Knowledge worker aggregation: Case

This case centres on an online aggregation including know ledge w orkers, predom inantly in the IT sector. The case narrative com prises three elem ents, nam ely a professional association (trusted third party), a com m unity m anagem ent application service provider (ASP) and a survey o f users and non-users. Initially the professional association was approached before gaining access to the ASP who assisted in surveying the user com munity. The selection o f non-users w as independent o f these participants.

5.4.1 N arrative

Over the last decade the U K G overnm ent has identified the im portance o f the ‘know ledge econom y’ as a m eans o f achieving econom ic growth. V arious initiatives have been developed to support the role o f the know ledge w orker w hether operating as an individual or in an organisation. There w as a m arked trend for individual know ledge w orkers to m ove towards freelance or contractor w orking patterns. This enabled skills to be transferred, through individuals, betw een organisations and prom oted highly flexible em ploym ent markets. W hilst the D epartm ent o f Trade and Industry developed policies and initiatives to prom ote the developm ent o f the know ledge-driven econom y, the T reasury sought to provide a fair fram ew ork to tax individual know ledge w orker’s income. The introduction o f 'interm ediaries legislation' IR35, in April 2000, sought to elim inate ‘disguised em ploym ent’ w here em ployers could reduce their tax liabilities. It allow ed for fees paid to a com pany or partnership to be treated as an individual’s personal salary. It was believed that this single tax m easure severely dam aged the initiatives prom oting know ledge w orking and as a result various organisations attem pted either to have IR35 repealed or m odified to recognise the changing nature o f em ploym ent in the know ledge economy.

Chapter 5: Aggregation cases

The aggregation formed as a direct result o f changes to U K tax legislation w hich affected the consultancy industry. A new trade association, consisting o f know ledge workers, em erged in order to support m em bers w ishing to change tax legislation. V ery early on in its developm ent the know ledge w orkers trade association (KTA) recognised the need to support high levels o f interaction both betw een the K TA and its m em bers and betw een the m em bers them selves. This need w as m et by an A SP developing and hosting a com m unity m anagem ent application.

The com m unity m anagem ent application service provider (CM P) w as a software developm ent com pany based on the south coast o f England, w hich provided online com m unity m anagem ent applications prim arily to trade associations typically consisting o f know ledge w orkers, such as engineers and tax advisers. The com m unity m anagem ent application hosted for the know ledge w orkers trade association (K TA ) provided a range o f services to m em bers, including e-newsletters, discussion forums, content m anagem ent, dow nloads and adm inistration. There was a service level agreem ent betw een the CM P and the KTA, w hich paid directly for the provision o f the com m unity m anagem ent application. The CM P had a close w orking relationship w ith the K TA w hose m em bers assisted in the developm ent o f the application by actively providing suggestions for im provem ents. The m anaging director acknow ledged that in m any w ays the functionality o f the com m unity m anagem ent grew in parallel w ith the increased dem ands o f the KTA. Im portantly the application supported interaction betw een m em bers and allow ed key m em bers to m oderate or m anage sub-groups. This resulted in the generation o f highly focused content by some m em bers w hich w as accessible to all members. CM P m arketing strategy w as to deliberately prom ote their com m unity m anagem ent application to trade associations and

Chapter 5: Aggregation cases

other key interm ediaries involved with m anaging highly interactive groups such as know ledge workers.

The K TA w as a professional trade organisation set-up to represent the interests o f know ledge based w orkers. It was the fastest grow ing professional organisation in the UK with over 10,000 m em bers signing up in its first year. The K TA w as form ed in M ay 1999 to provide independent contractors and consultants w ith a representative voice in opposition to new tax regulations. H ow ever it developed from this single-issue cam paign to a full professional body, representing contractors’ interests and lobbying on regulatory issues in a w ide variety o f sectors including oil and gas, engineering, telecom m unication, pharm aceutical and IT professionals. This latter group m ade up the m ajority o f the mem bership. The K TA defined a know ledge-based w orker as a “professional person who com pletes a task using intellect and experience rather than m achinery and tools”.

The ch ief executive personally founded the association w hen he received hundreds o f e-mails in response to a simple w ebsite protesting about the new tax legislation affecting know ledge-based workers. He quickly realised that he could not be the link betw een the governm ent and know ledge w orkers. The association attem pted to provide a platform on w hich m em bers could interact and organise action. The general secretary stated that he was “overw helm ed by the response” to his original w ebsite but w as able to co-ordinate the launch and receive enough finance from m em bership fees to provide som e technology to support interaction. The CM P w as com m issioned to develop a hosted application w hich could support both high levels o f m em ber interaction and the adm inistration o f the association. The ch ief executive gave an exam ple o f how this platform w as able to galvanise m em bers in response to a call to attend a lobbying m eeting in the H ouse o f

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Comm ons. This involved, at short notice, dissem inating advice and plans and resulted in a significant num ber o f mem bers gaining access to M em bers o f P arliam ent during a debate on the new legislation. It w as the interview ees’ view that the ability o f the association to act so quickly and decisively w as as a result o f the com m unity m anagem ent application and had an im m ediate effect on public awareness. The association quickly established itself as the leading organisation representing the interests o f know ledge w orkers and offered additional services to members. The m em bership fee included a w ide range o f services including draft contracts, legal and tax advice, lobbying and access to the com m unity m anagem ent application. The K TA was run by an executive group elected by the m em bers and w as trusted by them to act in their best interest. The interactive nature o f the group reinforced this trusted relationship by prom oting m em ber feedback.

5.4.2 Analysis

1. M icro-level ties

Resource flo w s through activity links: A shared inform ation asset (know ledge base) was created as part o f the interactions betw een the KTA, the CM P and the know ledge w orkers, w hilst existing resources appeared unaffected. The K TA recognised this asset as a valuable resource in the existing aggregation for retaining existing and recruiting new users.

M utual expectation with resilient trust: The em ergence o f the K TA w ent hand in hand w ith the provision, by the CM P, o f the com m unity m anagem ent application. The application supported the establishm ent o f the relationship betw een the K TA and the know ledge workers. A doption can in part be attributed to resilient trust, evidenced by a lack o f service level agreem ent betw een the know ledge w orkers and the CMP.

Chapter 5: Aggregation cases

Inform ation flo w s supported by catalysts'. The crucial role played by the provision, by the CM P, o f the com m unity m anagem ent application in facilitating and shaping the formation o f the online aggregation was evident in this case. It reinforced the inform ation flows w ithin the aggregation. There w as strong evidence o f the facilitation role o f the K TA both by initiating, funding and prom oting the use o f the application.

2. Economic

N ature o f transaction with value activity: The com m unity m anagem ent application increased the structure o f the inform ation com ponent o f the interactions betw een K TA and know ledge w orkers. The application increased the perceived value and reduced the costs o f repeated interactions betw een know ledge w orkers and the K TA and betw een know ledge workers.

Cost o f netw orking: K now ledge w orkers had to the bear any cost associated w ith Internet connectivity. K now ledge w orkers paid an annual subscription to the K TA w hich included the use o f the com m unity m anagem ent application.

3. Strategic

M otivation: All participants w ere m otivated to engage in the com m unity m anagem ent application. The K TA believed that they w ould achieve cost savings and transparency w hilst know ledge w orkers recognised the opportunity for increased interaction w ith each other and the K TA, w hich supported their business needs. The CM P generated revenue from the K TA and other clients.

Perspectives'. The K TA identified im portant long-term benefits from using the application and their decision can be considered as strategic in nature. W hilst know ledge workers

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recognised the im portant role the application played in supporting their business activities it was seen as part o f the total benefits derived through m em bership o f the KTA.

Contingencies: A t an institutional level the K TA played the central role in the form ation o f the aggregation as the organisation that identified and m et the need for interaction by procuring the com m unity m anagem ent application. At a relational level it can be seen that relationships betw een the K TA and know ledge w orkers inferred trust in their choice o f the online application provided by the CMP.

4. Governance

Intellectual property rights: The value o f the new shared know ledge base was acknow ledged by the K TA and formed part o f their business strategy for retaining existing and recruiting new mem bers. O nly a limited am ount o f inform ation w as accessible to non­ m em bers visiting the w ebsite. The m em bers also valued this know ledge base for their own benefit. A service level agreem ent existed betw een the K TA and the CM P.

Co-ordinations mechanism: There was a service level agreem ent betw een the K TA and the CMP. The know ledge w orkers used the application w ithout a service level agreem ent w ith the CM P thus deferring direct control o f this governance m echanism to the KTA.

5. Diffusion o f innovations

Change agent: The executive m em bers o f the KTA played an im portant role in the recruitm ent o f m em bers to the com m unity m anagem ent application. T hey ensured that the application w as used to dissem inate inform ation from the association to m em bers and facilitate the operation o f the association. They recruited m oderators and contributed to the discussion forum.

Chapter 5: Aggregation cases

Critical mass'. The use o f previously identified m ethods for increasing adoption o f interactive innovation was identified. The K TA prom oted the application through executive m em bers and key m oderators thus targeting the leading individuals, used the application to dissem inate inform ation and conduct operations thus shaping the know ledge workers perceptions and the use o f m oderated forums addressed aggregations.

Intermediaries'. The K TA played a crucial role in achieving the engagem ent o f know ledge workers. It acted on b eh alf o f m em bers to negotiate w ith the CM P. The developm ent o f the online com m unity m anagem ent application by the CM P was a prerequisite to the form ation o f the aggregation and an im portant factor in the growth and success o f the KTA.

This case highlights the im portance o f the relationship, in this case non-exclusive, betw een the application service provider (CM P), the trusted third party, and know ledge w orkers trade association (KTA), in the adoption o f the online com m unity m anagem ent application by an aggregation o f know ledge workers. The C M P ’s online application supported the business needs o f the K TA and know ledge w orkers in carrying out their business activities, w hich the m ajority o f users confirm ed was o f im portance to their businesses (58%). The K TA initiated the application developm ent w ith the CM P, how ever users subsequently becam e involved in this process. The continuous im provem ent o f the application was a result o f the interaction betw een the KTA, the CM P and m em bers. The m em bers relied on the K TA to negotiate and m anage the service level agreem ent w ith the CM P and there was no direct cost to the know ledge w orkers for using the application. The K TA paid the CM P to provide the application.

Chapter 5: Aggregation cases

From the survey o f kn o w led g e w orkers using the co m m u n ity m an a g e m e n t application, users had very high levels o f daily IC T usage (100% ) com p ared to non -u sers (75% ), w ho had v e ry low levels o f aw areness o f hosted aggreg atio n -sp ecific ap p licatio n s (8% ). T he C M P ’s o nline ap p lication p ro vided new functionality to all users w ho tru sted the C M P and felt it w as co m m itted to p ro viding the application, T able 5.3. U sers co uld be ch aracterised as feeling part o f a bu sin ess n etw ork (67% vs. 35% ), h av in g a v e ry p o sitiv e attitude (90% vs. 62% ) to and good kn o w led g e and experience (78% vs. 48 % ) o f e-b u sin e ss than n o n ­ users. U sers largely agreed that e-business im proved efficien cy (89% vs. 62% ) and enabled new w ays o f b u sin ess (72% vs. 57% ), T able 3, A ppendix V. U sers w ere m ore engaged in e-business reg ardless o f application com plexity, F igure 5.4.

Figure 5.4. E-Business engagement by knowledge w orkers.

100% i ■ Non-users ■ Users 75% - Si 50% - 25% - 0% 9 10 11 8 6 7 5 3 4 1 2 1. Communication 2. Marketing 3. Productivity 4. E-Commerce (buy) 5. E-Commerce (sell) 6. E-Commerce (pay) 7. Collaboration 8. Enterprise 9. Marketplace 10. Collaborative Enterprise 11. Collaborative Platform Application Complexity

T his specific ag g reg atio n exhibited m any ch aracteristics associated w ith IO N s in particu lar at a m icro -lev el the resource flow s through activity links of the shared in fo rm atio n asset, evidence o f m utual ex p ectation w ith resilient trust leading to a lack o f service level agreem ent w ith k n o w ledge w orkers and inform ation flow s sup p o rted b y th e cataly st role o f trusted third parties and inter-organisational inform ation system s. G o v e rn a n ce m ech an ism s

Chapter 5: Aggregation cases

w ere not form alised for intellectual property right o f the inform ation repository and no service level agreem ent existed w ith the m em bers and the CM P. The econom ic effects o f the applications w ere to increase the structure o f the inform ation com ponent and the perceived gain w as greater than internal and external costs. At a strategic level participants w ere m otivated by longer term objectives, m ultiple perspectives converged on the engagem ent in the application and there w as institutional and relational level support for engagement. This case also identified the creation o f an inform ation repository, w hich could be exploited by the trusted third party (KTA) as an em ergent property o f the aggregation. There w ere characteristics associated w ith the diffusion o f netw orks evident by a change agent, critical m ass building and interm ediaries. The use o f the e-aggregation application by the know ledge w orkers significantly increased the degrees o f integration and supported structure w ithin the aggregation. The e-aggregation application provided a standardised form at in w hich inform ation w as exchanged betw een know ledge w orkers and