of dynamic

information systems which is supported by various

collaborative services is proposed in Figure 1.

From Figure 1, different cluster participants

require and share different information and knowledge.

This means that knowledge sharing and collaboration

within clusters will be developed if members are willing

to share information. The design of IS considers that

sharing levels among cluster members can be

classified into three types: 1-to-1, 1-to-many, and

many-to-many relationships. Social networking services

of Web 2.0 and the dynamic design concept are

important tools to achieve such requirements.

Figure 1: Architecture of dynamic information systems

Software Requirement Specification (SRS) which

meets the IEEE-830 standard, is used to create the IS

specification (IEEE-SA Standards Board, 1998). It

describes what the system will do and how it is

expected to perform. Figure 2 and Figure 3 show

examples of requirement specifications and functional

specifications concerning users’ personalization

support, communication support, and knowledge

sharing support.

Figure 2: Examples of requirement specifications



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3.2 Double spiral with JAD: management

of IS requirements and knowledge sharing

In section 3.1, the development of the IS

focuses on the dynamic functions to serve the

individual needs. This will encourage and motivate the

cluster members to sustainably use the IS. However,

for knowledge-based IS, the system requirements are

more obvious as new information and knowledge

i n c r ea ses t h r ough know l edge sha r i ng and

collaboration during the system use (Hickey and

Davis, 2003). Figure 4 shows the double spiral

process with JAD technique, in which the software

content (IS functions) and the knowledge content

(shared information and knowledge) gradual ly

Figure 3: Examples of functional specifications

increase from JAD1 to JAD4. Each JAD session

results in the increasing functions of IS (through the

prototyping development) and increasing knowledge

(through the SECI process). The four different types

of knowledge created in each mode of the SECI

process include sympathized knowledge, conceptual

knowledge, systemic knowledge, and operational

knowledge. As shared tacit knowledge transforms to

explicit knowledge, the collaboration among the

members natural ly takes place in a variety of

activities to achieve the mutual benefits of a shared

goal.



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The process of JAD is divided into four

sessions corresponding with the SECI process. In

every JAD session, the system requirements are

increasingly elicited from the visualization of the

system prototype and the incremental functions are

then added. The prototype will be used by the SME

members after each JAD session has been finished.

Information and knowledge is then exchanged,

shared, and accumulated into the system. Throughout

the JAD4 sess ion , the movement f rom tac i t

knowledge to explicit knowledge usually creates the

col laborat ive activit ies among different social

networking members and comes up with new explicit

Figure 4: Double spiral process with JAD technique

outcomes. For SME cluster, these outcomes can be a

new product, a new production method, or a new

marketing strategy, etc. Similarly, at the end of the

JAD4 session, the final result of the system is a

completion of the IS. Therefore, in circumstances

where business processes for SME cluster regularly

change due to the dynamic changes of business

environments and the rapid advance in technologies,

the double spiral process seems to be a very useful.

To clarify how the double spiral process with JAD

technique works, the scenario of new product

development based on 1-to-many collaborations is

illustrated (See Table 3).

JAD session Software content Knowledge content

JAD1 S1 Incremental functions - E-mail, SMS

K1 Sympathized knowledge - Product ideas/ specifications

JAD2

S2 Incremental functions - Social network service - Calendar - File manager

K2 Conceptual knowledge - Product concept/ prototype

JAD3 S3 Incremental functions - Search tools, FAQ

K3 Systemic knowledge - Finished product

JAD4

S4 Final system - Final IS prototype

K4 Operational knowledge - New knowledge/ experiences

Table 3: Double spiral process with JAD (the scenario of new product development)



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JAD1 Session Be fo re the JAD1 s ta r t s , requ i rement

checklists based on requirement specifications are

sent to all JAD team participants (as described in

section 3.3) asking what they need from the system

and the workflow of business processes that they

invo lved in the SME c lus te r . The funct iona l

specification and design specification are then

prepared. An extensible prototype is developed based

on the design specification. The extensible prototype

helps all JAD members to visualize how the system

wo r k s a nd g i v e s bene f i t s t o p a r t i c i p an t s .

Communication functions such as E-mail and SMS

are added to the system. After the JAD1 session has

finished, communication and information sharing

among members via E-mail and SMS take place.

Results from sharing experiences create tacit

knowledge among individuals. This “sympathized

knowledge” is created through the socialization

process. In the case of developing new products for

customers, new product ideas or specifications are

examples of the sympathized knowledge acquired

from sharing experiences through online discussions.

JAD2 Session

JAD2 session starts with the discussion of

new product ideas or specifications proposed in

JAD1 to create a draft of new product concepts/

models. Social networking functions such as social

network service (SNS), calendar, and file manager are

added to the system. After JAD2 session has

finished, discussion among the individuals and groups

takes place. New product concepts are proposed and

uploaded by several members into the system using

the Web 2.0 file manager. Calendar is also beneficial

for announcements and appointments during the

discussion. Through externalization, the results from

exchanging explicit knowledge create “conceptual

knowledge,” which is in the form of electronic files. In

t h i s c a s e , a n ew c e r am i c n o od l e b ow l i s

conceptualized as a “white, boat-shaped, and light”

product. Several product prototypes were sent into

the system to visualize how they best correspond to

the new product concept.

JAD3 Session JAD3 session starts with the discussion of

new product concepts and prototypes. Various

information and knowledge concerning new product

concepts such as the mixture of raw materials and

production processes are discussed. After JAD3

session has finished, the final version of the system

prototype with incremental functions of search tools

and FAQ is developed. Knowledge among individuals

is then exchanged and combined to reconfigure the

new product prototype with the existing information.

At this point, the collaborative activities among

members are deepened . The d i f fe rent tasks

concerning the production process are assigned to

selected cluster members. In this case, for example,

the clay-mixing preparation for producing a white

ceramic noodle bowl is given to the supplier, while

the molding and firing process is assigned to core

firms. As a result, the conceptual knowledge is then

transformed into the “systemic knowledge,” which is

the finished ceramic noodle bowl.

JAD4 Session

After the JAD3 session, the ceramic noodle

bowl is used in the customer marketplace. Various

suggestions about the product, in terms of its

benefits, problems, and limitations, are proposed and

shared. The operational knowledge learned from

practice is discussed in the JAD4 session. The 1st

cycle of the double spiral process with JAD has

ended and the next cycle can be repeated. Due to

the advance of technology and the dynamism of

business processes, additional software tools may be

added to system functions or the new system

development can be done in response to changes of

the new business process cycle.



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3.3 Identification of key players for JAD

team

On e o f t h e mo s t d i f f i c u l t t a s k s o f

collaborative software is to motivate users to use and

share information and knowledge. Even harder is to

make them use the system in a sustainable way.

Research on software failures has shown that two

major factors include: lack of user involvement

(12.8%), and incomplete requirements (12.3%) during

the design stage (Standish Group, 1995). Therefore, it

is essential to know the key players of social

networking in the cluster so that proper system

requirements can be captured. Since there are many

related firms and different types of users in SME

cluster, it is hard to develop IS to support every

individuals needs. By visualizing social networks in

cluster, it is possible to see the pattern of network

relationships. Social network analysis (SNA) is a

common method used to evaluate the availability and

distribution of critical knowledge. It is well used in

many cases of industrial cluster to understand linkage

among members (Bergman and Feser, 1999).

To identify social networking in cluster,

reputation methods, where a list of participants

proposed by knowledge experts (e.g.: cluster leaders),

are adopted. This approach is useful for the analysis

of networks across organizational boundaries (Müller-

Prothmann, 2007). Based on Porter’s definition,

industrial cluster comprises core firms, government

agencies and various supporting sectors along the

value chain of industry (Porter, 1998). A chain of

networking is, therefore, originated from key persons

of every sector who will recommend their social

network. The intensity of the relationship is also

considered to illustrate the strength of the ties

between members to determine whether it is strong,

medium, or weak (see Figure 5).

Figure 5: Identification of network key players

The questionnaire design aims to collect

social network data among ceramic cluster members

to identify the network relationships and strength of

ties. The questions include a list of the three most-

contacted persons, frequency and level of satisfaction

of communication, types of information exchange,

and sources of information. The questionnaires were

sent to all members of 6 groups of the Lampang

ceramic cluster (as described in Section 3). The

social network data is collected and analyzed using

social networking software. UCINET is one of the

social networking software used by many researchers



64

to analyze social networking relationships as it

supports different formatted text files, provides all

types of analysis functions, and requires minimum

hardware specifications (Huisman and Dujin, 2005).

Using NetDraw, the pattern of social networking can

be visualized and measured. By calculating degree

centrality, the extent to which a network is organized

around one or more central people, it is possible to

illustrate the role of individuals within social networks.

Figure 6 shows the degree of centrality of social

networking of the ceramic cluster in Lampang.

Mr.Anurak, for example, has the highest degree of

centrality with 16, representing the total connections

of cluster members from and to him. In this paper, a

total number of 10 persons from all member types of

the cluster who have a high degree of centrality are

selected as the key players of the JAD team to work

in the JAD sessions.

Figure 6: Degree of centrality of social networking within the ceramic cluster in Lampang

3.4 Application

The IS deve lopment i s based on the

r equ i r emen t spec i f i c a t i o n s and f unc t i o na l

speci f icat ions. PHP scr ipts are used for web

development, while MySQL is used to manage the

database system. As different types of users require

different information and are concerned with different

activities in the business process, customizing web

pages can be done individually. Figure 7 shows two

different web pages customized by individual users.

The web page on the left displays only a banner of

upcoming events while the one on the right displays

two events within a certain period. The customization

of the web pages can be done by each member,

based on their involvement in the SME cluster.

Background color, font color, and web contents are

also different. Therefore, only the information that the

individuals are concerned with will automatically

display on the web.

Figure 7: Customizable webpage



65

Social networking among cluster members

can be managed and customized individually (see

Figure 8). Individuals are able to invite, accept, reject,

and delete members within and between groups at

any time. E-mail, SMS, Calendar, file management,

and search tools are also useful features of designed

web pages for communication, knowledge sharing,

and collaboration among social network members of

SME cluster.

Figure 8: Social networking among members

4. Experimental Results The system experiment has been done with

the ceramic cluster members in Lampang. Three

types of collaboration scenario can be classified: 1-

to-1, 1-to-many, and many-to-many collaborations.

The scenario of 1-to-1 collaboration and 1-to-many

collaboration are illustrated.

4.1 The scenario of 1-to-1 collaboration

With collaboration between a specified firm

and the cluster development agent (CDA) from JAD1

to JAD4, a new practice of production process is

adopted. It is found that production efficiency

increases from an average of 8.0 to 10.6 items per

man-hour, a 33% increase (see Figure 9). This is

equal to an increase of 129,792 items per year, or

4,542,720 baht in revenue.

Figure 9: Production efficiency from 1-to-1 collaboration



66

4.2 The scenario of 1-to-many collaboration

In 1-to-many collaboration, the customer’s

new product requirement of ceramic noodle bowls is

initially proposed to the CDA. Preliminary information

is discussed and uploaded to the system during

JAD1. Online discussion among cluster members

begins after JAD1. Various product specifications,

such as style, shape, and color, are proposed from

several core firms’ members via e-mail. Final product

specification is selected in JAD2 session and different

versions of product prototypes are proposed after

JAD2 (see Figure 10). Final product prototype is

selected in JAD3 session and production tasks are

distr ibuted to var ious SME cluster members .

Collaboration on production is discussed after JAD3.

The product is used in the marketplace after JAD4

(see Figure 11) and learning takes place from

practice. Suggestions from cluster members have

noted that the top part of the noodle bowl is too

slippery to place the chopsticks.

Figure 10: Product specification and prototypes

4.3 Information system evaluation

In this paper, the performance assessment is

used to measure the effectiveness of the proposed

system. To support the c luster concept that

knowledge sharing and collaboration among the

clustering members are the key factors of cluster

development, the analysis of system performance

focuses on three measurement categories: the

increase in the number of active members in the

social network, the increase in the number of

collaborative activities, and the increase in the

number of knowledge inflows. The IS users were

Figure 11: Final product and product in use

asked to identify the increase level of those three

categories using the 5-point Likert scale. For data

analysis, the specified increase level of 1 and 2 is

combined and classified as low, 3 as medium, 4 and 5

as high. Forty-five questionnaires were distributed to

the respondents, but only 32 of them were returned. As

shown in Table 4, this indicates that 23 respondents, or

71.9%, have more active members in their social

network at a high level after using the system. A total

of 17 users, or 53.1%, have more collaborative activities

at a high level, as well as 25 users, or 78.1%, receive

more knowledge inflows at a high level.



67

5. Conclusion and future work

The main object ive of this paper is to

develop an information system that provides dynamic

and personalized web services for members within

SME cluster. The architecture of the IS focuses on

the dynamic functions on three aspects: response,

time, and event. Web 2.0 technologies and tools are

used for the IS development to provide social

networking communication and knowledge sharing

among the participants in VCoPs. The double spiral

process with JAD technique allows users to configure

their requirements during the JAD sessions. During

each JAD session, the IS functions gradually increase

through rapid prototyping development whi le

knowledge increases from sharing experiences

through system use. Collaboration takes place

t h r ough t h e e f f e c t s o f k now l edge sha r i n g

performance and the collaborative result will ensure

the cluster’s success.

Findings have shown that the number of

active members in social networking increases while

Performance categories* Increase level

High Medium Low

Increase in the number of active members in

social network

23 6 3

Increase in the number of collaborative activities** 17 10 5

Increase in the number of knowledge inflows*** 25 6 1

Table 4: The performance measurement of IS

* Performance categories refer to the key result areas that reflect a set of benefits and outcomes/ results that

individual users identified from sharing and collaboration through the use of the system.

** Collaborative activities refer to the activities that the cluster members work on together in order to complete a

shared task. A variety of activities such as developing a collaborative product can be based on 1-to-1, 1-to-

many, or many-to-many collaborations.

*** Knowledge inflows refer to knowledge that the individuals gain from knowledge sharing and collaboration.

knowledge inflows among members also increase.

Th is ind icates that the adopt ion of dynamic

information systems in SME cluster helps increase

communication and knowledge sharing. The increase

in the number of collaborative activities also assures

that the dynamic IS contributes knowledge creation

process where new knowledge is created at the end

of the double spiral process.

JAD sessions are typically manual processes

and the scat tered JAD members rare ly have

committed time for every JAD session. In future work,

therefore, it is possible to extend JAD sessions to an

automatic JAD. This “JAD Automation” process can

be done in several ways. Virtual JAD sessions

supported by video conferencing applications are

alternat ive. Mobi le technology is also helpful .

Moreover, for knowledge-based economies, where

the deve lopment o f web techno log ies , web

applications, and knowledge contents is at a high

speed of growth, i t is recommended that the

organizations should rapidly apply the management

approach, the IT approach, and the structural



68

approach in their business process functions to

compete in the severe market.

The dynamic IS seems to be beneficial to

the SME f i rms tha t have s t rong po l i c i es i n

technology. The small SME firms, having small

inves tments in new techno logy , may not be

successful. Therefore, it is the responsibilities of the

CDA to give support to all the clustering members to

realize the importance of the IS. The CDA should also

act as a web manager in providing and responding to

the informat ion shared on the web. This wi l l

encourage the dynamism of the web through which,

in turn, the cluster development can be sustainably

achieved.

6. Acknowledgment The author gratefully acknowledges the

cont r ibu t ions o f Dr . Nopas i t Chakp i tak and

Dr.Pharadorn Sureephong for their suggestions to the

work of this paper. The author also would like to thank

the support of Yonok University and the College of

Arts, Media and Technology, Chiang Mai University.

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