This document summarizes a research study that examines the factors influencing the success of manufacturing companies implementing information technology. The study analyzes data from 47 Finnish companies to test whether separate or combined development of technological resources and organizational/human resources best improves performance. Variables include the level of technology, organization, and performance measures. The study aims to determine if higher levels and larger leaps in technology, organization, or both correlate with increased performance. Preliminary results suggest organizational development correlates more strongly with performance increases than technology upgrades alone.

1. Performance Effects of Technological Development and
Organizational Development in Manufacturing Associated
Information Technology Implementation
Petri Pohjala
M.Sc., Lic. Tech.
@ petri.pohjala@kp-pohjala.net
Tel. +358406406300
Research study

2. Research study - Petri Pohjala
2
Research subject
To examine the factors which influence the
degree of success achieved by manufacturing
companies when implementing information
technology.

3. Research study - Petri Pohjala
3
Information technology in manufacturing
CAD - Computer Aided Design
• part and product geometry
• engineering analysis
• design review and evaluation
CAM - Computer Aided Manufacturing
• NC programming
• fixture planning
PPS - Production Planning System
• cost estimating
• capasity planning
• process control and monitoring
• shop floor control

4. Research study - Petri Pohjala
4
Problems (international)
The major reasons for the problems companies
encounter when implementing information
technology:
• failure to identify needs adequately
• inappropriate financial procedures
• failure to consult/involve employees
• poor communications
• poor planning
• inappropriate job design and work structures
• inadequate training
• poor management.
What is the situation in Finland?

5. Research study - Petri Pohjala
5
Object
To test the impact of two contrasting development
principles on performance, that is separate or
combined development of technological resources
versus development of human and organizational
resources.

6. Research study - Petri Pohjala
6
Research method
• data
• variables
• basic hypotheses
• data analyses

7. Research study - Petri Pohjala
7
Data
• The sample consists of 47 Finnish companies.
• The companies have made efforts to improve their operations
during the period of 1991-2016.
• Data is gathered through analyses of case and project
descriptions provided by the companies, and complemented by
a structured questionnaire.

8. Research study - Petri Pohjala
8
Variables (1/3)
The following independent and dependent variables were
developed:
1 Independent variables
Technology
1 Manual machines, manual systems
2 Simple computerization, some stand-alone CAD/CAM
3 A few subsystem computerized, some integration, CAD/CAM
4 Many subsystems computerized, FMS, CAD/CAM
5 Computerized systems, high integration, CIM

9. Research study - Petri Pohjala
9
Variables (2/3)
Organization and people
1 Taylorism, individual jobs, hierarchial organization
2 Group organization with central responsibility for quality,
costs, etc.
3 Groups and teams with responsibility for simpler planning etc.
4 Integrated groups and teams with integration, responsibility
for recruitment, quality, planning, etc. Simple continuous
training.
5 As 4, with responsibility for integration, contacts with suppliers
and customers, personnel development, economy. Advanced
training.

10. Research study - Petri Pohjala
10
Variables (3/3)
2 Dependent variables
Performance variables
1 Unit cost change
2 Productivity change
3 Manufacturing lead time change
4 Quality change
5 Change of absenteeism
6 Change of personnel turnover
Performance is measured as the percentage change during the development process, or during the
last 25 years (2016 vs. 1991). The performance measures refer to the same organization unit,
department, or site of the company that took part in the development process. The actual
percentage is not used in the analysis, but a scale that indicates if the performance (on each one of
the six measures) has decreased, is about the same, or has increased is used.

11. Research study - Petri Pohjala
11
Basic hypotheses (1/3)
H 1 The higher the position on Technology, the
higher is the performance.
H 2 The higher the position on Organization and
people, the higher is the performance.
H 3 The higher the position on Technology and
Organization and people the higher is the
performance.

12. Research study - Petri Pohjala
12
Basic hypotheses (2/3)
H 4 The larger the development leap in Technology, the higher is
the performance.
H 5 The larger the development leap in Organization and people,
the higher is the performance.
H 6 The larger the development leap in Technology and
Organization and people, the higher is the performance.

13. Research study - Petri Pohjala
13
Basic hypotheses (3/3)
H 7 The higher the position, and the larger the
development leap in Technology, the higher is
the performance.
H 8 The higher the position, and the larger the
development leap in Organization and people,
the higher is the performance.
H 9 The higher the positions, and the larger the
development leaps in Technology and
Organization and people, the higher is the
performance.

14. Research study - Petri Pohjala
14
Data analyses
The data will be analyzed in two ways:
• As a first test of each hypothesis, the dependent and
independent variables are cross-tabulated.
• As a second test of the hypotheses, a measure of correlation is
calculated (all variables are ordinal scale variables, and the
distributions are skewed -> gamma is used as the coefficient of
correlation).

15. Research study - Petri Pohjala
15
Results
At this phase it seems that the results indicate significant
correlations between development of human and organizational
resource management and most of the performance measures,
whereas just a few performance increases are correlated with
upgraded technology.