Deutsche Bank: Leveraging Human Capital with the Knowledge Management System Hrbase

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Deutsche Bank: Leveraging Human Capital with the Knowledge Management System HRBase Hauke Heier European Business School, Germany Hans P. Borgman Leiden University School of Management, The Netherlands

EXECUTIVE SUMMARY The case study describes the issues surrounding the development and global rollout of the Intranet-based Knowledge Management System (KMS) HRbase at Deutsche Bank. It sets the stage for a decision situation that Deutsche Bank’s Global Head of Human Resources (HR), Heinz Fischer, faced in 2001. Based on low usage rates and ambiguous feedback from his 15 most senior HR executives, he had to decide about HRbase’s future: it would either be funded from an earmarked budget in 2001, changed significantly, or discontinued. Meanwhile, the responsible project manager Hilger Pothmann and the HRbase project team understood the necessity to turn the project around and to come up with a proposal for technical improvements and a sound change in management strategy. The case description provides a chronological account of the planning, development, and global rollout of HRbase, paying specific attention to project This chapter appears in the book, Annals of Cases on Information Technology 2004, Volume 6, edited by Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written Mehdi Khosrow-Pour. Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic permission of Idea Group Inc. is prohibited. forms without written permission of Idea Group Inc. is prohibited.

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management issues, change management interventions, and the global cross-cultural challenges that emerged.

ORGANIZATION BACKGROUND Deutsche Bank, headquartered in Frankfurt, Germany, was among the leading financial service providers in the world. With total assets under management of EUR 840 billion and a net income of EUR 2.6 billion in 1999, it was Europe’s industry leader with a significant market presence in the United States, as well as a presence in most other parts of the world. Exhibit 1 shows Deutsche Bank’s financial performance from 1997 to 1999. In 1999, over 93,000 staff were employed, some 42,000 of those outside Germany. However, even in the bright light of the financial results, the competition within the global banking industry had become fierce. The Internet and the advent of E-Business presented Deutsche Bank with severe challenges, but also with many opportunities: its markets were becoming more transparent, information and transaction costs continued to fall, and the number of distribution channels increased. Deutsche Bank accepted EBusiness as a key to its future and an integral part of its strategy. In 1999, Deutsche Bank was in the process of changing its technical infrastructure to supplement or even replace the bank’s traditional access to the customers. The corporation started to partially transform traditional marketplaces into electronic marketplaces and planned to increase its global reach by adding direct selling capabilities. Aiming to become the best financial services provider in the world and to benefit from the diversity of its employees with multiple cultural backgrounds, Deutsche Bank started the internal communications campaign “Our Identity” in 1999 with the goal to embed a common set of values into the corporate culture: customer focus, teamwork,

Exhibit 1. Deutsche Bank’s Financial Performance from 1997 to 1999 (EUR in millions) Net interest income Provision for losses on loans and advances

1999

1998

1997

6,619

5,539

5,689

616

835

1,102

Net interest income after provision for losses on loans and advances

6,003

4,704

4,587

Net commission income

8,084

5,311

4,569

Trading profit

4,761

1,774

1,841

385

336

311

2,007

1,182

469

15,746

10,121

9,347

4,971

4,032

2,315

884

-

1,271

Income taxes

1,516

2,306

523

Net income

2,571

1,726

521

Net income from insurance business Net income from investments General administrative expenses Profit before expenses for restructuring and taxes Restructuring expenses

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Exhibit 2. Deutsche Bank’s Mission and Core Values (Our Identity) Deutsche Bank is dedicated to being the best financial services provider in the world. We endeavor to make maximum use of our unique breadth of experience, capabilities and financial strength to create value for our customers, shareholders, employees and society as a whole. In achieving this mission we operate by these core values: š Customer focus: We place customers at the center of our activities and they drive all that we do. š Teamwork: We benefit from the diversity of our business and our people by working together to achieve success. š Innovation: We are constantly challenging conventional wisdom and developing new solutions to meet customer requirements. š Performance: We are committed to a result-oriented culture. š Trust: We behave reliably, fairly and honestly.

innovation, performance, and trust. Exhibit 2 shows Deutsche Bank’s mission statement and core values. Heinz Fischer, Deutsche Bank’s Global Head of Human Resources (HR) emphasized the significance of the communications campaign: “Shared values provide stability in the dynamics of change, but also permit cultural adaptation”. Deutsche Bank’s Board of Managing Directors ran the company along the lines of a virtual holding company, composed of five group divisions with independent profit responsibility: Asset Management, Corporates and Real Estate, Global Corporates and Institutions, Global Technology and Services, as well as Retail and Private Banking, which were complemented by an overall Corporate Center, including the HR Division. As the common thread running through the virtual holding company, the Corporate Center ensured uniform group-wide policies and regarded itself as a services provider, performing a cross-divisional umbrella function (Deutsche Bank, 2000a, pp. 3-7). Exhibit 3 shows Deutsche Bank’s organizational structure.

Exhibit 3. Deutsche Bank’s Organizational Structure

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The HR Division’s responsibilities included the development of talents and knowledge of Deutsche Bank’s employees in accordance with the strategic business model and in cooperation with the employees and their supervisors. The employees were responsible for personal and career development, supervisors would constantly support and challenge them, and the corporate HR Division would supply advice, processes, tools, and products. Those included corporate development, staffing, personnel development, compensation and benefits, and supporting processes such as personnel information systems (IS). To provide all services, some 1,800 staff were employed, 1,000 of them in Germany (Deutsche Bank, 2000b, pp. 2-15).

SETTING THE STAGE The case study describes the issues surrounding the implementation of the Intranet-based Knowledge Management System (KMS) HRbase at Deutsche Bank over the period 1999-2001. It sets the stage for a decision situation that Fischer faced. Based on low usage rates and ambiguous feedback from his 15 most senior HR executives (HR Board members), Fischer must decide about HRbase’s future: it will either be funded from an earmarked budget in 2001, changed significantly, or discontinued. The case description provides a chronological account of the planning, development, and global rollout of HRbase, paying attention to project management issues (e.g., Keil, 1995), change management interventions, and the global cross-cultural challenges that emerged (e.g. Kersten, Matwin, Noronha, & Kersten, 2000). The initial for HRbase was developed in 1999. Since Deutsche Bank’s HR Division was engaged in a great variety of services, mirrored by many functions and reporting lines, a need for more transparency, improved communication, and a better management of knowledge arose. Hence, the innovative department HR Kinetik was founded and headed by Hilger Pothmann, HR Director. According to their mission statement, they were “a uniting and coordinating mechanism that assists and facilitates the synchronization and efficiency of the different elements within HR, enabling them to deliver value greater than the sum of their parts”. Exhibit 4 shows the HR Division’s organizational structure. When Inga Senff joined HR Kinetik as an intern in August 1999, she aggregated information about the HR Division’s organizational structure, the HR employees, and their functions in a Microsoft Excel spreadsheet. HR Kinetik made the attempt to compile names, job roles, and contact information of every employee in order to make the organizational structure and employee functions more transparent. Up to that point, only an augmented version of an HR phonebook was planned. Soon it became obvious to Senff that the information quality was not sufficient for the task: the HR Division had neither a classification of functional roles, nor a data maintenance strategy. Together with Pothmann, Senff wondered if Deutsche Bank’s corporate Intranet could be used as a platform technology to foster knowledge management within the HR Division. The intention was to collect and distribute knowledge about employees, e.g., career phases, skills, interests, languages, and details of current roles or projects, and knowledge about the HR Divisions’ organizational structure, e.g., business units and geographical regions served. All employees and teams should be held responsible for

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Exhibit 4. The Human Resources Division’s Organizational Structure

regular updates. Central data quality maintenance, e.g., in spreadsheets and orgcharts, had proven unfeasible. The project idea for HRbase emerged as a result. A true Intranet-based KMS, the networking tool HRbase was designed to enable and facilitate the exchange of knowledge and interaction among the HR staff. Pothmann envisaged “a way to manage and leverage human capital more effectively and proactively across divisions.” The plan was made to develop HRBase according to a traditional lifecycle methodology for systems development. The overlap of the project stages “systems design” and “programming” shows also some use of a prototyping approach (Laudon & Laudon, 2002, pp. 316-323). Since the IS did not replace an existing system, there was no true “conversion” stage.

CASE DESCRIPTION Systems Analysis The project stage “systems analysis” lasted from August 1999 to the end of December 2000. Objectives were to define the problems the HR Division faced, to specify the technological solution, and to identify the information requirements of prospective Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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users and managers. Pothmann and Senff interviewed various members from the HR Division to gather their input, both generalists and specialists. Some of the participants were chosen because they had already gained experience in change management projects or the development of IS. After the often lively interview sessions, Pothmann and Senff agreed on two main applications of the Intranet-based KMS. First, HRbase should serve as a corporate directory for the mapping of internal expertise. The IS would be an easily accessible and searchable repository of HR employees’ profiles, containing skills and experiences. All HR people should be able to set up personal home pages and dedicated sub pages for current HR projects. Second, HRbase should foster the creation of knowledge networks. Employees could meet physically and virtually to exchange and amplify knowledge in communities of practice. The option of adding a document repository for the coding and sharing of best practices — often found in KMS — was seen as less important due to a perceived lack of standardized HR processes (see Alavi & Leidner, 2001, for a typology of KMS). According to Pothmann, the HR Division seemed to be rather process-oriented and focused on standard work in 1999. The Intranet-based KMS should facilitate a more advisory and consultative approach by acting as an information service provider. All relevant knowledge was supposed to be accessible though a common platform. Search and messaging functions should speed up the management of organizational knowledge. The planned IS was supposed to accomplish the following objectives. First, HRbase should make the department’s structure more transparent, with information on reporting lines, functions, and titles. Second, HRbase ought to foster a better communication within the HR Division through the establishment of formal and informal networks. People should recognize that they worked in an “HR Community.” Sharing personal information and photos was supposed to facilitate the creation of informal networks, whereas individual work experiences helped to establish formal networks. Third, HRbase ought to help the value management in the HR Division. Pothmann and Senff were convinced that the “HR Community” would contribute to a culture of trust, innovation, and teamwork. Fourth and last, HRbase would reduce project costs, as improved knowledge sharing diminished project redundancies and dependency on external consultants. Since internal resources were not available, an external consultant conducted a feasibility study to determine whether the proposed solution was achievable from a financial, organizational, and technical standpoint. He concluded that Deutsche Bank’s technical infrastructure was suitable for HRbase. IS already established or planned — such as the Global Directory (Yellow Pages) — would support appropriate protocols to implement the IS. There was also sufficient bandwidth available to support remote access. The one time out-of-pocket costs of HRbase were estimated at some EUR 250,000, including: external personnel costs, the preparation of detailed specifications, documentation, minor software purchases, quality management, testing, and the first year maintenance charges. If Lotus software was used for the Intranet-based KMS, no further charges would occur since Deutsche Bank had already purchased a corporate license. The external consultant paid specific attention to motivational problems concerning the adoption and usage of the Intranet-based KMS, dividing them into three parts: cultural, organizational, and business issues. For cultural issues, he noted that some individuals in Deutsche Bank were not used to sharing knowledge; sometimes they even

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had an inclination not to share. For HRbase this could imply free-rider morale with users benefiting from the system without contributing input. The consultant cited Hibbard & Carrillo (1998): “Getting employees to share what they know is no longer a technology challenge – it’s a corporate culture challenge” (p. 49). Many different, local in-house practices, which limit the value of shared knowledge, were mentioned as organizational obstacles to the implementation of HRbase. The consultant considered different languages and local legislation as important problems. With regard to business issues, the consultant established that the business model could affect the users’ motivation. The closer the Intranet-based KMS would be connected to the business, the more likely it would succeed. Organizations with no strong business focus would find it more difficult to motivate people to leverage knowledge (see Davenport & Prusak, 2000, chap. 8, for a discussion of KM success factors). The consultant believed that usefulness to the individual was the key to success. When the project team presented the results of the feasibility study and a Microsoft PowerPoint mockup, it became difficult to obtain financial support for the development of HRbase. In 1999, Deutsche Bank mainly focused on the implementation of Internetbased E-Business applications. Its objectives were to supplement, or even to replace, the traditional access to customers, and to reach for new market territories by the means of E-Business. Therefore, Intranet-based KMS ranked lower in importance than E-Business projects. For funding, Pothmann approached his supervisor Dirk Dekker, Head of HR International and HR Board member. Once again he stressed the likely efficiency gains, convincing Dekker to cover all expenses. To further increase the chances for success, Pothmann won two additional HR Board members as project sponsors. They ought to demonstrate commitment to the project, set up personal home pages, and later encourage their teams to do the same.

Systems Design The project stage “systems design” began formally in February and lasted to the end of May 2000. The main tasks were to devise technological specifications in order to meet the requirements identified during “systems analysis”, to plan for the IS’ internal marketing, and to get the project team ready for prototyping. Pothmann and Senff took over the responsibility for project management and decided to expand the HRbase team with additional staffing. From the beginning in February, until the end of HRbase’s development, at least one intern provided full-time support. The project team made the decision to contract with Deutsche Software - an Indian Deutsche Bank subsidiary responsible for the development of IS in banking and finance - for the development of the Intranet-based KMS. Comparing Deutsche Software’s proposal with external offers, it became clear that it promised the most value for the price. Moreover, HRbase would have violated one of its own objectives — to reduce the dependency on external consultants — when hiring an external contractor. On a part-time basis, an in-house consultant served as project technologist. His tasks included the provision of technical support for the project and to serve as contact point to Deutsche Software. In addition to the project team, several project associates made important contributions. A senior project manager from the group division Global Technology and Services served as facilitator and designer. She provided advisory support to Senff and was responsible for conducting workshops and questionnaires. Two British consultants Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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from a knowledge management and change management consultancy, based in London, provided advisory support to the project and helped to anticipate and manage issues in advance. The consultants were involved only in the first two project stages. In addition, the HRbase team was supported from several regional associates serving as local points of contact outside Germany. The involvement of additional stakeholders had two main reasons: first, their business priorities and information needs should drive the system development effort; second they should later champion both the pilot project and the final rollout. Participative development should further foster a sense of ownership and help users to form realistic expectations about the IS (see Ginzberg, 1981; Tyran & George, 1993, for a discussion on user involvement). All regional associates had the same background — with regard to their national culture — as the employees they were supposed to train later.

Programming The project stage “programming” was conducted almost in parallel to “systems design” and had no direct user involvement. The goals were to rapidly develop a working prototype, to select pilot users for the “testing” stage, and to prepare marketing materials. Besides the German project team, supported by the British consultants, the Indian programmers were the only employees participating in the implementation of HRbase. Senff held discussions on a regular basis with the IS programmers to ensure that the functionality reflected the latest developments in the HR Division. The choice was made to design a Lotus Domino application since Deutsche Bank had used this platform satisfactorily for several years and there would thus be no additional licensing costs. Furthermore, a common infrastructure made it easier to leverage IT expertise and to exchange data with existing IS, e.g., Deutsche Bank’s Global Directory (Yellow Pages) that HRbase should later use to retrieve the employees’ contact information to avoid data redundancies. Lotus Domino is a widely used platform for collaborative E-Business applications. Its features include Internet messaging, directories, and expanded web application services, all in compliance with Internet standards (Lotus, 2001). Lotus Domino offers built-in connection services to provide access to relational databases, transaction systems, and Enterprise Resource Planning (ERP) applications, i.e., firm wide IS integrating key business processes and information flows across business functions (Laudon & Laudon, 2002, pp. 54-59). Deutsche Software chose Lotus Domino Release 5.0.2b both on the server and the client side, and a Microsoft Windows NT platform for the server. On the client side, the HR employees would have access through Netscape Communicator 4.6 or Microsoft Internet Explorer 5.0 (or higher). Deutsche Software used a prototyping approach to translate the “systems design” requirements into software code. The working prototype could later be enhanced and/or revised based on the pilot users’ feedback. It would become an operational prototype as soon as it accurately reflected all user requirements. Simultaneously to HRbase’s programming, pilot participants were selected for the next project stage. At first, HR employees known to the project team members were asked to participate in HRbase’s pilot testing. When Senff detected geographical regions without any voluntary participants, she asked local supervisors personally whether they would be willing to nominate some of their employees as pilot users. It was necessary to include users from all important geographical regions to ensure that the IS technically Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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worked worldwide. The project team decided to keep the number of participants relatively low (approximately 100 employees) because the system was not reliable and up to scale. Moreover, every pilot user needed personal training and support. The HRbase team made sure that there was a good cross-representation of geographical regions, divisions, and functions in the “testing” stage. Consequently, the pilot users would have different cultural backgrounds, but plans for cross-cultural testing were not made. By participating in the pilot tests, the group divisions should get the feeling that their feedback was valued and that they had an influence on the system-development effort. The project team had the feeling that it would almost be impossible to get a later buy-in once the group divisions felt neglected. After the pilot users had been identified, the project team started to develop marketing materials outlining the role of the participants and designed an Intranet site to provide feedback and information. The final preparations for the next project stage dealt with the preparations for the kick-off workshops and the design of a questionnaire to collect the pilot participants’ feedback: both tasks were carried out by the German project team.

Testing The project stage “testing” started in June 2000 and lasted for two months. Major tasks were to motivate pilot participants, to help them register for HRbase, and to generate activities to test the system. The project team was curious whether the Intranetbased KMS would produce the intended results in a known environment. Early in June, Pothmann made his first presentation about HRbase to Fischer. Very satisfied with the IS’ functionality and outline, Fischer soon became the main project sponsor. He often hinted in regular meetings that HRbase would be a recognized source for the sharing of experiences and knowledge. Before the Intranet-based KMS was ready to be populated with pilot users, the HRbase team conducted thorough tests of the development system, which started on June 5, and lasted until June 19, 2000. They made sure that the working prototype provided the full functionality needed by the pilot users. After the preliminary testing was completed, the project team members held six introductory workshops for the pilot participants to communicate both the goals of the HR Division in general, and the goals of HRbase in detail. Already based in the United Kingdom, the senior project manager from Global Technology and Services organized workshops in London. Pothmann held workshops in New York, a city where he had worked before, and Senff conducted two workshops in Frankfurt. Telephone conferences were held for the remaining participants. All users were handed an information package that provided an overview about the users’ task, the rules for the “testing” stage, a questionnaire for feedback, and a small present for the users’ effort. To encourage the testing of the IS, a treasure hunt game was used. Everybody was encouraged to provide as much feedback as possible, and to be absolutely honest when bugs were found in HRbase. Moreover, the pilot users were intended to serve as multiplicators, to spread the word about HRbase’s benefits and features among their colleagues. The project team considered this snowball approach to marketing as a cost-effective change management measure: the HR employees’ geographical distribution precluded direct and comprehensive motivation and training. The pilot participants served two important tasks: they tested the features and technology of HRbase, and provided helpful ideas on how the Intranet-based KMS Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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should be introduced to the whole HR Division. Pothmann and Senff believed that the implementation process should model the desired shift in corporate culture - the system alone would not produce the change. It was necessary to find out how people could be encouraged to set up their individual home page and to use the IS. For that purpose, a test of the current HR culture from questionnaires and focus groups had been planned. It was, however, never carried out due to a lack of time and of financial resources. A milestone was set at the end of June to compile the participants’ feedback, to develop a plan for the final rollout, and to present an update to the project sponsors, who subsequently decided to continue the project. Generally, the feedback was favorable, but with some suggestions for improvement. For example, pilot users mentioned the need for a more intuitive user interface, also in other languages besides English. Especially German employees lacked English language skills and were reluctant to use IS in foreign languages. Some participants criticized that private information should not be required, since they had privacy concerns and claimed that it made the IS lose its seriousness. They complained that HRbase offered no added value to HR work, because it had not yet been linked with other IS. However, some pilot users were convinced that the system would help to establish an “HR Community” or HR culture as intended in HRbase’s conceptualization. Cross-cultural awareness, i.e., an acceptance of different cultural perspectives and open communication, would bring a new quality to the generation of innovative ideas and to problem solving.

Global Rollout The final project stage “global rollout” began in July and lasted until December 2000. Its main objectives were to review the “testing” stage and to plan and conduct the final deployment. Based on the compiled pilot user feedback, Deutsche Software began with functional changes in the development system. In the meantime, the HRbase team refined the plan for the Intranet-based KMS’ full rollout. Senff started to identify pilot participants who were willing to act as team champions or regional champions. On the one hand, the champions were selected because they were personally known to the HRbase team; on the other hand, because they thought positively about the IS. Senff kept the pilot champions constantly involved via regular progress updates and additional learning sessions. Nevertheless, their buy-in was not sufficient to ensure success up to that point. The HRbase team believed that additional awareness marketing was needed to convince the HR employees of the IS’ benefits. At that point, Pothmann and Senff decided to hire a German advertising agency to prepare the launch of HRbase at Deutsche Bank’s yearly International HR Conference. The project team thought very favorably about the innovative campaign the advertising agency had developed. In September, the out-ofpocket development and marketing costs of HRbase already amounted to over EUR 600,000, in addition to a significant use of internal resources. Even though the final costs were considerably higher than the costs estimated in the feasibility study, Dekker remained supportive of the project and authorized further spending. Together with the project sponsors, Pothmann and Senff considered recruiting 1,200 HRbase users until the end of the year, an ambitious but achievable goal. Deutsche Software finished the last version of the working prototype, and the project team conducted the final tests to ensure readiness for the full rollout. On September 20, a copy of the working prototype Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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became the operational prototype, ready to be populated with the HR employees’ data. Deutsche Software copied the pilot participants to the new system and informed them of HRbase’s go-live. On September 25 and 26, the Intranet-based KMS was officially launched at Deutsche Bank’s yearly International HR Conference, attended by approximately 130 global HR advisors. During the “global rollout” stage, the HRbase team cooperated closely with Deutsche Software to tackle technical problems as soon as they arose. Soon after the rollout had started, the project team was shocked when technical problems hindered some HR employees to use HRbase. Especially the application process for an Intranetpassword proved to be difficult. After some technical investigations it became clear that certain employees had no access to HRbase due to an incompatible technical infrastructure. The same held true for the Bankers Trust employees, a financial service provider that had merged with Deutsche Bank in 1999. The Lotus Domino systems of both companies did not interface well. There was insufficient use during the “testing” stage to fully check the system’s functionality and deficient information from the group division Global Technology and Services. Whereas the bigger technical problems persisted, smaller challenges were resolved and the IS was rolled-out as planned. As the project team leader, Pothmann decided to chose pull tactics to get as many HR employees onto the system as fast as possible. On a global scale, some 20 pilot champions approached the HR employees to set up their individual home page. They communicated HRbase’s advantages and provided training and support for their fellow colleagues. Seven student trainees, hired on an hourly basis, provided similar services to encourage HR employees in German branches to register for HRbase. From the HR Board members, mainly Fischer and Dekker showed executive commitment in this last project stage. At the end of January 2001, the HRbase team celebrated first success: some 1,500 users had registered and set up their individual home pages, more than 80% of all HR employees worldwide.

CURRENT CHALLENGES FACING THE ORGANIZATION Only a few weeks later, the fate of HRbase seemed to be changing. Fischer recapitulated the important issues that had been raised in a preceding HR Board meeting. Gathering that morning in Frankfurt, Germany, the HR Board members had lively discussions around the recent development and future of HRbase, the ambitious knowledge management initiative of Deutsche Bank’s HR Division. Pothmann was asked to collect their personal feedback until the end of February 2001. Based on their responses, Fischer would then decide about HRbase’s future. When the feedback was favorable, the project would be funded from an earmarked budget in 2001. In case of unfavorable feedback, the IS would either be significantly changed, or discontinued. Soon after the meeting, Pothmann started to compile the board members’ feedback. The first series of interviews confirmed the mixed feelings the senior executives had about HRbase. The majority of them still agreed that the Intranet-based KMS offered great potential to improve the transparency, consistency, and high-level competency of core HR processes. The Intranet-based KMS could provide long desired functionality, e.g., distribution of HR policies, project planning and support, and trend monitoring. Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

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Nevertheless, the IS had not added much value to the senior executives’ work so far. First, both quantity and quality of the data captured were not sufficient for regular use. Better data quality maintenance was needed quickly. Second, the knowledge management initiative was not connected to any business processes. The majority of users had just set up their individual home page because their superiors had made it mandatory, or pilot champions and student trainees had convinced them. Third, crosscultural challenges were mentioned by the HR Board members. The Asian workforce was anxious to provide non-work related information, e.g., hobbies, interests, and photos. German employees were not used to sharing personal information about competencies and interests, whereas Americans tended to be more open. In general, managers believed their problems to be very different compared to the problems managers in other countries encountered. As soon as Deutsche Software made usage statistics available, the figures supported the HR Board members’ opinions. On average, only 14% of the HR employees had ever used the Intranet-based KMS since its rollout on September 20, 2000, but there were significant differences between the geographical regions. Exhibit 5 shows HRbase registration and usage in January 2001. Senff explained the low usage rates along regional boundaries. First, the German employees were reluctant to post information on their homepages since Deutsche Bank faced a major realignment of the organizational structure in February 2001. Plans were announced to combine the five group divisions in a way that only two large group divisions would remain: the first division an integrated corporate and investment bank, and the second division responsible for private clients and asset management. The workforce feared that information on the individual homepages

Exhibit 5. HRbase Registration and Usage at the End of January 2001 1,000

Number of HR employees

Number of registered users

900 800

Number of effective users

86%

700 600 500 400 300 200

85% 20%

67%

88% 83%

100 12%

0 Germany

United Kingdom

7%

8%

Rest of Europe The Americas

4%

Asia Pacific

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could be used to decide layoffs. Second, the United Kingdom’s Regional Head of HR did not sufficiently support HRbase and did not promote the Intranet-based KMS with his HR teams. Third, unclear organizational structures and reporting lines made it difficult to reach potential users in Asia Pacific. Alarmed by the low usage rates and Fischer’s impending decision, Pothmann and his project team understood the pressing necessity to bring the system “from live to alive, from nice-to-have to need-to-have.” Reacting to the HR Board members’ criticism, decisions on further improvements, backed by more resources, had to be made quickly. To come up with a new proposal, the HRbase team gathered ideas to link data maintenance processes with Deutsche Bank’s core IS: the Global Directory (Yellow Pages), the PeopleSoft HR module, and the SAP R/3 system (both ERP systems). Additionally, they explored how core HR processes could be facilitated by HRbase and what change management strategies could be employed to increase the number of effective users in near future. However, they were unsure whether Fischer would give them more time.

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Leveraging Human Capital with the Knowledge Management System HRBase

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BIOGRAPHICAL SKETCHES Hauke Heier is a research associate at European Business School in Oestrich-Winkel, Germany, and visiting assistant professor of business administration and information management at Leiden University School of Management, The Netherlands. Mr. Heier holds a B.A. and a M.S. in information systems and organizational behavior from European Business School, an M.B.A. from James Madison University, U.S., and is in the final stages of his Ph.D. program. His current research interests include knowledge management systems, open source initiatives, and the adoption of new technologies in organizations. In addition, he is active as a frequent speaker at academic conferences. Hans P. Borgman is a professor of business administration and information management at Leiden University School of Management, The Netherlands. Previous appointments include the University of Michigan Business School in Ann Arbor, U.S., the European Business School in Oestrich-Winkel, Germany, and the Erasmus University in Rotterdam, The Netherlands, where he also obtained his Ph.D. Dr. Borgman’s current research interests include management aspects of e-business, data warehousing, and the adoption of new technologies in organizations. In addition, he is active in consulting, on (supervisory) boards, as a frequent speaker at academic and business conferences, and in executive education programs.

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