Managing ITSkills Portfolios:Planning, Acquisition and Performance EvaluationMakoto NakayamaNorma SutcliffeIDEA GROUP PUBLISHING
Makoto NakayamaDePaul University, USANorma SutcliffeDePaul University, USA !
!"# $ % Hershey London Melbourne Singapore
Acquisitions Editor:Mehdi Khosrow-PourSenior Managing Editor:Jan TraversManaging Editor:Amanda AppicelloDevelopment Editor:Michele RossiCopy Editor:Maria BoyerTypesetter:Amanda AppicelloCover Design:Lisa TosheffPrinted at:Yurchak Printing in the United States of America byIdea Group Publishing (an imprint of Idea Group Inc.)701 E. Chocolate Avenue, Suite 200Hershey PA 17033 USATel: 717-533-8845Fax: 717-533-8661E-mail: cust@ site: in the United Kingdom byIdea Group Publishing (an imprint of Idea Group Inc.)3 Henrietta StreetCovent GardenLondon WC2E 8LUTel: 44 20 7240 0856Fax: 44 20 7379 3313Web site: ' 2005 by Idea Group Inc. All rights reserved. No part of this book may be repro-duced in any form or by any means, electronic or mechanical, including photocopying, withoutwritten permission from the of Congress Cataloging-in-Publication DataeISBNBritish Cataloguing in Publication DataA Cataloguing in Publication record for this book is available from the British work contributed to this book is new, previously-unpublished material. The views expressed inthis book are those of the authors, but not necessarily of the publisher.
Managing IT SkillsPortfolios:Planning, Acquisition andPerformance EvaluationTable of ContentsPreface...................................................................................................vChapter ISkills, Management of Skills, and IT Skills Requirements................1Makoto Nakayama, DePaul University, USANorma Sutcliffe, DePaul University, USAChapter IIAn Approach for Managing an IT Skills Portfolio.............................26Makoto Nakayama, DePaul University, USANorma Sutcliffe, DePaul University, USAChapter IIIChallenges for Managing IT Skills Portfolio for E-Business............52Abdulrahman A. Mirza, King Saud University, Saudi ArabiaSusy S. Chan, DePaul University, USAChapter IVSkills and the Worker: Let’s Get Real..............................................81Elizabeth Lahey, Elizabeth Lahey and Associates, USAChapter VOptimizing IT Skills Management Initiatives..................................103Ken Strauss, Bookman Testing Services, USA
Chapter VIGovernment Involvement in Skills Issues........................................126Elizabeth Lahey, Elizabeth Lahey and Associates, USAChapter VIIJapanese IT-Skill Dilemma...............................................................150Yoko Takeda, Yokohama National University, JapanChapter VIIIEliminating the Weakest Link: Leveraging Human Capital withStrategic Alliances in IT Outsourcing Supply Chains......................176Diana J. Wong-MingJi, Eastern Michigan University, USAChapter IXAn Exploration of the Value of Information Systems Certification:The Perspective of the Human Resource Professional...................210John E. Anderson, East Carolina University, USAKevin Barrett, Dixie State College, USAPaul H. Schwager, East Carolina University, USAChapter XExtreme Interviewing to Find Team Oriented Programmers..........232Clement James Goebel, III, Menlo Innovations LLC, USARichard Sheridan, Menlo Innovations LLC, USAThomas Meloche, Menlo Institute LLC, USAAbout the Authors..............................................................................251Index...................................................................................................257
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Today s economic and technological environments make IT skills ever moreimportant for both firms and individual IT professionals. On the one hand, astudy done by the benchmarking firm Hackett shows that the primary causesof firms earning shortfalls and reduced productivity include: (a) the inability toleverage technology investments, and (b) the inability to access informationcausing slowing and deterioration in decision-making quality (PR Newswire,2001). As the use of IT spreads across industries and large to small firms, it iscritical that skilled IT professionals deliver efficiently well-designed and func-tioning information systems (IS) to firms and their IS the other hand, especially after 9-11, the economic downturn forced firmsto downsize their workforce. According to the AeA (formerly known as Ameri-can Electronics Association) study, the high-tech industry lost 540,000 jobs in2002 (McGee, 2003). Of 540,000 lost jobs, more than 200,000 are IT jobs(King, 2002). In addition to workforce downsizing, firms started using globaloutsourcing to further contain IT costs. A recent IDC study indicates thatoffshore delivery of IT services may increase as much as 23% by 2007 (Claburn,2003).While the dependency of IT use increases at firms, the number of IT profes-sionals who deliver IT skills is dwindling at least in the . We are prob-ably at the critical juncture to consider what IT skills really are and what theymean to firms in the short and long the critical nature of IT skills, their planning and management are notnecessarily easy for several reasons. First, IT skills are not easy to skill of typists can be measured by the number of letters and words theytype per time period and the number of errors they make in those typed comparison, the IT skills of systems analysts are not as simply defined astypists skills, let alone to measure.
viSecond, different people have different notions of IT skills. Some regard ITskills as how one uses a PC, others think of IT skills as some kind of broadtechnological knowledge. In reality, IT professionals deal with a variety oftechnologies, tools, and work contexts. Some IT skills pertain to the design ofparticular systems. A pure programmer realizes that he cannot do his workeffectively without having good communication skills to deal with his peers,analysts, and customers. In the past, we used such terms as hard skills (puretechnology skills) and soft skills (non-technology skills). With the advance-ment of technologies and tools, it is not clear now where to draw a line be-tween hard and soft skills because they have become so , the substance of IT work is becoming more sophisticated and compli-cated. Even smaller firms use a variety of computing hardware and some cases, a VB programmer wears a hat of systems analyst to developa system in a short time frame, interacting heavily with an end , the line between IT professionals and IT end-users is becoming ob-scure if not extinct. Often, we see end users developing their own reportsfrom information they those reflections, it is high time that we made ourselves aware of wherewe stand in our understanding, and lack of understanding, on what IT skillsreally are, what they mean to firms, how firms can plan and manage IT skills,and how government and individual IT professionals approach IT book provides: taxonomy and management tools for IT skills, an example of strategic skills management using IS projects and skillsportfolios, an example of strategic skills management for e-commerce, the view from the individual IT professionals on IT skills, the view from the government on planning and developing IT skills, an international perspective on IT skills management, and the view from the HR department on planning and acquiring IT these different scopes, this book gives a baseline for further researchand builds our knowledge on the management of IT skills.
viiOrganization of the BookThis book is divided into five sections aimed at: IT management, IT profes-sionals, IT testing, national issues, and finally human resource issues. The firstsection, covering Chapters I through III, looks at the IT managerial issuessurrounding IT I focuses on the concept and nature of skills skills in general and ITskills specifically. To begin, the chapter examines a broader overview on ITskills: What are recent statistics on IT skills, and what do they indicate to firmsand individual IT professionals? Then, it pins down the definition, characteris-tics, assessment, and classification of skills, generally drawing the findings ofpast studies. Although not all of us are interested in the theoretical aspects ofskills, it is important to take an inventory of taxonomy on skills so that wehave vocabulary to describe and plan IT skills strategically later. The chap-ter then looks into what makes IT skills different from non-IT skills based onour skills on the foundation from Chapter I, Chapter II provides an example ofstrategic IT skills management using the firm-level IS projects and IT skillsportfolios. First, the chapter draws three key principles for managing IT skillsstrategically derived from past studies. They are: people-centered organiza-tion, multi-mission capability, and work-based learning. Using these principlesas the foundation, the chapter presents a framework that uses the business-goal-driven, firm-level portfolio analyses. In these portfolio analyses, the threelevels of firm-level IS/IT management (i) IS projects, (ii) key IS projectdeliverables, and (iii) IT skills are prioritized by using (a) time scopes (cur-rent vs. future) and (b) a criticality assessment (., how crucial to objec-tives, how difficult to deliver, how risky against contingencies). In the end, theframework presents four types of sourcing options based on the analysis traditional backend application systems, the development and imple-mentation of e-commerce IT applications face a unique set of challenges. Theseinclude rapidly advancing technologies, often complex requirements for busi-ness-to-business interorganizational operations, and rather tight time constraintsfrom analysis and design to implementation and post-implementation require-ments. In Chapter III, Mirza and Chan look into how strategic IT skills man-agement can be done in such a challenging environment. They present a frame-work in which the process of IT skills management (skills acquisition, skills
viiidevelopment, and skills maintenance) is outlined at five levels (strategy level,architecture level, systems level, project level, tools and technology level).In Section II, covering Chapter IV, we look at the how IT skills are affectingthe IT IV turns to the perspectives of individual IT professionals. Over hercareer as an IT professional, Lahey has seen the work environments of ITprofessionals shift from the employer-driven IT skill acquisition to the indi-vidual-driven IT skill acquisition without extensive, protective help from em-ployers. Applying the Organization Man model (Whyte, 2002) and Adult Learn-ing theory (Knowles, 1990), she portrays rich pictures of such a shift by draw-ing on her experience as an IT training expert at McDonald s Corporation andcareer challenges of three IT professionals. Lahey introduces the TechCareerfiCompass (TCC) as a useful and reliable tool to assist in career decisionmaking for individual IT Section III, covering Chapter V, attention turns to measuring IT skills throughtesting. One of the most challenging aspects of IT skills management is how toassess IT skills objectively. Leveraging his extensive experience as an IT skillsassessment expert, Strauss discusses in Chapter V how to construct IT skillstests that can be readily used by managers for hiring and performance assess-ments. Using programming proficiency testing examples, he shows step-by-step how to present and use the testing results and their interpretations (feed-back) for managing IT skills. Moreover, the chapter walks us through differ-ent IT skill assessment methods. It then informs us on which one(s) to use fora given objective. Among them, the details of adaptive testing (tests that adaptthe proficiency of test-takers) are the next section of the book, Chapters VI and VII, attention turns to theissues that IT skills present nations dealing with international growing portion of the national economy is created and sustained by tech-nology products. Furthermore, the days are long gone when access to com-puters was a privilege; now computer/computing literacy is a necessity downto frontline workers. Thus, governments are concerned about the IT skills oftheir constituents for maintaining and growing the nation s economic particular concern of the . government is the increasing number of ITskill gaps found in the workforce. In Chapter VI, Lahey details how the is coordinating state, national, and international projects for stan-dardizing IT skills, as a first Chapter VII, Takeda examines the dilemma that Japan is facing with its ITskills. Japan has prided itself on using IT to meet the aims of greater efficiency.
ixIts firms have prided themselves on using in-house developed systems and ontheir IT staff s greater productivity. Unfortunately, Japanese firms find it verydifficult to abandon their unique systems for the newer technologies that theirinternational competitors have embraced enthusiastically. In response, thegovernment has promoted policies to increase the number of engineers, de-velop more advanced technical expertise, and diversify the work then goes on to examine how the Japanese IS vendors have respondedto their clients customization demands, further reducing the adoption of newertechnologies. The chapter concludes with a number of recommendations forresolving the dilemma of introducing newer technologies while resolving their not-made-for-us the last and fifth section of the book, covering Chapters VIII, IX, and X,we look at the human resource (HR) issues for IT Chapter VIII, Wong-MingJi outlines a model for constructing human capi-tal portfolios that will help firms strategically leverage their IT model is based on two organizational capabilities (the rational and theconnective) that provide integrating mechanisms for competencies in the HRIS(human resource information systems), the IS function, and supply chain man-agement. While the rational organizational capabilities that deal with formulat-ing strategies and the processes for attaining strategic goals are emphasized inmany firms, the role of the connective organizational capabilities are also justas important. Thus organizational learning and improvisation, along with sys-tems integration and relational contracting skills, play an important role in cre-ating human capital portfolios for strategic IT outsourcing. This model assistsfirms in identifying and strengthening their portfolios using a multi-level andmulti-disciplinary Chapter IX, Anderson, Barrett, and Schwager present the results of theirstudy that looked at the perceptions of HR professionals on IT certification,education, and work experience. In particular the study wanted to know howwell did each substitute for another. The study found that they were imperfectsubstitutes for each other. HR professionals did associate certification holderswith enhanced technical credibility, as well as having received valuable prepa-ration for other positions. Also, the study looked at how well HR profession-als perceive the candidate who has education, experience, and study found that such balanced candidates enjoyed a halo Chapter X, the problem of improving the rate of successful hires by chang-ing the hiring process is examined. Because the organization used the extremeprogramming method, where communication and teamwork skills are criti-cally important, Goebel, Sheridan, and Meloche argue that the traditional hir-
xing practices were inadequate. Thus, they implemented a new hiring processwhere applicants can demonstrate their communication and teamwork skillsas well as programming skills. The entire hiring process is discussed, includingthe interview process with its use of exercises and multiple the expanding set of skills that the new technologies require to the issuessurrounding offshore outsourcing, IT is asked to provide more and more. Theaim of this book is to help IT practitioners and IT researchers address theproblems involved in many aspects of managing IT skills at both the organiza-tional and individual , T. (2003). Study: Offshore outsourcing may not cause flood of lostjobs. InformationWeek, (November 20). Accessed December 6, 2003,from: J. (2002). Hard times: Tech workers trying to find jobs face a bleakfuture. Computerworld, (April 29). Accessed August 4, 2003, from: M. (1990). The adult learner: A neglected species. Houston,TX: Gulf , . (2003). High-tech jobs dwindle, but the worst may be , (November 19). Accessed December 6, 2003, from: Newswire. (2001). Success in leveraging technology and e-businessapplications, integration of business processes still elusive for mostcompanies. February , . (2002). The Organization Man. Philadelphia, PA: Universityof Pennsylvania Press.
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( The editors would like to acknowledge the assistance of all involved in thepreparation of this book without whose support the project could not havebeen successfully completed. This preparation included collation, review, andmodification of the submitted chapters. In addition, a special note of thanks isextended to all the staff of Idea Group Inc., whose contributions throughoutthe entire process from the genesis of the idea of the IT Skills Portfolio to thefinal publication have been of the authors of the chapters also served as referees for articles writtenby other authors. Thanks go to all who provided constructive and compre-hensive reviews. Some reviewers need to be mentioned because their reviewsset such high standards. Reviewers who provided the most inclusive and in-sightful comments include: John E. Anderson of East Carolina University, SusyS. Chan of DePaul University, Elizabeth Lahey formerly of the ComputingTechnology Industry Association, Ryutaro Manabe of Bunkyo University,Cheryl Maranto of Marquette University, Abdulrahman A. Mirza of King SaudUniversity, Paul H. Schwager of East Carolina University, Yoko Takeda ofYokohama National University, and Diana J. Wong-MingJi of Eastern Michi-gan especially want to give heartfelt thanks to the publishing team at IdeaGroup Inc. Michele Rossi gave us valuable advice on the publishing Travers helped us in keeping progress on track. Mehdi Khosrow-Pourgraciously extended an invitation to write this book.
xiiWe also want to thank our families for their unwavering support throughoutthis project. In particular, we want to thank . Gata who was unfailing in hisability to cheer us with his charm and help us with his insights on the Nakayama, PhDNorma Sutcliffe, PhDChicago, Illinois, USADecember 2003
Skills, Management of Skills, and IT Skills Requirements 1Chapter ISkills, Managementof Skills, and ITSkills RequirementsMakoto NakayamaDePaul University, USANorma SutcliffeDePaul University, USAAbstractInformation technology (IT) skill shortages appear at the market leveloccasionally usually for emerging technologies, unanticipated challenges,and/or unresolved issues such as systems security. Even when a market-level skill shortage does not exist, a firm can still suffer from skillshortages for its critical information system (IS) project and/or IT operationsunless the firm plans and manages its needs for IT skills. This chapter firstsurveys IT skills at the market level and then at the firm level to gain aperspective on the issues. Attention turns to the nature and characteristicsof skills in general not just IT skills by reviewing past literature. Themanagement of skills is deeply rooted in the management of knowledge,skills, and abilities (KSAs) and human resource practices of the firm. Keyissues and lessons are drawn from the literature in those areas. WeCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
2 Nakayama & Sutcliffeconclude by considering the nature and characteristics of IT skills indeveloping an agenda for the effective management of IT employment issues for information technology (IT) professionals aresources of considerable debate. While the economy may be on its way to therecovery, many firms still struggle to contain costs. IT has especially beenimpacted by the tidal waves of changes in the 1990s enjoyed an economic boom due to the Internet and its killerapplication, e-commerce. At the turn of the 21st century, the Bureau of LaborStatistics (2000) estimated that between 1998 and 2008 the demand for ITprofessionals, such as computer engineers, computer support specialists,database administrators, and systems analysts, would grow at rates exceeding70%. In 2001, industry surveys estimated that there were 850,000 IT positionsopen in the . and that Europe had million vacant IT positions (Fisher,2001). Along this line, industries and nations recognized the IT skills shortageas a major problem needing a resolution. For example, the Sector SkillsDevelopment Agency (SSDA) in the United Kingdom (UK) funds, supports,and champions the new UK-wide network of influential, employer-led SectorSkills Councils (SSCs). One of the SSCs is e-skills, designed to foster skillavailabilities for the IT, Telecoms, and Contact Centre sectors. The also had similar initiatives and produced reports on this matter(Rada, 1999).However, a drastic shift in the economic climate occurred particularly after theSeptember 11 attack. Firms were forced to slash operational costs bystreamlining their business processes. Unemployment rates went up. All of asudden, the IT skills shortage disappeared in firms. A good number of ITprofessionals were forced out of their to the . Labor Department, the number of workers filing forunemployment benefits rose to 439,000 as of July 2003. A recent press releaseby the Information Technology Association of America (ITAA) (2003) says, [P]redicted demand for hiring IT workers has reached a historic low of only493,000 positions over the next 12 months down from million at the startof 2000 and less than one-half of the predicted million positions needed atCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 3the start of 2002. In addition, ITAA estimated that more than 200,000 ITworkers are jobless (King, 2002). Thus, not only did we overestimate thedemand for IT skills, but also about half of those filing claims for unemploymentbenefits are IT workers!Behind such not-so-sanguine facts is the relentless economic pressure oncontaining IT operational costs. Firms not only try to accomplish the sameamount of work with lower headcount, but they also increasingly rely onoffshore outsourcing. According to a recent ITAA survey (2003), Sixty-sevenpercent of respondents already outsourcing IT work overseas say that jobsmost likely to be moved offshore are programming or software engineeringpositions, followed by 37% moving network design, and 30% moving Webdevelopment jobs. Demand at Market and Firm LevelsIf firms are downsizing their internal IT workforce, the question is whether weshould be concerned about IT skills shortage in the first place at least for address this issue, we need to examine the demand for IT skills at twolevels the market level and the firm to a 2002 survey done by META Group (2002), 62% of the surveyparticipants replied not at all to the question, Are you experiencing a skillshortage in your IT organization? Twenty-two percent said somewhat andonly 16% said yes. Such results are not surprising given that many firmsreduced their IT workforce to cut costs. If there is so much excess supply ofIT labor, then one should conclude that there is no skills shortage at the , the supply and demand of IT skills look different if we take a closerlook at them at the firm level. Although a skills crisis is not evident at the marketlevel, the concept of a skills shortage is not always the same as a hard-to-fillvacancy (Green, Machin, & Wilkinson, 1998). According to a recent surveyby people3 (a subsidiary of Gartner) (Marlin, 2003), the most difficult jobs tohire include: database administrator, Internet architect, network engineer,security analyst, project manager, and Web application programmer, whereasamong the most difficult skills to hire are Oracle administrator, PeopleSoft,Unix, Java, Oracle development, and Microsoft SQL server. Although theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
4 Nakayama & Sutclifferesults from such surveys change quickly as markets and technology change,what those results imply are twofold: (1) the demand and supply of skills varyfrom one skill to another skill, as well as from one firm to another; and (2)competent skills are usually not easy to hire and current economic pressures notwithstanding, it does not seem that firmssoon will cut or slow down their efforts to improve IT skills among theiremployees. According to IDC, the IT training and education market isexpected to increase at a compound annual rate of 5% from 2002 to 2007 inthe United States (D Antoni, 2003). Moreover, IDC predicts that corporatetraining will increase at twice such rate over the same period. What do firmswant from their IT skills? They are not interested in bringing in new hires orincreasing their headcount, but they are interested in more efficiently managingtheir human addition, IT skills are not exclusively executed by IT professionals. Becauseso much business work cannot be done without IT, increasingly IT skills are anintegral part of end-user skills. For instance, in the 2003 InformationWeeksurvey, 34% of CFOs valued IT knowledge as the most important complemen-tary skills for accountants, while 23% of them regard general knowledge ofbusiness as most important (Foley & Murphy, 2003). This is not surprising asmore and more accountants rely on IS for their work. The majority of Fortune500 companies already use ERP systems that require from the user some levelof systems familiarity, if not IT skills. In contrast, if a firm uses a systemsdevelopment method requiring intensive user involvement such as prototyping,as opposed to the conventional system development life cycle (SDLC), thedistinction between IT personnel and non-IT personnel becomes the matter ofdegree rather than a clear line of frequently have critical IT projects that are at risk when IT skills arelacking. The critical IT projects might be updates to legacy systems or anoverhaul of an existing business process by using new IT. No matter the typeof project, it will fail to meet planned completion time, systems functionality,and/or costs when lacking critical IT skills including IS project skills (Jiang &Klein, 2001; Lemon, Bowitz, Burn, & Hackney, 2002; META Group 2003).Moreover, recent research shows that IT professionals value leadership andmanagement skills to support teamwork more than non-IT business profession-als (McGee, 2003). Losing such talents is fairly costly to the , firms can always use better talents and skills in critical areas of theirbusiness operations so they can become more competitive. A skills shortagebecomes salient or non-existent, as the supply and demand of IT workersCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 5fluctuates with technology changes and business economic climates. For thefirm, what is important is knowing what it needs for getting their IT systemscompetitive by using human and capital resources most efficiently. Offshoreoutsourcing may not be the right option depending on the skills areas addition, skills planning should also be considered at the user level. Whatmight be the criteria for skills planning?The following sections consider how firms know what IT skills they need, andhow they actually obtain and retain them. First, we look in-depth at what skillsgenerally are, in terms of their definition, characteristics, and managementprocesses. Then, we examine the nature and management process specific toIT Do We Know About Skills?Before we discuss IT skills planning, how much do we already know aboutskills planning in general? What are some important lessons learned in the past?Towards this end, we first review what a skill really is, and the nature andcharacteristics of a skill. Then, we look at what strategic human resourcemanagement (SHRM) is, some of its important methodologies, and then we endwith what we know about skills planning and is a Skill?According to American Heritage Dictionary (2000), skill is (1) Proficiency;dexterity, (2) An art, trade, or technique, esp. one requiring use of the handsor body. Skill pertains to the delivery of tasks by human workers, or simplytask performance. Examples of skills include Swiss watch makers manualdexterity skills, industrial data analysts quantitative analytical skills to Holly-wood movie makers marketing skills, and CEOs crisis handling skills. Alongthis line, Welford (1968, as referenced by Proctor & Dutta, 1995) defined skillas being concerned with all the factors which go to make up a competent,expert, rapid, and accurate performance. Skill in this sense thus attaches, to agreater or lesser extent, to any performance and is not limited to manualoperations but covers a wide range of mental activities as well. Thus, ourstarting definition of skill is the delivery of competent, expert, rapid, andaccurate behaviors to complete ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
6 Nakayama & SutcliffeCharacteristics of a SkillBecause there are so many kinds of tasks and also numerous skills toaccomplish them, can we identify some common characteristics of all skills?According to Proctor and Dutta (1995, p. 18), some of these critical charac-teristics include: A skill is not innate, but must be learned. A skill behavior is goal directed. A skill develops in response to somedemand imposed by the task environment. A skill is acquired when the behavior is highly integrated and wellorganized. Through experience, the components of the behavior becomestructured into coherent patterns. Cognitive demands are reduced as skill is , a skill is something that results from learning and something that is shownin task performances. Taking such process view of skill, Proctor and Dutta(1995) define skill as goal-directed, well-organized behavior that is acquiredthrough practice and performance with economy of effort. Along the line of learning theory, the process of skill acquisition is often basedon the three-phase model proposed by Fitts (1964, 1962/1990; Fitts &Posner, 1967; as referenced by Proctor & Dutta, 1995): Cognitive PhaseOne understands the nature of the task and how it should be performed. Associative PhaseInputs are linked more directly to appropriate actions, the need for verbalmediation is diminished, errors decrease and performance time improves. Autonomous PhaseThe requirements for conscious attention to performing the task decrease,and task performance no longer requires conscious this model, a skill is continuously developed over time, following the learningcurve, until one can deliver task performance with the minimum amount ofconscious effort. So, our definition of skill is now revised to be the delivery ofcompetent, expert, rapid, and accurate behaviors to complete goal-directed,pre-defined ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 7Assessment of SkillIf we take the task-oriented perspective of skill, the measurement of skillbecomes basically the matter of assessing task performance. As long as thetask is simple and measurable, we can easily assess one s skill by looking at thequantity and quality of task performance as well as time and costs of taskdelivery. In contrast, skill assessment becomes more difficult when:(a)The task is complex.(b)The task goals (also known as deliverables) are not easy to define.(c)Task outcomes are either not evident or are ambiguous.(d)Task outcomes are not immediately available (outcomes appear overtime).(e)Task outcomes are embedded in other task outcomes.(f)The task is done with other tasks, and they are , the definition of a skill is revised to be the delivery of competent, expert,rapid, and accurate behaviors to complete goal-directed, pre-defined tasksthat can be assessed through of SkillsHaving our working definition of what a skill is, we now look into the substanceof skills. Because skills can be associated with many kinds of tasks, theclassification of skills is complicated. There are numerous tasks, and tasks canbe divided into sub-tasks. Also in some contexts, sub-tasks are known astasks. Tasks and their sub-tasks are often interdependent with each addition to skill classifications, we are also interested in what the fundamen-tal or foundational skills are, given that skills can be hierarchically classifiedaccording to their dependency on each other. If we can identify fundamentalskills, the common belief is that enhancing those fundamental skills can result inenhancing numerous terminal skills to deliver final tasks. One example is theimpact of academic skills (fundamental skills) on the labor market performance(terminal skills). Indeed, past studies show that the level of schooling and thelevel of wages are positively associated with each other (Stasz, 2001).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
8 Nakayama & SutcliffeFrom the standpoint of firms, the pressing questions are: What are the mostimportant skills? What are the fundamental skills that result in competitiveadvantage?Unfortunately, those questions are not easy to answer. According to Stasz(2001), we have no consensus as to the definition and measurement of fundamental skills although skills can be categorized broadly in four areassuch as: (1) academic/cognitive skills (skills primarily acquired in schooling);(2) generic skills (problem solving, communications, working in teams); (3)technical skills (specific skills needed in an occupation); and (4) work-relatedattitudes/soft skills (motivation, volition, dispositions). She also reports, [S]incethe literature on non-academic skills is somewhat undeveloped conceptually,direct or even indirect measures of these skills have not been fully developed. As an alternative to the objective view of skills, she suggests that we takewhat she calls a sociocultural perspective on skills, where skills are basicallyunderstood within the particular context of work and its social setting. Thissituational perspective is a practice-based perspective of work that is open tobroader characterizations of skill and other conceptions of knowledge whichare less tied to formal schooling (., tactile understanding, social understand-ing, artisan skills, improvisational skills, etc.). While each work setting provides unique circumstances for skills, the sociocul-tural perspective itself unfortunately does not give easy-to-follow, commonguidelines for managing the workforce firms, the unit of focus is often the human worker rather than skills, becauseskills are embedded within human workers. Organizational psychologiststraditionally categorized different types of learning outcomes as knowledge,skills, and abilities (KSAs) (Blanchard & Thacker, 1999, pp. 4-5). Using suchcategories, the human resource (HR) department conducts job analysis toidentify what KSAs are needed for the organization s tasks. The organizationthen allocates its employees who have the KSAs to where they are needed. Inaddition, KSAs are used to screen and evaluate new hires. To assessemployees job performance, HR managers can rate the knowledge needed toexecute their tasks, the skills demonstrated in their task delivery, and theabilities to conduct their current or future ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 9Skill vs. PerformanceLike skills, KSAs can directly pertain to task, job, and/or organizationalperformance. If so, KSAs ultimately impact on the value of the firm itselfthrough how KSAs are acquired and utilized based on human resourcemanagement practices. Youndt, Snell, Dean, and Lepak (1996) summarizesuch linkage under the human capital theory as follows: From micro economics, human capital theory suggests that peoplepossess skills, knowledge, and abilities that provide economic value tofirms. Since firm investments to increase employee skills, knowledge,and abilities carry both out-of-pocket and opportunity costs, they areonly justified if they produce future returns via increased productivity(Duncan & Hoffman, 1981; Rumberger, 1987; Tsang, 1987). In otherwords, increased productivity derived from human capital investmentsdepends on the contribution of employees to a firm. Therefore, thehigher the potential for employee contribution in a firm, the more likelyit is that the firm will invest in human capital (via human resourcemanagement activities) and that these investments will lead to higherindividual productivity and firm performance (Becker, 1976; Parnes,1984). As many contemporary manufacturers are said to be increasingthe potential for employee contributions in their production equations(Walton & Susman, 1987), human capital theory would suggest thatHR practices can directly influence firm performance. Interestingly, past studies noted that task performances are influenced not onlyby KSAs, but also by the motivation of workers and the environment wherethose tasks are executed (., London, 1983; Murray & Gerhart, 1998; Noe,1986). For example, Blanchard and Thacker (1999) formulated the factorsthat determine human performance as: Performance = Motivation x KSAsx Environment, where the A in KSAs is the worker s Attitudes rather thanAbilities. In Blanchard and Thacker s view, ability cannot easily be differen-tiated from skill partly because they define skill as capacity. Indeed, skill and ability are often used interchangeably in our daily lives. They also raisea good point in that a person s attitude influences job performance. So thedefinition of a skill is the delivery of competent, expert, rapid, and accuratebehaviors to complete goal-directed, predefined tasks that are usually as-sessed through ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
10 Nakayama & SutcliffeFigure 1: Performance Delivery and KSAs Performance Delivery Skills (Demonstrated Capabilities) Abilities Knowledge (Potentials) KSAs That is, skill is a demonstrated capability to accomplish a task. In contrast,ability is a potential that is, a latent factor for the skill (see Figure 1). Attitudegenerally refers to a state of mind and feeling, which includes motivation. Attitude is a holistic state or posture that is formulated through a variety offactors including genetic inheritance, upbringing, mental state, education, familysituation, and so forth. Interestingly, Waldman and Avolio (1993; as referencedby Tesluk and Jacobs, 1998) report that non-work experience can alsoinfluence work-related knowledge, skills, abilities, and motivation. After all, aperson can be viewed as a system consisting of body and mind. It is also knownthat mind affects the body and vice versa. Thus, we loosely view skill as theactual performance delivery, which is supported by knowledge and this view, knowledge and ability enable performance delivery, which is theexercise of skill. Also, we would like to integrate the above performanceformula by Blanchard and Thacker with non-work factors such as our sociallife, hobbies, family situation, and so forth taking a view that our personal livesdo affect how we perform at work. Then, we can summarize, for the time being,the factors that impact worker performance as:Performance=Motivation x KSAs x Work Environment x Non-Work FactorsCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 11A Strategic Approach to Skills ManagementThe 1990s saw us revisit the question of what really differentiates a successfulfirm from the less successful ones. One answer was the notion of strategichuman resource management (SHRM), which focused our attention to thecriticality of human resource management. Under SHRM, individual workersare viewed as a source of the firm s competitive advantage rather than ascomplementary or limiting factors of the firm s success. Moreover, SHRMplaces people in the core of (1998) notes that the source of competitive advantage shifts over time,as some firms succeed in one period and fade in another. However, certainfirms such as Plenum Publishing, Circuit City, Tyson Foods, Wal-Mart, andSouthwest Airlines enjoy sustained competitive advantage; they rely not ontechnology, patents, or strategic position, but on how they manage theirworkforce. As a guideline, Pfeffer, Hatano, and Santalainen (1995) suggested the 13collective practices for SHRM: (1) employment security, (2) selectivity inrecruiting, (3) high wages, (4) incentive pay, (5) employee ownership, (6)information sharing, (7) participation and empowerment, (8) self-managedteams, (9) training and skill development, (10) cross-utilization and cross-training, (11) symbolic egalitarianism, (12) wage compression, and (13)promotion from within. While these practices are desirable, the questionremains whether the practice of SHRM really results in better firm perfor-mance. Several studies report that SHRM makes a positive difference in firmperformance (., Becker & Gerhart, 1996; Delaney & Huselid, 1996;Youndt et al., 1996).While skills are part of SHRM, how do skills relate to firm, group, and/orindividual performance? After all, [s]killed behavior is fundamental to allhuman activities (Proctor & Dutta, 1995, p. 1). For this reason, it is notsurprising that [s]ystematic research on skill acquisition and human perfor-mance has been conducted since the late 1800s (Proctor & Dutta, 1995,p. xv).In the spirit of SHRM, the performance equation (Performance = Motivationx KSAs x Work Environment x Non-Work Factors) has a twofold , a firm s SHRM should establish systems to enhance and/or changeperformance favorably through such factors as worker motivation, workenvironment, and non-work factors. Second, management strategically plansCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
12 Nakayama & Sutcliffeand enhances KSAs. While the former goes beyond the scope of this chapter,we will investigate what we already know about the management of KSAs, andthen what we can apply to the management of IT-related general process of strategic staffing is:(1)job analysis;(2)KSA acquisition through training and/or hiring; and(3)management of KSAs considering the rates of attrition and retention, theassessment of KSAs, and the pace of KSA there are many studies covering job analysis (., Levine, Ash, Hall, &Sistrunk, 1983; Schneider & Konz, 1989), job analysis generally involves thefollowing two steps: (1) defining what the job needs to accomplish (in thepresent and future), and (2) identifying what KSAs are needed to accomplishthe job, together with any needed definition of job, according to the American Heritage Dictionary(2000), is (1) A regular activity performed for payment. (2) A position inwhich one is employed. So long as one s job is simple and repetitive (.,attaching a part to the casing of equipment), job analysis is easy at the individuallevel. Nevertheless, job analysis becomes more complex when a job involvesmore tasks a mortgage broker (job) needs to maintain the information onwhat mortgage suppliers provide and what mortgage buyers look for currently(several major task steps) and in the future, and successfully complete thetransaction (several major task steps). Moreover, there are more job positionstoday demanding that professionals play different job roles simultaneously anIT director who coordinates the work to be done in her IT department(department manager), oversees a major enterprise system implementationproject (project manager), and participates in a corporate-level strategyreformulation project (corporate director).According to Campbell (1988), the four fundamental attributes of complextasks are:(1)multiple potential paths to arrive at a desired end state;(2)multiple desired end states to attain;(3)conflicting interdependence among paths to multiple desired outcomes; and(4)uncertain or probabilistic links among paths and ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 13Further, Campbell classifies the major task types as: (a) simple tasks, (b)decision tasks, (c) judgment tasks, (d) problem tasks, and (e) fuzzy combination of economic pressures and progress in business managementcertainly put more incentive on firms to make IT and non-IT professionals moreversatile in their work. One result is increasing complexity of jobs along with thejob complexity dimensions Campbell contrast, what are the important or significant skills needed to perform simpleto complex jobs as well as the tasks within those jobs?A Focused Approach to Skills ManagementIf we recall our working definition of skill the delivery of competent, expert,rapid, and accurate behaviors to complete goal-directed, predefined tasks there are potentially numerous skills because there are countless tasks. Thus,the fundamental problem for strategic skills management is how we shouldclassify skills and what the fundamental skills are. For example, Clarkson(2001, p. 130) provides an example of a seemingly simple task that can consistof numerous KSAs: [G]iving presentations is commonly seen as interpersonal skills. Yetthe process of creating and delivering a presentation or technicalbriefing calls on several abilities: Conceptual thinking and analytical ability in deciding what toinclude. Planning and communication in ordering the contents. Some kind of design skills in creating the supporting visual aids forthe presentation or briefing. Communication in delivering the material. Reading the body language in gauging audience reaction. Active listening and quick thinking in answering the questions. From the standpoint of strategically managing skills, what would be theimportant abilities and/or skills? Clarkson claims that they are competencies[that] are hidden inside the person but influence how he uses his skills. She listsCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
14 Nakayama & Sutcliffethose important competencies as: analytical ability, conceptual thinking, com-munication, self-development, adaptability, and initiative (p. 134).The term competency usually refers to the level of KSAs, especially that ofmaking a competitive advantage. This leads us to the notion of core compe-tency proposed by Prahalad and Hamel (1990) (see Figure 2). They think thatthe firm s competitive advantage is rooted in the core competencies, which are the collective learning in the organization, especially how to coordinate diverseproduction skills and integrate multiple streams of technologies. Core competencies are an abstracted set of skills at the group level. Corecompetencies are the driving force behind the creation of core products, whichwill lead to the boundary of business units. For example, 3M s core competen-cies are substrates, coating, and coated abrasives and devised various waysto combine them to produce Post-it notes, as well as magnetic tape andphotographic film products. It is important to note that such core competenciesare not necessarily particular patents and/or technologies, but more about theabilities to integrate and coordinate different products and work units to far, we looked at skills in general. To summarize, the key lessons we canapply towards the effective management of IT skills are:Figure 2: Core Competencies, Products, and the Organization (Prahalad& Hamel, 1990) End Products 1 2 3 4 5 6 7 8 9 Business 1 Business 2 Business 3 Core Product 1 Core Product 2 Competence 1 Competence 2 Competence 3 Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 15 Skill is goal-oriented, demonstrated capability. Skill can be associated with any performance and defined in many ways. Skill delivers performance, mediated by knowledge, abilities, motivation,work environment, and non-work-related factors. Skill is acquired and enhanced through work. A firm can enjoy sustained competitive advantage and, in turn, higherperformance through strategic management of human resources. Workers should be regarded as a main enabler of the organization ratherthan costs and/or constraints. Recognizing what core competencies the firm possesses and translatesinto products and supporting organizational structures are critical for themanagement of skills at the firm of IT SkillsAbove, we reviewed business and management skills in broad terms. The nextlogical questions are:(1)Are IT skills different from non-IT skills? If so, how?(2)What are the implications of these differences for managing IT skillsstrategically?To examine how unique IT skills are, we must first define what IT skills are, andthen compare them to non-IT a narrow sense, IT skills are the demonstrated proficiency in using IT toolssuch as personal computers, programming languages, and sales managementsystems. IT skills can be viewed at many levels (see Table 1). For example, wecan attribute skills to different types of hardware, software, telecommunication,network, and information on the roles of those who use IT, we can frame skills by developmenttasks (., development tool design such as compiler design, systems analysis,systems design, project management, programming types, programming lan-guages, testing, maintenance, helpdesk, end-user training and education) andend-user tasks (., using developer platforms/tools such as IBM WebSphere,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
16 Nakayama & SutcliffeTable 1: Examples of IT/IS Skill Classifications Classification Skill Examples IS elements hardware skill, software skill, network/telecommunication skill, organizational skill, people skill managerial CIO skill, departmental coordination skill, IT architecture design skill, IT resource functions & roles planning skill, change management skill, security skill, end-user training skill work types project management skill, administrative skill, technical support skill industry/firm industry-specific (., grocery retailing, automotive manufacturing) skill, firm-specific skill IS development survey skill, interview skill, feasibility study skill, systems analysis skill, systems process design skill, systems development skill, debugging/troubleshooting skills, IS training skill, IS maintenance skill programming C++ skill, Java skill, COBOL skill, Visual Basic skill, SQL skill, HTML skill languages business process business analysis skill, operational planning skill, process design skill, project related coordination skill e-commerce Web page design skill, Web graphic design skill, site design & coordination skill, ASP skill, JSP skill, Perl skill, Flash skill, DreamWeaver skill database related database design skill, database programming skill, relational database skill, object-oriented database skill, DB2 skill, Oracle skill, Sybase skill product vendors IBM skill, Microsoft skill, Oracle skill, Cisco skill product types ERP skill, mainframe skill, Web server skill, middleware skill, router skill products Lotus Domino skill, MQ Series skill, SAP R/3 skill, NetWare skill, Access skill development WebSphere skill, Visual Studio .NET skill, Rational Rose skill, UML skill platform/tools business related business skill, soft skill, interpersonal skill, writing skill, communication skill IT types PC skill, backend system skill, PDA skill, WAN skill, LAN skill, global IT skill Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 17using application software ranging from Microsoft Office, Photoshop toenterprise systems).Skills can be categorized into domains of development tasks (., businessprocess application, website design and management, database design andreporting). Skills can also be categorized by numerous IT product types,vendors, and particular products (., publishing document software,Macromedia Flash, 3-D simulations). Alternatively, skills can be categorizedby industries, firm types (., large/small, regional/global), individual firms,managerial levels, and organizational structures and number of ways to classify IT skills is virtually limitless because the use ofIT continues to grow in business operations, public services, and private past studies note that the number of skills has no limit, professional skillsare usually attributed to managerial roles or types of professions and anyequipment if used. In addition, the pace of change in these attributes is relativelyslow compared to those in the IT domain. In IT, the norm of speed is wellcharacterized by Moore s Law the capability of microprocessors doublesevery 18 months. An advancement of one product, say the version-up of theWindows operating system, triggers a whole new set of consequential changesin numerous related products. As technologies evolve, their levels of sophisti-cation increase. The operating environment of IT skills does seem different fromthat of general business skills in the past. The universe of IT grows faster oreven explodes then makes IT skills different from non-IT skills (see Figure 3)? First, ITskills are directly subject to the rapid speed of technological innovations. Thus,particular IT skills may soon become obsolete. Certain non-IT skills alsobecome obsolete over time, when they are impacted by various technologicaland/or non-technological innovations. However, IT skills are often directlyimpacted by the pace of technological innovations. Thus, the half-life orvolatility of IT skills utility is in general higher than non-IT , as technologies evolve, the internal complexity of IT tools andproducts tends to increase so it can realize greater flexibility and usability. In the1970s, the engineers of personal computers (PC) could be involved in thedevelopment of various hardware and software aspects. In 2000, eachtechnology element is much more sophisticated because types of technologiesinvolved in the PC literally exploded. For example, Windows had three2million lines of code; Windows XP now has 45 million lines of code. Accordingto Microsoft, their PC operating system doubles its lines of code every 866Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
18 Nakayama & SutcliffeFigure 3: Characteristics of IT Skills Numerous ways to define IT skills by different attributes and tools Driven directly by continuous IT innovations Shorter half-life for IT skills Complex interactions between IT, organization, tasks and individuals A wide spectrum of users 3days. The inference is that the types of technical expertise are growingexponentially. As the universe of IT gets more sophisticated and complex, theIT professional can get buried in one narrow range of a technical domain andtoo preoccupied with one technology domain to have a broader perspective onthe entire IT , many IT skills are focused on with the complex interactions between IT,the organization, tasks, and individuals. In one sense, IT skills are the skills touse tools. Work tools include home building tools (., saw, hammer, wrench),construction tools (., crane, bulldozer, roller), and so forth. While traditionaltool skills tended to focus on particular task domains, many IT skills areconcerned not only with the knowledge of the IT tools, but also with how thosetools are used at the organization and/or work group level. An additionalconcern is whether and how IT tools benefit the organization. For example,even programming skills are not simply self-contained skills on syntax , effective programming cannot be done without knowing how computersgenerally work, having an insight on how the system software is constructed,and understanding how particular modules are designed and interact with othermodules (., system function/object interfaces, class/layered module hierar-chies). Many IT tools, especially for IS development tasks, are used toautomate or facilitate business processes. Thus, IT skills inherently interminglewith the elements of business activities and , IT skills have a wide spectrum of owners. It is not just IT engineerswho use IT skills. With the continuous diffusion of IT, professional, educational,and personal environments require their workers to use the equipment poweredby microprocessors. Thus, IT skills are no longer held by a select few ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 19Given the unique characteristics of IT skills, the critical questions for themanagement of IT skills at the individual, work group, firm, and societal levelsinclude: What are fundamental IT skills? What are critical IT skills for those involved? How should we acquire and maintain IT skills at the various levels? How should we plan and manage IT skills strategically?The last question hinges on identifying the firm s strategies and goals. In the nextchapter, we give guidelines on using the firm s strategy for IT skill portfoliomanagement. The question of skill management at the societal level involvesefforts between national, state, and municipal institutions, together with theeducational institutions. And such efforts need to be based on the current andfuture thinking of the first two questions the research community continues to examine what constitutes funda-mental and critical IT skills are, we believe the business community needs topursue a more goal-driven approach (see Figure 4). As reviewed earlier, skillsare tied to task performances (also known as deliverables) and, in turn, tostrategic business goals. The benefit of the goal-driven approach is that the fundamental or critical business goals and objectives can dictate and/orFigure 4: The Goal-Driven, Context-Specific Approach for IT SkillManagement Business Context Business Goals IT Strategic Goals Task Performance Goals Organizational or Deliverables Context IT Skills Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
20 Nakayama & Sutcliffetranslate into fundamental IT skills. Whatever needs to be done to accomplishthe important strategic business goals determines the task performance goals(also known as deliverables), which then define skills. Thus, the prevailing skillclassification does not constrain our planning; we can name skills after specifictask goals such as Chicago Air enterprise system integration skills, LosAngeles Municipal COBOL/legacy system upgrade skills, supplier dataintegration skills, and so forth, as opposed to programming skills, VisualBasic skills, and SAP skills. When planning for the capabilities of the firm s IT/IS unit, the nine corecapabilities model proposed by Feeny and Willcocks (1998) provides anexcellent starting point; it is a checklist to soul-search critical skills for the IT/Table 2: IS Core Capabilities vs. Key Skills (Feeny & Willcocks, 1998)IS Core Capabilities Skills to Achieve Core IS Capabilities IS/IT Leadership Technical Skills Integrating IS/IT effort with business purpose and activity Business Skills Business Systems Thinking Envisioning the business process which technology makes Interpersonal Skills possible Time Horizons Relationship Building Skills for identifying and protecting the Getting the business constructively engaged in IS/IT issues future position Architecture Planning Motivating Values Creating the coherent blueprint for a technical platform which Motivation or individual s value set to responds to present and future business needs be multi-talented Making Technology Work Rapidly achieving technical progress by one means or another Informed Buying Managing the IS/IT sourcing strategy that meets the interests of the business Contract Facilitation Ensuring the success of existing contracts for IS/IT services Contract Monitoring Protecting the firm s contractual position, current and future Vendor Development Identifying the potential value of IS/IT service suppliers Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 21IS unit (see Table 2). It is important to stress that the process of identifying firm-specific, critical IT skills (or IT competencies) itself provides a meaningfulopportunity for managers to identify the firm s strategic business objectives andto devise complementary strategies and tactics for the IT/IS goal-driven approach is also a context-specific approach. Goals, firmresources, and business situations create a unique context, which dictates a setof specific skills that enable goal accomplishment. Such a context is neverstatic it changes and evolves. This means that skills management is based onmoving targets. On the one hand, we need to identify critical business goals,critical IT objectives, and, in turn, critical IT skills or IT competencies. On theother hand, we need a system in which skill acquisition and development aredone dynamically through the evolving work context. That is, skills and work-based learning go , Ashton, and Felstead (2001) also emphasize the indispensability ofwork-based learning, while they note schooling can complement such work-based learning with somewhat diminishing return of efforts. Situational learningenables us to acquire important skills that were hard or impossible to codify(and hence teach in a classroom) while giving us opportunities to socialize withother workers. They also note, The ability to learn is indeed sometimes seenas an important skill in itself. At the individual level, IT professionals should be cognizant of their core competencies. Clarkson (2001) states that the individual s job requirementsdrive the interpersonal skills and behavioral competencies that he needs. Shesuggests that we call driving factors of those skills competencies, andidentifying such competencies is a staring point of skills both firm and individual levels, it is important to recall that skills are acquiredthrough experience. Until we discover if there exists fundamental ITskills, it makes more sense at present to take a (situational) task/job-driven ITskills planning and management this chapter, we looked at past studies on skills in general, then at how firmsmanage skills. We also considered the unique characteristics of IT skillscompared to non-IT skills. Based on these reflections, we reached the insightCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
22 Nakayama & Sutcliffewhere the goal-driven, context-specific approach for managing IT skills makesmore sense to give firms core competencies. In looking towards the nextchapter, key insights and issues we recognized in this chapter include: Task goals drive skills. Skill and learning are two sides of the same coin. How the firm plans and manages its human resources not only affects itsperformance, but also impacts the sustainability of its competitive advan-tage. Human resources are the source of competitive advantage, not the factorsof costs and/or limitations. Some characteristics of IT skills pose challenges to both firms andindividual workers. The fast pace of technological innovations brings morecomplexity and diversity to IT tasks and skills. While individual workersaspire to be an expert in a certain domain of work, it is not easy to havea broader perspective of KSAs in the entire IT cosmos. As IT evolves,IT skills are important for not only IT professionals, but also for IT users almost everybody nowadays. Plan and manage IT skills with a goal-driven, context-specific industry experts predict, however, that there will be a mass-exodusof mid-level managers seeking a better position once the economy solidlyrecovers (McGee, 2003).2 American Heritage Dictionary of the English Language (4th edition).(2000). New York: Dell ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 23Becker, B., & Gerhart, B. (1996). The impact of human resource managementon organizational performance: Progress and prospects. Academy ofManagement Journal, 39(4), , . (1976). The economic approach to human behavior. Chi-cago: University of Chicago , ., & Thacker, . (1999). Effective training: Systems,strategies, and practices. Upper Saddle River, NJ: of Labor Statistics. (2000). 2000-01 Occupational Outlook Hand-book. Washington, DC: . Department of , . (1988). Task complexity: A review and analysis. Academy ofManagement Review, 13(1), , M. (2001). Developing IT staff: A practical approach. London:Springer-Verlag London Antoni, H. (2003). Behind the numbers: IT professionals cash in oncompany training. InformationWeek, (June 30), , ., & Huselid, . (1996). The impact of human resourcemanagement practices on perceptions of organizational of Management Journal, 39(4), , G., & Hoffman, S. (1981). The incidence and wage effects of over-education. Economics of Education Review, 1, , ., & Willcocks, . (1998). Core IS capabilities for exploitinginformation technology. Sloan Management Review, (Spring), , A. (2001). Skills shortage puts job market out of balance. FinancialTimes, (May 2).Fitts, . (1964). Perceptual-motor skill learning. In . Melton (Ed.),Categories of human learning (pp. 243-285). New York: , . (1990). Factors in complex skill training. In M. Venturino (Ed.),Selected readings in human factors (pp. 275-295). Santa Monica, CA:Human Factors Society. (Original work by Fitts published 1962.)Fitts, ., & Posner, . (1967). Human performance. Belmont, CA:Brooks/, J., & Murphy, C. (2003). 6 myths. InformationWeek, (June 30), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
24 Nakayama & SutcliffeGreen, F., Ashton, D., & Felstead, A. (2001). Estimating the determinants ofsupply of computing, problem-solving, communication, social, andteamworking skills. Oxford Economic Papers, 53(3), , F., Machin, S., & Wilkinson, D. (1998). The meaning and determinantsof skills shortages. Oxford Bulletin of Economics & Statistics, 60(2),. (2003). New ITAA study shows tech job outlook to remain soft in2003. Information Technology Association of America, Press Release,May 5. Accessed August 4, 2003, from: ., & Klein, G. (2001). Software project risks and development Management Journal, 32(1), , J. (2002). Hard times: Tech workers trying to find jobs face a bleakfuture. Computerworld, (April 29). Accessed August 4, 2003, from: ., Bowitz, J., Burn, J., & Hackney, R. (2002). Informationsystems project failure: A comparative study of two countries. Journal ofGlobal Information Management, 10(2), , ., Ash, ., Hall, H., & Sistrunk, F. (1983). Evaluation of jobanalysis methods by experienced job analysts. Academy of Manage-ment Journal, 26(2), , M. (1983). Toward a theory of career motivation. Academy ofManagement Review, 8(4), , S. (2003). IT compensation gets a dose of , (July 14/21), , . (2003). Good as gone. InformationWeek, (September 8), Group. (2002). 2003 worldwide IT benchmark report. Stamford,CT: META Group. (2003). Best practices in project estimation and perfor-mance management. Stamford, CT: META , B., & Gerhart, B. (1998). An empirical analysis of a skill-based payprogram and plant performance outcomes. Academy of ManagementJournal, 41(1), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills, Management of Skills, and IT Skills Requirements 25Noe, . (1986). Trainees attributes and attitudes: Neglected influences ontraining effectiveness. Academy of Management Review, 11(4), , . (1984). People power. Beverly Hills, CA: Sage , J. (1998). The human equation: Building profits by putting peoplefirst. Boston, MA: Harvard Business School , J., Hatano, T., & Santalainen, T. (1995). Producing sustainablecompetitive advantage through the effective management of of Management Executive, 9(1), , ., & Hamel, G. (1990). The core competence of the corpora-tion. Harvard Business Review, 68(3), , ., & Dutta, A. (1995). Skill acquisition and human perfor-mance. Thousand Oaks, CA: Sage , R. (1999). IT skills standards. Communications of the ACM, 42(4),, . (1987). The impact of surplus schooling on productivity andearnings. Journal of Human Resources, 22, , B., & Konz, . (1989). Strategic job analysis. Human Re-source Management, 28(1), , C. (2001). Assessing skills for work: Two perspectives. OxfordEconomic Papers, 53(3), , ., & Jacobs, . (1998). Toward an integrated model of workexperience. Personnel Psychology, 51(2), , . (1987). The impact of underutilization of education on produc-tivity: A case study of the . Bell companies. Economics of EducationReview, 6, , ., & Avolio, . (1993). Aging and work performance inperspective: Contextual and developmental considerations. In & . Ferris (Eds.), Research in personnel and humanresources management (pp. 133-162). Greenwich, CT: JAI , ., & Susman, G. (1987). People policies for the new Business Review, 65(2), , . (1968). Fundamentals of skill. London: , ., Snell, ., Dean, . Jr., & Lepak, . (1996). Humanresource management, manufacturing strategy, and firm of Management Journal, 39(4), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
26 Nakayama & SutcliffeChapter IIAn Approach forManaging an IT SkillsPortfolioMakoto NakayamaDePaul University, USANorma SutcliffeDePaul University, USAAbstractIn this chapter, the focus is on best practice for IT skills portfoliomanagement. To begin, we formulate the key principles or missionstatement for IT skills portfolio management based on the previouschapter. Under the principles enumerated there, this chapter outlines howto build an IT skills portfolio, and then looks at how to apply the portfolioat the firm and the individual IT professional ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 27IntroductionFrom the discussion of past studies in the preceding chapter, we develop aframework for managing IT skills at the firm level. The gist of such a frameworkis summarized in Appendix A: Birds-Eye View on IT Skills PortfolioManagement as well as in Appendix B: The IT Skills Portfolio ManagementFramework. Appendix A summarizes what this chapter presents in a B shows the skeleton of the managerial steps for planning andmanaging IT task forces at the firm the beginning, we derive key guiding principles for IT skills managementfrom the past lessons and today s business and IT environments. The firstprinciple (people-centered organization) is drawn from human resourcemanagement. We derive the second principle (multi-mission capability) fromtwo phenomena. First, today s economic and competitive conditions areforcing us to do more work with fewer people. Second, the growth of new ITtechnologies has brought us more complex interactions between IT devices andsystems, as well as between IT and organizations. The third principle (work-based learning) comes from two directions. As the pace of technologicalinnovations gets faster, IT professionals have no choice but to keep learning tostay current with IT innovations. Also, the preceding chapter emphasizes theimportance of anchoring IT skills to business and task goals. Consequently, itis important that we use these three guiding principles to construct a frameworkfor managing IT main thrust of the IT skills portfolio management framework is to focus onbusiness goals and the critical tasks for accomplishing these goals. As theappendixes show, the proposed framework binds business goals to what ITprofessionals have to do to accomplish them. The framework consists of thefollowing four steps:(1)Clearly recognize business goals.(2)Translate business goals into what IT projects have to accomplish.(3)Define IT skills based on deliverables of IT projects.(4)Determine the best option for IT skill these four steps, we use 2x2 matrices with the time dimension (now ) and the criticality assessment dimension (how crucial, how difficult, andCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
28 Nakayama & Sutcliffehow risky) to optimally allocate resources. Those matrixes are the heart ofmanaging the IT skills PrinciplesA key underlying principle in strategic human resource management (SHRM)is to regard people as a main enabler for the organization rather than as a costand/or a constraint. Under the 13 collective practices for SHRM that Pfeffer,Hatano, and Santalainen (1995) listed, the organization views the IT profes-sional as the fundamental value creator who can orchestrate the successfulapplication of IT to meet the organization s needs. With this mindset, organi-zations not only train managers and workers with new skills, but go further bychanging the structure in which the new skills are used. For example, atAdvanced Micro Systems submicron development facility, most workerscame from their older, closed facilities. Before transferring to the new facility,these workers were fully paid while attending a seven-month training programthat gave them the needed new collective practice is cross-utilization with cross-training. Tradition-ally, when the market conditions deteriorate, people with unneeded skills arelaid off to free up resources for hiring new people with needed skills. Thedownside is that the new people do not have the firm specific skills that thelayoffs had, and it will take time for them to get those skills. But with cross-training and cross-utilization, people have skills in several areas and can be usedwhere the need the 1980s, Mazda was not selling cars at the same pace they were producingcars. So Mazda took factory workers off the production lines and sent them outselling cars, which in Japan are often sold door to door. At the end of the year,Mazda found that all of the top 10 sales people came from the factory. Whywere they so effective? They had the specific knowledge on the products andservices that can only be gained at the firm. They knew the cars so well becausethey had made them and could answer customer concerns very sales had improved and these employees went back to the factory, theythen used their sales knowledge to improve auto ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 29Principle 1: People-Centered OrganizationThink of people before thinking of IT skills and KSAs, which are the essentialbuilding blocks for delivering performance. Whereas skills are demonstratedcapabilities or goal-directed, well-organized behavior that is acquired throughpractice and performed with economy of effort (Proctor & Dutta, 1995), theabilities of people are the growth potential. Thus, the wise managers start withlooking at abilities of the people available. When they hire, they hire ITprofessionals for the firm, rather than for just a specific set of tasks. They utilizetheir IT professionals for their abilities, or their potentials, before lookingoutside for the first programmable computers of the 1940s to now, the skills neededto use computers constantly change. The skills needed to program the early Univacs are vastly different from the skills needed to develop software fortoday s inter-organizational application systems, such as supply chain manage-ment. Keeping up to date with such changes is impact of change appears at three levels. First, a new computing innovationarrives, with existing computing hardware and software improving marginallyor significantly over time in response to the innovation (Hock, Roeding,Purkert, & Lindner, 2000, pp. 259-271). Thus, mostly technical skills areneeded to respond to such changes (the first-order effect of IT change). Inaddition, new, improved IT is applied in business, economic, and socialFigure 1: Knowledge, Skills, and Abilities (KSAs) Performance Delivery Skills (Demonstrated Capabilities) Abilities Knowledge (Potentials) KSAs Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
30 Nakayama & Sutcliffecontexts, and the skills of how to apply IT in turn change over time (the second-order effect of IT change). Those changed business, economic, and socialpractices consequently loop back to the future requirements or desires for ITinnovations, or the change planning (the third-order effect of IT change). Theresult of such spiraling evolution is inevitable uncertainty. Also, under a tightfiscal environment, IT and business innovations result in efficiencies of work atall levels that is, IT and non-IT professionals accomplish the same or morewith fewer resources (., time, man-hours, budget) than they did in the implication is that IT professionals are asked to have what the military calls1 multi-mission capability. Principle 2: Multi-Mission CapabilityIT professionals are capable of playing several critical roles for the firm. Theyare capable of performing tasks from one critical skill domain, but they are alsocapable of performing tasks from other critical skill domains as the dawn of the Internet era, IT professionals already started facingincreasingly complex tasks. For example, a narrow, traditional definition of programmer is not quite indicative of what the current programmer isrequired to do (Mack & Dec, 1997). The recent squeeze on the economyfurther pushed companies to combine the responsibilities of several positions,so that work can be done with a lower headcount (McGee, 2003).With a multi-mission capability, an IT professional may be an expert and valuedcontributor on a database management system, but she also possesses the skillsto lead an inter-organizational IT project involving her firm s trading other words, she has industry knowledge and experience to manage aproject while honing her competency in database in traditionally managed IT organizations, the idea that IT profes-sionals are multi-dimensional in their personal skills portfolio is alien to upperIT management, partly because they lack in-depth knowledge of the IT staff sabilities. The project managers know, but their managers lack this will discuss more on this lack , IT managers do not consider their current pool of talent whena new IT need arises. These managers usually consider only hiring newpersonnel, the doing without option, using consultants, or outsourcing to fillthe need. By recognizing and utilizing the multi-mission capability of their ITCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 31professionals, management can strengthen individual and team motivation,reduce coordination costs, and increase , we constantly need to frame skills in terms of task and project focus on the aims that the skills will fill is often lost or blurred if the skillsare not framed in this fashion. Thus, tying skills to project goals reinforcesattention. Another reason is that the learning takes place best in the context ofwork where people perform using skills supported by knowledge and , it is important to have programs in place to foster applied, ongoinglearning in the 3: Work-Based LearningIT professionals are capable of constant learning in several critical skilldomains. They learn as they work and through their work. They also learn fromone another while also improving their firm-specific skills through their appli-cation of technology to their organization s we need now is an HRM approach to realize the best practice of ITskills management by following the above three principles. The followingsections describe how we Skills Portfolio ManagementWe first look at some background behind IT skills portfolio management. Wethen look at how a firm develops its IT skills portfolio and how a firm can usethe portfolio. In finance, a portfolio is a collection of investments held by aninstitution or a private individual. By extension, here we are looking at thecollection of IT applications that an institution is IT skills portfolio management an important tool? To answer thisquestion, a little background is needed. Most firms today organize IT systemsdevelopment efforts on a project basis rather than on the traditional functionalbasis. Under this functional structure, projects were divided between theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
32 Nakayama & Sutcliffesystems group whose analysts specified what was to be done and theprogramming group whose programmers actually developed and tested thesystem. Now under the project structure, all personnel working on the projectare together on one team with a project leader/manager whose primaryresponsibility is to keep the project on contrast, when projects moved between different functional groups, eachfunctional manager s primary responsibility was to operate efficiently byleveraging all available resources. The programming manager knew eachprogrammer s expertise and could match skills to particular tasks regardless ofthe project. So, a programmer could and often would work on severalapplications during the same timeframe. The downside of this functionalarrangement was that project deadlines often slipped because no one wasaccountable for the project. They were only responsible for getting particulardeliverables accomplished. Now, with the project orientation, the overallproject schedule is kept , the downside of using a project structure is leveraging IT skillsacross a number of projects. It is very problematic because no one has detailedknowledge or has the responsibility for matching skills to deliverables frommultiple projects. Project leaders do have detailed knowledge of the skills ontheir project team, but also have powerful incentives to keep that knowledgeto themselves. If that knowledge became known, their project deadlines couldbe compromised with the loss of those skills to a higher priority project. Betterto keep quiet until the end of the skills portfolio management solves this problem. From the IT Projects Set,the IT Deliverables Set is built which is the basis for establishing the IT skillsportfolio. All members of the IT management team are involved in all steps ofportfolio construction. With this tool, management can see what skills areneeded for the most important deliverables and when they are needed, whatskills are in abundance, what skills can be developed, what skills to obtainthrough outsourcing and in-sourcing, and what skills are no longer logical starting point for effective IT skills management is to focus on thedeliverables from the projects aimed at satisfying the firm s business and ITstrategic goals. In other words, consolidating the project deliverables from allthe projects becomes the basis for building the IT skills portfolio. Deliverablesare also known as task performance goals for skills to aim at , the examination of deliverables is not enough. It is also important torank the deliverables based on how important they are to the organization, howdependant they are on external factors, and how risky they are. Yet, beforeCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 33examining the deliverables, it is important to step even further back to a firm sstrategy and strategic Steps to the IT Skills PortfolioThe major thrust of IT skills portfolio management is the management of goalsand project/task deliverables (Figure 2). It is business goals that determinewhat deliverables the current and future IT projects should provide. And thesedeliverables dictate what IT skills portfolio the firm must current IT applications and planned future IT projects determine suchdeliverables. This framework assumes that all IT projects are approvedbecause their implementation will further the achievement of the organization sstrategic business goals. Why is this assumption important? When IT isnegotiating with top management for scarce resources, the link to strategicbusiness goals is an essential justification. So, by extension, all IT strategic goalsare linked to the strategic business 2: The Goal-Driven, Context-Specific Approach for IT SkillsManagement Business Context Business Strategic Goals IT Strategic Goals IT Application Portfolio Organizational Context Deliverables Portfolio IT Skills Portfolio IT Skills Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
34 Nakayama & SutcliffeIn the NIBCO case (Brown & Vessey, 2001), top management of this mid-sized manufacturer of valves and pipe fittings determined that their majorstrategic thrust was to increase customer service capabilities. The primarybusiness goal then became reengineering their supply chain to increase flexibil-ity in meeting customer needs. That strategic business goal necessitated thereplacement of the current IS systems with integrated ERP suites for finance,materials management, production, and sales/distribution (IT strategic goal).Thus, the IT goal for replacing existing legacy systems with integrated ERPapplication suites determined the , to define and rank IT deliverables, which are also known as the taskperformance goals that IT skills accomplish, we need to use a top-downapproach. In response to its business context, the organization formulates itsbusiness strategic goals. Along with the organizational context, these goals arethe basis for the IT strategic goals that the current and future IT applications aimto satisfy. From examining the IT Projects Set, the IT Deliverables Set isassembled. Because the deliverables are task performance goals that the ITskills satisfy and the deliverables determine the specific needed skill, theDeliverables Set is used to determine the IT skills portfolio (see Figure 2).Overall Classification SchemeWhen delivering the hierarchy of goals, one critical issue is how to strike abalance between the current and the future. The other critical issue is thecriticality. When assessing projects, deliverables, or skills, the level of critical-ity is assessed along the following three dimensions: How crucial is the item for accomplishing the defined goals in businessstrategy, project, and deliverables, respectively? How difficult is the item to accomplish because it is inherently complex,has numerous integration points with other IT applications, or uses newtechnology? How risky is the item due to its reliance on scarce resources?In other words, projects, deliverables, and skills are assessed in the two-dimensional matrix consisting of the time dimension and the criticality dimensionof impact on goals, difficulty in doing, and reliance on scare resources. Thisapproach is IT skills portfolio analysis. To gain an appreciation of the powerof portfolio analysis, we now look at how it is used in ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 35The concept of portfolio analysis is rooted in financial investment portfolioanalysis (., Ellis, 1971; Moore, 1971). Such analysis provides investors witha bird s eye view on their financial resource allocations, together with theinformation on returns and risks. Boston Consulting Group (BCG) appliedportfolio analysis for managing strategic business units at the corporate level(Hax & Majluf, 1983; Porter, 1980, pp. 361-367). Using their Growth-ShareMatrix (see Figure 3), the firm can assess risk and return, from now and thefuture, dynamically. Somewhat similar is Ansoff s Matrix (Ansoff, 1965) thatgives an overall picture on the firm s marketing strategies. This matrix (seeFigure 4) shows what marketing strategy to use depending on whether theproducts are for existing or new markets, and also depending on whether theproducts are new or 3: BCG Growth-Share Matrix Relative Market Share High LowStars Question Marks High Market Growth Rate Dogs Cash Cows Low Figure 4: Ansoff Matrix Existing Products New Products Existing Market Penetration Product Development Markets New Market Development Diversification Markets Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
36 Nakayama & SutcliffeFirms use the BCG matrix to categorize their strategic business units (SBUs)on two dimensions the market growth rate and the relative market share sothey can rationally distribute their resources to those units with the SBUs that have a high market share in a growing market are stars. They deserve the most resources to assure they keep and expand their contrast, SBUs that have a low market share in a growing market are question marks. Because they lack share but are in a growing market, makingadditional resource investments is questionable and requires careful analysis. Acareful analysis of an SBU s potential against its competitors might show thatinvesting additional resources translates into growing market share. In contrast,if the competition has sustainable advantages that are difficult to combat, thenmoving the SBU into markets with more potential or selling the SBU are themost viable SBUs operating in markets with only low growth potential, substantialresource investment is not advisable. The cash cows have high market shareand have profits that can be diverted to either the stars or question marks. The dogs have low market share in a low growth potential market. The mostviable options are either moving into different markets, or closing or selling as the BCG matrix is used to clarify resource investment strategies, theAnsoff Matrix provides a specific growth strategy dependent on the SBUproducts and markets. There is less risk with existing products than with an SBU has existing products in an existing market, then the marketpenetration strategy is appropriate. The aim is to increase market share,leveraging existing there is a saturation point for any product in any market. Whenreached, either expanding into new markets and/or new products is the nextstep. If the firm wants to stay in existing markets and leverage their reputationand core competencies, then product development is the appropriate market-ing contrast, when an SBU takes existing products into new markets, thenmarket development is appropriate. This is often risky because the knowledgeof the new markets is ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 37However, the most risky is diversification where new products are beingbrought into new markets. Not only is there scanty market knowledge for thenew products, but there is also scanty product summarize, both BCG and Ansoff matrices are mechanisms for rankingentities for the potential risk and gains. They clarify for managers where thepayoffs are most likely, where investments have potential, and where they donot. They are tools for portfolio spirit of portfolio analysis is to prioritize resource allocations at the firmlevel. Portfolio analysis is a great tool to assess the current and futureprospects of risks and returns. However, just using portfolio analysis alonedoes not end the ongoing management of skills. It has to be complemented withguidelines on the best IT skills management IT Skills Portfolio ProcessDeveloping and using an IT skills portfolio consists of four main steps. The firststep is to clearly define strategic goals for the business and for IT. The secondstep is to develop the IT Projects Set along with the IT Deliverables Set. Thethird step is to translate the task goals from the Deliverables Set into the IT skillsportfolio. The final step is managing IT skills using the IT skills portfolioguidelines. As mentioned earlier, this process requires the participation of theentire IT management team, not just its top 1: Clarifying Strategic Goals Business and IT Strategic Business Goals. Prepare a statement defining each strategicbusiness goal. Although a goal does not have to be quantitative, it isimportant that the goal s evaluation method is clearly stated. There is anold adage that all goals are important, but specific, measurable goals aresuperior to vague goals, which are superior to no goals. Thus, goalstatements are superior in that are specific and clearly detail how progressis measured towards attaining the goal statements that rely on vague aspirations, such as, We wantto be known as the best in the market, are almost doomed to failurebefore they start. Why? Best in what? How would anyone know if they areCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
38 Nakayama & Sutcliffethe best or the worst? Asking those questions often clarifies contrast, look at this excellent goal Within five years we will have atleast 25 Fortune 500 clients with a minimum of $5,000,000 in annualbillings. This goal has a timeline, a quantitative measure, and a clearlydefined target. Every month it is easy to determine how close the firm isgetting to attainment. Another good business goal is: Within two years wewill bring five new products to market every month. Strategic IT Goals. Prepare a statement defining each strategic IT goalemphasizing goals specific to the IT domain. A business goal does notnecessarily have associated IT goals, but an IT goal should have at leastone associated business goal. For IT, it is useful to document explicitly therelationship between an IT goal and its associated business goals, whencompeting for business resources with others in the as business goals aim for specificity, so should IT goals. An excellentIT goal is: Within three months after going into production, the new callcenter will process a minimum of 3,500 calls per day, averaging less thanfive minutes per call for satisfactory resolution. While not monetary, thisgoal is still measurable with a timeline, the number of units (calls), and thesize of the ideal unit (less than five minutes). The related strategic businessgoal is to raise the customer retention rate to 40% by the end of the fiscalyear. Rank the strategic business goals in importance to the firm, with 5 beingmost important and 1 being trivial. Rank the strategic IT strategic goals using the same scale. Pitfalls and how to avoid major pitfall is formulating IT strategic goals that are unaligned toany current business strategic goals. The obvious difficulty is thatsupport is usually ephemeral and weak. Gaining support outside ofIT is nearly impossible because the rest of the organization cannotrelate to the or vague strategic goals make execution difficult. Whereasspecific goals motivate efforts, weak goals are not easy to commu-nicate and are difficult to ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 39Step 2: Developing the IT Projects Set & IT DeliverablesSet Projects: List all known IT projects. This list is the foundation for theProjects Set and Deliverables Set, and then the IT skills portfolio. For Each Project:oProject Identifier: Unique and IT Goal Link: List all goals that the project aims to : Identify whether ongoing (0-2 years from now) orfuture (starting from 2-5 years).oResources: Identify the level of resources (RC) needed (1-5 forfew to extensive) and the length of time the resources are needed (inyears).oCriticality: Score the Criticality (C) of the project for the successof its underlying IT strategic goals (1-5 from not important to veryimportant).This score is later used for a project Assessment Score (AS), whichalso needs the project s difficulty (D) and project s risk level (R).The latter two scores are based on all deliverables for a now turns to an examination of each deliverable. It thenbecomes possible to calculate the project s AS. Deliverables: List all known deliverables on each IT project. This list isthe foundation for the Deliverables Set and then the IT skills portfolio. For each Deliverable within a project and then for the project,calculate scores on two attributes:oDeliverable Descriptor (dp): Unique for every deliverable, butsubstantially the same for the same performance tasks in Identifier: For the : Rank (0: not applicable, 1-5: from easy to impossible)for each deliverable its current level of difficulty (d), then calculate theproject difficulty (D) score as the average of all the deliverabledifficulty ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
40 Nakayama & SutcliffeExamples of high difficulty are a dependence on an enterprise-widedatabase; a dependence on new, unproven technologies such as gridcomputing; and a high level of integration with other Level: Rank (0: not applicable, 1-5: from low to high) for eachdeliverable (r), then calculate for the project the risk level (R) scoreas the average of all the deliverable risk level of high risk level are a reliance on scarce resources,reliance on resources controlled by others, and inadequacy ofcontingency plans. Deliverables Set: To recap, the list of deliverables for each project nowhas each deliverable s descriptor (dp) risk level (r) and difficulty score(d). It is now possible to group all the same deliverables from differentprojects together. Projects Set continued: To recap, each project now has:oresource needed score (RC) which is 1 to 5 for few to extensive,odifficulty (D),orisk level (R),ocriticality score (C), andothe length of time needed (in years). Now it is possible to calculate the project Assessment Score (AS) which is the average of Criticality (C), project difficulty score (D), andproject risk level score (R) and note results in the Project Portfolio. This Assessment Score (AS) is a quick indication of what projectsrequire more managerial oversight for successful completion. Also, thepattern of D = difficulty, R = resources, and C = criticality indicatesthe appropriate managerial actions to C is much higher than D or R, accelerating the schedulewithout adding excess resources is a very sound decision because itincreases IT credibility with other parts of the C and D are higher than R, adding more resources can makesure the project is well covered. However, if adding resources is notfeasible, then a careful analysis that clarifies the risks with tactics formitigating them is very C and R are higher than D, it is a flag that outsourcing theproject may be feasible. If the project is not highly integrated withCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 41other IT applications, then using an outsourcer can free up scarcehuman resources for other C is lower than D and/or R, it is a clear indication that thesuccess is problematic. It is difficult and it needs resources, but is notstrategically crucial. Potentialities: List potential factors in the Projects Set that may posi-tively and negatively affect project success. Some factors are: applicationof organizational changes, business climate changes, technology changes,labor market changes, and so forth. Pitfalls and how to avoid projects not clearly linked to IT strategic business goals. Withoutthat link, success is very inability to group similar deliverables because of the use ofidiosyncratic descriptions. To avoid this problem, use generic deliv-erable descriptions that can be used in a large number of differentprojects. Ideally before starting the skills portfolio managementprocess, IT staff will examine all project plans, and code thedeliverables and skills using the same 3: Developing IT Skills Portfolio Using the Deliverables Set developed above, develop the IT each major skill (SK) needed for each deliverable within and note for each SK the following scores in range (1-5: from little to much): its criticality (sc) score for its deliverable; its difficulty (sd) score for its deliverable; its risk level score (sr) for its deliverable; its assessment score (sas) for its deliverable as the average ofsc, sd, and sr; its timeframe current (within 2 years) or future (2 to 5 years); its requirements how much of the skill is needed (sq).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
42 Nakayama & SutcliffeoNow, group together all SK. This gives the picture of what projectsare currently using that skill, what projects need that skill in the future,and how many projects need that skill. Pitfalls and how to avoid too many skills. To avoid, you need to look at a group of taskstogether and figure out what are common skills. If needed, defineskills in your own too many Projects and Deliverables sets. The number of setsshould be in scale with the size of the 4: Using the Skill Portfolio Sourcing MatrixBased on the timeframe and assessment score sas (see Figure 5, SkillsPortfolio Sourcing Matrix), management can determine the best approach foracquiring the needed the skill is needed currently and has a high assessment score (sas),management needs to use critical sourcing. In other words, management buysthe best possible skill level available. It can be outsourcing or hiring ortransferring from within. Management s goal is to make sure that the scheduleand level of quality are kept at a high the assessment score is low for current projects, best sourcing is theappropriate approach. Under best sourcing, there are two options. If the skillsare already available at the firm, then those skills are used, otherwise outsourcingis the 5: Skills Portfolio Sourcing Matrix Timeframe Current Future Assessment High Critical Sourcing Training/Hiring Score (sas) LowBestSourcingOutsourcing Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 43When the skills are for future projects that have a high assessment score,management has time to plan for either training for and/or hiring those there is a low assessment for the skill, outsourcing is appropriate forfuture projects. There is no need to hire or train for these skills. Reviewing skills with high assessment scores, identify IT personnel whopossess those skills, and who possess multi-mission capabilities that canplay key roles in leadership, critical task/skill delivery, group manage-ment, and crisis management. Around critical IT personnel are IT professionals who need to further theirskill development and/or their multi-mission capability. Devise a systemwhere KSAs are continuously enhanced through work and supportingmechanisms such as knowledge management and HR practices, espe-cially mentoring. Pitfalls and how to avoid skill sourcing decisions. They are typically due to shortchanging process in the first three steps. It is essential that strategicgoals, IT projects, and deliverables are analyzed carefully technology and product life cycles. Periodically manage-ment must monitor and re-evaluate technology and product lifecycles, particularly for highly assessed lack of occasional revisions. The management should revise theirProjects Set, Deliverables Set, and IT skills portfolio, wheneverthere is a significant change in business goals, IT goals, organizationalsituations, key technologies, and/or important products/ Practices for the FirmThe following practices and insights are important as the foundation for goodskills management. While skills are important, they are not the end but the means to the end,which is strategic goal attainment. Therefore, organizations need toemphasize and communicate the business and IT strategic goals with ITprofessionals. The IT professionals need to know the critical deliverablesCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
44 Nakayama & Sutcliffefor a five-year timeframe so they can see what skills are important to thefirm. Let IT professionals self-manage their skill levels and give them theincentives to do so. It is important that management communicate theincentives to all employees along with the critical deliverables mentionedabove. In this way, organizations can guide employees towards the mostneeded skills; the organization can also determine who is most motivated. Reward the attainment of deliverables, not just possession of desiredskills. That does not mean that the organization should not give tuitionsupport; rather it means that bonuses and promotions are tied to thesuccessful attainment of goals through the application of skills. Analysis of major skills or job/task major skill categories, ideally somewhere between 5 and key requirements (including a few critical ones, but no more than5 in total) for each your firm has more than 20 categories, consider consolidating theminto fewer than 20. The idea is to keep the household tasks of ITworkforce management as simple and flexible as possible. This alsoforces the use of job rotations to build a more flexible IT workforce. Pay particular attention to those KSAs that are specific to the corebusiness operations in your firm. Those KSAs can never be outsourced;they can only come from within the organization. Conduct an assessment analysis and prepare contingency plans whenunfavorable events are likely, and their impact level and probability can beestimated. Hire and develop IT professionals for the firm, rather than for a position. Emphasize to the IT professionals the importance of possessing multi-mission capability. The most important skill is the skill to learn. Identify the few critical IT personnel; prepare retention and ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 45Skills Portfolio Management for theProfessionalJust as the firm needs to manage the various skills available, so the ITprofessional needs to keep an eye on the current needs for skills, the desiredlevel of expertise for the skills, and what the future desired skills are. Thus, theprofessional uses the following process to keep up-to-date. Determine your skills at the following three levels:oindustry/firm specific KSAs, such as expertise in health care claimsprocessing, accounting systems for non-profits, and so forth;otechnology specific KSAs, such as expertise in database servers,Linux-based online transaction procession, C#/VB .NET program-ming, and so forth;oorganizational (team, project, management) KSAs, such as projectplanning, manpower planning, and so forth. Assess your current level of competency in the above three KSAs. Define your career skill path (not the same as career path ) for the nextfive years. That is, where are you weak and need additional training?Where do you want more experience? What areas do you want to avoid? Make sure that you have more than one competency so you haveflexibility. Identify the gap between your current competency and required compe-tency for the areas you want to work in. To summarize, your most important skill is your skill to chapter started with a discussion of the principles that guide the develop-ment and use of a skills portfolio. Then attention turned to management of theportfolio. Background was presented on how the portfolio answers realproblems in managing the skill needs for a multi-project IT organization. Adetailed plan for developing the IT skills portfolio follows that starts with thebusiness strategic goals for the organization. With the IT skills portfolio built,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
46 Nakayama & Sutcliffeit is now possible to answer the IT skills sourcing concerns. With that done, thechapter ends by looking at the best practices for the firm and for the limited budgets, the . military often stresses the importance of multi-mission capability when it develops and deploys equipment andtask forces. For example, some aircraft such as the F/A-18 Hornet of theNavy have the combined capability of both fighting (dog-fighting) andattacking (bombing) against the opponents. The Joint Strike Fighter (JSF)program of the . military aims to deliver the next-generation aircraftthat can be deployed for a variety of military objectives in the Air Force,Navy, and Marine , . (1965). Corporate strategy. New York: , ., & Vessey, I. (2001). NIBCO s big bang. Communications ofthe Association for Information Systems, 5(1). Accessed September2003 from: . (1971). Portfolio operations. Financial Analysts Journal, 27(5),, ., & Majluf, . (1983). The use of the growth-share matrix instrategic planning. Interfaces, 13(1), , ., Roeding, ., Purkert, G., & Lindner, . (2000). Secrets ofsoftware success. Boston, MA: Harvard Business School , R., & Dec, K. (1997). Transition strategies (TS), building astrategic plan for an information technology transition. GartnerGroup, April , . (2003). Good as gone. InformationWeek, (September 8), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 47Moor, . (1971). Economics and investment analysis. Financial AnalystsJournal, 27(6), , J., Hatano, T., & Santalainen, T. (1995). Producing sustainablecompetitive advantage through the effective management of of Management Executive, 9(1), , . (1980). Competitive strategy. New York: The Free , ., & Dutta, A. (1995). Skill acquisition and human perfor-mance. Thousand Oaks, CA: Sage ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
48 Nakayama & SutcliffeAppendix A: Birds-Eye View on ITSkills Portfolio Management Business & IT Goals IT Projects Portfolio IT Deliverables Portfolio IT Skills Portfolio Skills (Demonstrated Capabilities) Knowledge Abilities (Potentials) Knowledge Management Mentoring Supporting Systems Key Principles People-Centered Organization Multi-Mission Capability Work-Based Learning Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 49Appendix B: The IT Skills PortfolioManagement FrameworkThree Key PrinciplesPrinciple 1: People-Centered OrganizationThink people ahead of IT and KSAs. IT professionals are hired for the firm,rather than for a specific set of 2: Multi-Mission CapabilityIT professionals are capable of playing several critical roles for the firm. Theyare capable of performing tasks from one critical skill domain, but they are alsocapable of delivering critical tasks from other critical skill 3: Work-Based LearningIT professionals are capable of constant learning in several critical skilldomains. They learn as they work and through their Process of IT Skills Portfolio ManagementStep 1: Clarifying Strategic Goals Business and IT Prepare a statement on each strategic business goal. Prepare statements on each strategic IT goal. Rank the business strategies and goals in importance to the firm. Rank the IT business strategies and goals within the associated businessstrategies using the same ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
50 Nakayama & SutcliffeStep 2: Developing IT Projects Set & Deliverables Set Develop IT Projects all known projects with unique whether a project is ongoing (0-2 years from now) orfuture (starting from 2-5 years).oIdentify the level of resources needed (1-5 for few to extensive) andthe length of time needed in the Criticality of the project (C) for meeting the strategic goals(1-5 for from trivial to crucial).oScore the Assessment (AS) of the project after developingDeliverables Set as below. Develop Deliverables the project s Deliverables with a descriptor, and its scores ondifficulty and risk the list of deliverables, with each deliverable s risk level(r) and difficulty score (d), along with deliverable s project criticalityscore (c).oIdentify the level of resources needed (1-5 for few to extensive) andthe length of time needed (in years). Calculate the project Average Scores from the project s deliverables:oRisk Level (R) as the average of deliverables risks (r)oDifficulty (D) as the average of deliverables difficulties (d)oCriticality (C) as the average of deliverables criticalities (c) Calculate the project Assessment Scores (AS) as average of C, D, on the Assessment Scores, evaluate resource contingencies, and evaluate their 3: Developing IT Skills Portfolio Using the Deliverables Set developed in Step 2, develop the IT ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Approach for Managing an IT Skills Portfolio 51oList each major skill (SK) needed for a and note for each SK its criticality, difficulty, and risk levelscores, as well as its timeframe and how much and how long the skillis those skills (sas) by using the three criteria: criticality,difficulty and risk the assessments in the IT skills 4: Using Portfolio Matrix Based on the IT skills portfolio, assess and determine the best skillsourcing option. Identify (or define if it does not exist) critical IT personnel. Around critical IT personnel, devise a system where KSAs are continu-ously enhanced through work. Consider using knowledge managementand mentoring if Current Future High Critical Sourcing Training /Hiring Assessment (sas) Low Best Sourcing Outsourcing Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
52 Mirza & ChanChapter IIIChallenges forManaging IT SkillsPortfolio forE-BusinessAbdulrahman A. MirzaKing Saud University, Saudi ArabiaSusy S. ChanDePaul University, USAAbstractOrganizations are under increasing pressure to adopt Internet-based e-business solutions for improving internal efficiency and collaborationwith partners, suppliers, and customer firms within the environment of e-business webs. To realize these benefits, companies must transitiontowards an e-business organization. Such transformation demands ITknowledge and expertise at different levels. Each level requires special ITskills introduced as a result of the complex and dynamic nature of an e-business environment. In this chapter we examine the e-businessenvironment and its implications for firm-level IT skills portfoliomanagement. We then present five levels of challenges related to an e-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 53business firm s IT skills requirement. We further present: (1) future trendsrelating to the changing landscape for e-business IT skills; (2) activitiesthat support acquisition, development, and maintenance of these skills;and (3) the gap between academic programs and e-business needs. Inconclusion, we propose a research spite of recent economic slow down and dot-com failure, e-businesscontinues to grow at a consistent rate. A 2002 projection by ForresterResearch forecasts online retailing to grow at a cumulative annual growth rateof 25% to reach a sales volume of $ billion by 2007 (Hirsh, 2002). Recentestimates of B2B transactions for 2003 stand close to $ trillion, nearlydoubling the 1999 Forester Research projection of $ trillion by 2003(Mullaney et al., 2003). In Europe, B2B e-commerce transactions have grownat an annual rate of 100%, reaching $200 billion in 2002, a fourfold increasefrom B2B transactions in 2000 (Reinhardt & Majidi, 2003). In China, thenumber of Internet users is expected to increase 1,184% by 2006 (Vinas,2002). These figures affirm the continued growth of the Internet and corporate adoption of Internet-based initiatives has accelerated themovement towards a tighter collaboration among companies along the industryvalue chains. By implementing integrated enterprise systems, partner firms aimto improve the quality of services and products, and the speed of market entryand penetration. These types of business relationships, established mainly forthe improved customer experience, are called e-business webs (Kalakota &Robinson, 2001; Tapscott, Ticoll, & Lowy, 2000). The impact of the Internethas expanded from the initial phase of transaction-based e-commerce, to firm-based integration of Internet strategies, to industry-wide collaboration. Suchtransformation demands firms to undertake different approaches to managinginformation technology (IT) services and human advancement of information technology further complicates the difficultyof managing IT personnel. Researchers have advocated an IT skills portfolioapproach to managing a firm s IT skills and developing appropriate strategiesfor meeting its changing needs (Nakayama & Sutcliffe, 2001). For companiestransitioning towards an e-business environment, IT skills portfolio manage-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
54 Mirza & Chanment has to go beyond the organizational boundaries to consider requirementsimposed by the collaborating partners in e-business propose to examine IT skills portfolio issues within the context of emerginge-business webs from a firm s perspective. Specifically, this chapter will: (a)identify the unique characteristics of e-business and its implications for firm-level IT skills portfolio management; (b) discuss specific skills requirements tosupport e-business transformation at five levels; (c) examine relevant trendsaffecting the dynamic nature of e-business IT skills management; and (d)propose research E-Business EnvironmentThe Internet has a profound impact on companies. Industry-wide adoption ofInternet-based business solutions has moved information systems beyondenterprises boundaries (Alter et al., 2001). These e-business initiatives havecontributed to significant economic growth through cost reduction, processimprovement, customer satisfaction, and increased profitability (Varian, Litan,Elder, & Shutter, 2002)E-business, a major driving force in today s economy, is seen as the topconcern among the 10 hottest issues of information technology (Kanter, 2003).Kalakota and Robinson (2001) define e-business as the complex fusion ofbusiness processes, enterprise applications, and organizational structure nec-essary to create a high-performance business model (p. xx). In the context ofsupply chain integration, e-business refers specifically to the planning and theexecution of the front-end and back-end operations in a supply chain using theInternet (Lee & Whang, 2001, p. 2).Firms seeking to leverage the full power of the Internet in conducting andgrowing their businesses need to transform themselves into e-business organi-zations. E-business transformation requires dramatic changes in strategy,organization, process, and systems. It also involves rethinking the entire orderfulfillment process, extending from customer to supplier, requiring significantchanges in the way employees do work, and how a company organizes itssupply chain and purchasing processes (Neef, 2000).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 55For e-business organizations, intra- and inter-organizational processes andcommunications are managed through Internet-based enterprise systems include systems for enterprise resource planning (ERP),customer relationship management (CRM), supply chain management (SCM),e-procurement (EP), business intelligence (BI), and enterprise applicationintegration (EAI). These systems make the enterprise-wide sharing of informa-tion much more effective and efficient. For example, e-procurement enables afirm to handle value chain management processes such as requisition, purchaseorder, invoice, and payment more efficiently through horizontal or vertical B2Be-hubs. Application service providers (ASPs) such as providecompanies with sales force management software that can be leased and usedthrough the Internet. Furthermore, ERP systems are no longer used only forintegrating internal business functions. These systems can extend beyondenterprise boundaries to link to supplier, partner, and distributor firms ERPsystems for supply chain today s e-business web environment, the customer is seen as the most criticaldriving force for organizational success. A satisfied customer is a loyalcustomer willing to return for repeat purchases. Customers are becomingincreasingly intelligent in defining their expectation for the desired products and/or services, quality, price, and speed of delivery (Barua, Konana, Whinston,& Yin, 2001). As illustrated in Figure 1, in this customer-centric webenvironment, suppliers, manufacturers, distributors, retailers, and transport-Figure 1: Customer-Centric E-Business WebRetailersTransportersProducts/servicesSpeedyCustomerQualityDeliverySuppliersDistributersCompetitivePriceManufacturersCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
56 Mirza & Chaners collaborate together in a continuous cycle towards satisfying the customer e-business environment is characterized by the dynamic interactionsamong its member firms. As illustrated in Figure 2, a member firm in the e-business web environment may represent any player along the path of a givenindustry s supply chain. An e-business firm in such a dynamic environment mayhave most, or all, of its primary value chain activity systems, such as operations,logistics, marketing, and sales, virtually linked to systems of other members ofthe e-business web. A firm may also have most, or all, of its secondary valuechain activity systems, such as administration, human resources, accounting,and procurement, run or administered by ASPs who are members of the e-business web environment. Therefore, firms interact with one another in a semi-borderless network through one-to-one and one-to-many direct relationships,or through consortia and online business models and technologies affect the state of e-business andcause it to be in a constant state of change. One simple example of such newdevelopments is what is known as Web services (Lim & Wen, 2003). Webservices promise to provide a new technological solution where firms cansearch for and consume services provided by other firms, eliminating the needto develop those services internally. Such technology advancement createsFigure 2: E-Business Dynamic EnvironmentSuppliersConsortiaManufacurersASP sInboundLogisticsAdministrationOperationsHuman ResourcesInfo. SystemsProcurementOutboundCusFinance/AccountingtomerLogisticsServiceE-Business FirmCustomersTransportersMarketingSalesExchanges/HubsDistributorsRetailersE-BusinessE nvironmentCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 57new demand on the IT staff responsible for running a firm s e-businesstechnology infrastructure. It is a complex operation for them to meet differentrequirements of partners, suppliers, distributors, and customers. Additionally,they have to ensure the security of confidential data and organizationalstrategies in view of competitors e-business web environment poses many challenges for a firm s IT staff(Atler et al., 2001). In-house IS specialists have to shift their focus frombuilding and maintaining internal systems to system integration. Increasingly,they have to provide IT support for both internal users and heterogeneousexternal customers. Systems that were traditionally developed and managed asinternal resources are now increasingly being developed and managed asexternal resources. These changes imply that system developers need toacquire a better understanding about inter-organizational behavior and thevalue chain essential to an e-business web. Chan and Mirza (2003) haveproposed a framework for identifying IT skill sets essential to e-businesstransformation. As shown in Table 1, companies need to acquire new ITTable 1: A Proposed Framework for E-Business IT Skills Portfolio (Chan& Mirza, 2003)Factors Issues IT Skills Requirements Architecture Application architecture; Internet/Web architecture; Application architecture; Distributed systems; Network administration; Database management; Infrastructure architecture Middleware; Security; Document management; Collaboration; Information Information management; Knowledge structuring & architecture management; Technology planning; E-business strategy Implementation ERP and Web systems Systems integration; SCM, CRM, IM; Data integration; Effective project warehousing, Data mining; Project management; management; Interpersonal skills; Process re-engineering Process change management; Enterprise systems; Integration of Web systems and enterprise systems Organization Process change driven by external ERP, CRM, SCM; Change management; Human Change demand; Permeable factors organizational boundaries; External users and consumers; E-collaboration Application A shift of development efforts Project management; E-business analysis; Development from simple Web development to Structured programming methods; Web analytic capability and development and design; Object-oriented system/application integration; development; Data mining Web-based interface design Human computer interaction; Workflow analysis; Domain knowledge Tools and Wide-range of tools and Unix, Linux, Windows; .Net technologies; CGI, Technology technology; New tools and Perl, C++, C#, ASP; PHP, SQL, MySQL, XML, technology; Lack of Java, SOAP, UDDI, WSDL, ebXML standardization; Proper education and training Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
58 Mirza & Chanknowledge and skills in distributed systems architectures; prototyping in Web-based systems development; and business and systems integration, enterprisesystems, integration of Web-based systems, and enterprise Skills Portfolio ManagementRapid technology advancement has made the shortage of IT skills a chronicproblem for firms. For better control of a firm s IT human resources, Nakayamaand Sutcliffe (2001) propose a skills portfolio approach to managing its IT skillneeds. They emphasize that acquiring the right mix of skills is far morechallenging than simply getting IT workers. Furthermore, firms are experiencingincreasing difficulty in determining their optimal skills portfolio, and in acquiringand managing that portfolio in turbulent times. A two-year study by CIOMagazine (2002) attests to the difficulty of finding the right mix of skills, evenin the time of economic slowdown and reduced demand on IT and Sutcliffe (2001) define three managerial foci for IT skillsportfolio management: skills acquisition, development, and maintenance. Skillsacquisition addresses skills recruitment, building of skills inventory, and skillsacquisition through outsourcing. Skills development considers determiningdesired skills requirements, designing and implementing skills enhancementplans at the firm level, designing programs to allow skills transfer, anddeveloping a roles rotation process. Skills maintenance focuses on talentsretention and updating approach of IT skills portfolio management seems especially necessary forthe more complex and dynamic e-business environment, as many variationsexist between traditional IT and e-business implementations, teams, andmanagement (Lientz & Rea, 2001).IT Skills for E-BusinessThe shortage of appropriate IT skills may delay e-business transformation formany companies. Forrester Research (2000) indicates that, in one study, 31%of e-business groups were understaffed, and this staff shortage caused thedelay of 41% of e-business projects. The latest study by the InformationTechnology Association of America (ITAA) indicates that demand for IT staffhas reached an historic low of 493,000 jobs for the next 12 months, comparedCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 59with million jobs demand in 2000 and million jobs demand in 2002(ITAA, 2003).Based on a series of surveys conducted by CIO Magazine (2002), ITmanagers have found that the difficulty of IT hiring and retention has eased since2000. However, in mid-2002, 56% of the IT executives surveyed agreed thatthey re still experiencing a skills crisis, having difficulty matching available skillsets with their companies IT needs. But only 2% of the respondents notedstaffing crisis. ITAA studies (2000, 2001, 2002) also reveal that IT positionsremained unfilled at a constant rate of 50% over the last three years due to thelack of qualified workers. These results, combined with the declining demandof IT workforce, indicate that a gap exists between available skills sets anddesired skills sets. Rapid technological advancement contributes to this Internet boom renders older skills obsolete and increases the difficultyin finding and keeping the newer skills (Agarwal & Ferratt, 2002; Tiwana &McClean, 2002).Most companies are under pressure to leverage enterprise systems for forginga greater role in the e-business environment (Bartol et al., 2002). Enterprisesystems, such as CRM, SCM, and ERP, now capture a larger share of ITbudget than they did in prior years. Companies are seeking IT skills that supporte-business initiatives such as supplier-facing extranets, customer-facing Web-based applications, and collaboration on industry exchanges and marketplaces(Goff, 2000a). However, many of these skills are in short supply. Mostcompanies have to retrain their current IT staff to support CRM systems, datawarehousing, data mining, e-commerce applications development, Internetapplications development, and ERP. The continued growth of e-businessrequires a company to pay closer attention to its e-business IT skills capable IT staff is essential to the transformation and integration of legacy andenterprise applications into viable e-business early 2000, skills most in demand included application development,networking, Internet development, e-commerce, and data mining (Goff, 2000b).The CIO Magazine 2002 survey reports that the in-demand IT skills wereapplication development (53% of respondents), project management (50%),database management (47%), and networking (48%). These four IT skills haveremained the most in-demand over the two-year period between November2000 and July 2002 (CIO Magazine, 2002).As IT roles are changing at an increasingly rapid pace, technical skills alone areinsufficient for enabling e-business transformation. Based on a multi-companycase study by Bailey and Stefaniak (2000), it is increasingly important for anCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
60 Mirza & ChanIT staff to possess both soft skills and business skills. Soft skills includecommunication, problem solving, adaptability to new technology, and team-work. Business skills include understanding the customer mentality, investiga-tive skills for asking probing questions, idea initiation, and project redesign and change management are critical to successful implemen-tation of enterprise systems. The Electronic Commerce (EC) Institute (2001)has defined a body of knowledge for e-business. This knowledge baseencompasses skills for managing business transformation, process reengineering,integration, and relationship management. In-house skills in these areas areoften in short supply. The demand for integrated enterprise applications andcollaboration systems implies that companies will need more IT talents withsolid foundation in project management, systems integration, and above section highlights some of the challenges created by the e-businessweb environment. One main challenge is the difficulty in managing and operatinga wide-range of inter-connected enterprise systems across the e-business challenge is the shortage in e-business skills for supporting the evolvingorganizational relationships, tools, and technologies. Thirdly, companies arefacing the challenge of proper IT skills portfolio management for member-organizations of an e-business web environment. In the following section, weanalyze these challenges from a firm s interactions with its e-business webenvironment at five Levels of ChallengesFirms transitioning towards an e-business environment are facing five levels ofchallenges in managing IT skills. These five levels of challenges are: strategy,architecture, systems, project, and tools and technology (see Figure 3).Challenges present in each level are influenced by the e-business environmentand will demand special strategies for IT skills portfolio management withregard to skills acquisition, development, and 2 presents an overview of these five levels of challenges as related to e-business IT skills portfolio management. At each level of challenge, we proposea set of skills, critical for the success of the e-business web firm. The ensuingdiscussion analyzes issues pertaining to each level of ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 61Figure 3: Levels of Challenges for an E-Business FirmStrategy LevelArchitecture LevelSystems LevelProject LevelTools and Technology Level Table 2: Necessary Skills per Level of ChallengeLevels of Challenges Necessary Skills , governance, and decision making. Knowledge about technology. Understanding of e-business webs complexity. Architecture Architecture knowledge as part of IT planning skills. Distributed systems knowledge. Application architecture and systems integration. Knowledge about technology standards. Systems Deep knowledge in business process (intra- and inter-organizational processes). Technical knowledge in systems integration. Vendor and product knowledge. Application architecture. Projects Deep knowledge in process related to industry value chain. Deep knowledge in inter-department process. Change management. Web-based system development. Integration of legacy systems, enterprise systems, and Web-based systems. Project management. Interpersonal and communications skills. Tools and Technology Multiple operating systems. Wireless. Web services. XML; Java. DBMS and networks. Client-side programming tools; Server-side programming tools. Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is Skills Portfolio ManagementAcquisition Development MaintenanceE-business Web Environment
62 Mirza & ChanThe Strategy LevelA well-defined strategy is critical to the success of any e-business firm. Pinker,Seidmann, and Foster (2002) stress the idea that, without a sound e-businessstrategy, any firm venturing in this arena is at a serious disadvantage. Evans(2001) states that a business vision is vitally necessary for developing an e-business strategy because the structure and components of this strategydetermine where the business is today and where the business will be in thefuture. Becoming an e-business is a major decision for any planning for developing a vision of the firm s future is the responsibilityof upper level management, most specifically the CEO of the CEO is not only responsible for developing an e-business strategy, but mustalso champion such a strategy. Executive leadership is considered a criticalsuccess factor for developing a firm s e-business strategy (Viehland, 2000).Typical executives do not have the strong technological background tounderstand their implications on the business. In order to succeed, however,these executives need to understand modern technological developments, andtheir implications on the firm and the industry in general. A CEO who championsan e-business transformation will see to it that all the necessary resources forthe success of e-business operations are main concern here is what an e-business strategy offers when it comes to ITskills portfolio management. One possible step in the right direction is theinstitution of a specialized chief e-commerce officer (CeCO) position (Pinkeret al., 2002), or a chief e-business officer (CeBO). Many organizations havedeveloped similar positions with varying titles. A major role of this person is inthe formulation and implementation of a firm s e-business strategy. Severalorganizations used the CIO as the CeBO. Nevertheless, it may be moreappropriate to fill the CeBO position with a different individual. A CIO istypically more attuned to the internal needs of the organization, with a traditionaloperations mindset, and following traditional means of IT workforce acquisi-tion, development, and maintenance. A CeBO, on the other hand, expected tohave both internal and external focus, with transformational goals, may ap-proach IT skills management issues more effectively in accordance with thedynamic IT workforce a CeBO position has been created in a firm or not, successfuldevelopment and management of an IT skills portfolio depends greatly onupper management policies and strategy. An e-business IT staff should beCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 63viewed as a strategic advantage that needs to be nourished and maintained. Inthe new e-business web environment, IT talent can easily be lost to competitorsif not given proper attention and resources. Skills retention could be accom-plished through the application of several retention practices, including com-petitive salaries and benefits, skills development through training or continuededucation, and other job perks such as telecommuting (Gill & Pidduck, 2001).Additionally, upper management must invest sufficiently in acquiring critical ITskills. Settling for second best, or trying to simply bring the skill level of currentstaff to accomplish more advanced jobs, a firm may be missing great businessopportunities. On other occasions, it may be more logical to outsource certainjobs. This requires that upper management understand values added throughoutsourcing in the long run, in spite of apparent high cost associated with it(Rozwell & Krammer, 2001).Furthermore, upper management must recognize the difference between an ITculture within a traditional business and that of an e-business. In an e-businessfirm, the IT staff needs to collaborate with other firms IT teams. Those firmscould have been recent competitors. Interactions among various IT staffs maypose threats to some firms. Such relationships require trust and capablemanagement. Experience of collaboration with other partner firms could beemphasized as a skills development and retention mechanism rather than short, at the strategic level, IT skills essential to an e-business include: strategic planning, leadership, decision making, knowledge about technology, and understanding of e-business webs Architecture LevelA firm s technology architecture typically includes computer networks (intranetsand extranets), legacy systems running on a mainframe, client/server systemsrunning newer types of applications, database management systems (DBMSs),decision support systems (DSSs), data warehousing, and ERP systems. Afirm s e-business architecture also emphasizes integration of enterprise systemsfor SCM, customer CRM, e-procurement, and EAI with ERP as the back-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
64 Mirza & Chanbone. Beyond the enterprise boundaries, the e-business architecture supportsinteractions with trading partners and customers through public and private e-marketplaces and transaction-based online retail efficient architectural design is critical for a firm to perform effectively in ane-business web environment. In the 1990s, many organizations failed toachieve the desired benefits of integrating systems and applications throughERP systems (Krasner, 2000), thus unable to create architecture to supportdata sharing. E-business architecture is much more complex to manage sinceit is not limited to inward facing systems. Customers and suppliers are grantedaccess to a firm s enterprise systems. Additionally, e-business architectureincludes partner systems not controlled by the firm. EAI packages try tointegrate internal enterprise systems with external systems. However, this is avery complex proposition considering the large number of systems and appli-cations that need integration (Lee, Siau, & Hong, 2003).For the e-business IT staff, different skills are required for dealing with suchcomplex application and technology architecture than those required in atraditional IT environment. E-business webs link tens, hundreds, and eventhousands of customer and supplier firms (Laudon & Traver, 2001). Differentcustomer firms systems may impose different data and interface to supplier systems may also need special applications and program-ming. This complexity poses great challenges to a firm s IT staff and itscapability for information management (Mendonca, 2003).In short, IT staff must possess the following skills to handle the complexity ofe-business architecture: architecture knowledge as part of IT planning skills, distributed systems knowledge, application architecture and systems integration, and knowledge about technology Systems LevelAt the systems level of an e-business are the different enterprise applicationssuch as data warehousing, ERP, SCM, CRM, BI, e-procurement, and of these systems extend beyond the enterprise boundary to facilitatecollaboration across the supply chain. These systems are normally supportedby a number of different vendors. Vendor applications typically offer genericCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 65solutions that require fine-tuning, customization, and integration with otherapplications and/or legacy systems within the enterprise. Different vendorsolutions use different standards of development and, hence, each newapplication requires a new set of greatest challenges facing an e-business IT workforce with regard toenterprise systems are those concerning inter-organization systems. SCM andCRM systems allow suppliers and customers to access a firm s enterprisesystems. EAI systems tie a firm s ERP with supplier and partner ERP , an e-business firm needs to acquire the following IT skills forhandling challenges at the systems level: deep knowledge in business process (intra- and inter-organizationalprocesses), technical knowledge in systems integration, vendor and product knowledge, and application Project LevelE-business project implementation differs from traditional IT project imple-mentation. Lientz and Rea (2001) identify 12 different characteristics thatdistinguish between e-business project management and traditional projectmanagement. These differences stem from the dynamic nature of e-businessprojects themselves and the nature of the e-business web -business projects at the intra-organizational level typically are not welldefined. Requirements change at a very fast pace, and the development periodis expected to be very short. These characteristics represent conflictingobjectives. Having to complete a project in a short period when requirementsare not clear at the onset of the project can cause great confusion in theimplementation process. Project management must be able to quickly define aclear end-result and work towards achieving it. Internal e-business projectstypically involve many different divisions within the firm, some of which may beat dispersed locations. The complexity in project coordination increases whendifferent divisions need to agree on the desired project results. Furthermore, afirm s employees may receive internal e-business projects with may see the new project as a threat to their own positions in the firm, andhence, may be reluctant to cooperate ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
66 Mirza & ChanFor inter-organization projects, the challenges for project implementation aremore complex. IT staff must deal with technical and non-technical personnel ofpartner firms. A manager in this type of projects typically has little control overwhat goes on in the partner firms. Therefore, it is difficult to manage cross-boundary projects. Participating organizations must have the same level ofunderstanding about a project s objectives, requirements, and benefits. Failureto maintain close interactions and continuous communications may lead towasted efforts and resources. Communication and interpersonal skills arehighly important in these types of state of IT staffing also affects the implementation of an e-business e-business IT staff often has to concurrently support traditional systems ande-business projects (Agarwal & Ferratt, 2002). Companies have to confrontthe lack of skilled workforce by staffing e-business teams with outsourcedconsultants or freelancers possibly working from remote locations. Gomolski(2001) indicates that for a typical e-business IT project team, 50% will comefrom outside resources. This staffing pattern definitely creates a projectmanagement nightmare. Developing project management skills for such situa-tions becomes a sets essential to the successful implementation of e-business projectsinclude: deep knowledge in process related to industry value chain; deep knowledge in inter-department process; change management; Web-based system development; integration of legacy systems, enterprise systems, and Web-based sys-tems; project management; and interpersonal and communications Tools and Technology LevelThe accelerated pace of technology advancement exacerbates a firm s capa-bility to manage IT human resources. It has become a norm that, almost everyyear, a new hot technological development is introduced promising to solvemost problems of previous tools or technologies. New applications andCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 67business models may also arise out of these new developments. Operatingsystem wars continue to wage on, with both Windows and Linux trying to graba larger share of the market. Enterprise systems are continuously upgraded assupport for older versions soon expires. Lack of standards on many program-ming languages and technologies, such as wireless, increase the complexity ofsystems development. Functional codes often need to be re-written severaltimes to run correctly on different vendor applications. A simple case in pointis the difference between Internet Explorer and Netscape Navigator at the e-business firm, collaborative systems and the desire for greaterintegration with partner, supplier, and customer systems demand advancedskills for IT tools and technology. Familiarity with a diverse range of vendortools and technologies may be necessary to work effectively with other the adaptation of a certain vendor tool or technology may not be aproductive can an e-business firm prepare for new tools and technologies imposedby partner firms? How can a firm determine if a new technological developmentis worth investing in skills development? Waiting to adopt a new technologywhen it matures may leave the firm at a disadvantage. By the time the staff isbrought up to speed, it is time for a new technology, leaving the now old technology of a year or two ago issues cause serious problems for most e-business firms. Severaltechnologies, such as HTML, Java, and XML, have been widely adopted andhave remained as viable e-business development tools (Smith, 2001). How-ever, even with these popular tools, some vendors insist on developing varyingversions that do not adhere to standardization on our review of skills in demand discussed earlier in the chapter and ofindustry trends, skills that are valuable for the next few years include: multiple operating systems, wireless, Web services, XML, Java, DBMS, networks,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
68 Mirza & Chan client-side programming tools, and server-side programming TrendsThe rapid pace of change in IT led by increased vendor competition has causedpoor quality in application development, incompatibility, and managementconfusion within a firm (Benamati & Lederer, 2001). Technology changesheighten the demand for IT skills training. CIOs are also struggling to find andretain skilled employees (Santosus, 2002). Dynamic and complicated inter-organizational collaboration, combined with ever-evolving technologies andshortage of skills, makes it necessary for firms to take an approach of skillsportfolio management. In this section we examine five trends related to an e-business firms IT skills portfolio management. These trends are: the changinglandscapes of IT skills, skills acquisition, skills development, skills retention,and the gap between academic programs and industry Changing Landscape of IT SkillsE-business has introduced many changes in a firm s IT skills changes span the firm s upper management and the IT workforce,starting at the CIO level and reaching all the way down to the analyst,programmer, and quality assurance CEO needs to have a solid understanding of a firm s IT resources and howto leverage those resources for strategic advancement. New executive posi-tions, such as chief e-business officer (CeBO), chief knowledge officer (CKO)(Herschel & Nemati, 1999), and chief algorithm officer (CAO) (Kane, 2002),have been introduced to support new e-business functions. These technology-savvy executives shall play an influential role in driving e-business transforma-tion and the strategic use of IT integration of enterprise systems globally and across organizational bound-aries requires a firm to possess skills of systems architecture, distributedsystems, systems integration, and change management. E-business also de-mands IT talents with knowledge of multiple enterprise systems and ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 69The external interactions with partner firms systems increase the requirementsof business and soft skills of an IT staff. The ability to communicate well withother firms IT staff is critical to achieving the desired goals and objectives ofe-business web relationships. IT teams, as a result of the distributed develop-ment and collaborative environments, must be able to effectively work togetherin a way that is previously unfamiliar to , obsolete and legacy systems remain and demand old skills to supportcontinued operation and maintenance of these systems (McKeen & Smith,2002). A firm s existing IT personnel may have to be trained to support newtechnology while maintaining legacy systems. Placing too much pressure on afirm s IT staff may lead to burnout and loss of key IT staff (Huarng, 2001).E-Business IT Skills Portfolio ManagementSuch changes in the landscape of IT skills make a skills portfolio approachcritically important during e-business transformation. The ensuing discussionwill examine trends affecting IT skills acquisition, development, and checklist of required skills and proposed activities for IT skills acquisition,development, and maintenance is provided in Appendix Skills AcquisitionsAn e-business places a high demand for IT skills in systems architecture,systems integration, distributed systems, and change management. For a firmto succeed in the dynamic environment of e-business webs, it must strategicallyplan for the acquisition of those skills as part of a comprehensive plan for skillsportfolio of skills for e-business may be accomplished through differentmeans. The most obvious method is through training current IT staff. Offeringtraining in new technologies, tools, and techniques, as well as rotating IT staffacross jobs and technologies, are considered among the most attractivepersonnel retention practices (Agarwal & Ferratt, 2002). However, manynewly skilled IT e-business experts soon flee for higher-paying jobs (Gomolski,2001). To avoid such occurrences, e-business IT staff may be trained inspecific skills through one- or two-week intensive courses rather than trainingfor specific ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
70 Mirza & ChanFor certain e-business projects that require years of experience, which may notbe easily attained through short-term training, hiring of skilled IT staff isnecessary. This requires the firm to be willing and capable of offering attractivecompensation packages to recruit expert IT other cases, a firm may manage its strategic skills portfolio by acquiring aspecific level of expertise on a part-time or temporary basis to complete short-term tasks. According to Gomolski (2001), half of a firm s e-business expertisewill come from external resources. These may include former employees,freelancers, interns, retired employees, and those seeking part-time or seasonalwork, as well as outsourcing service providers. Even though the use ofoutsourced IT staff may help accomplish the desired tasks, this approach iscostly and generates no immediate benefit in the development of a firm sinternal IT e-business projects may be accomplished through teams assembledfrom different partner organizations. This type of effort requires strong trustbetween participating firms, and the IT staff s ability to communicate andcollaborate across organizational cost pressure and the need for business agility has motivated manycompanies to seek offshore outsourcing as an alternative means of meeting theirIT skills requirements. It is likely that more than 80% of . companies willexplore this option of IT services, and 40% will engage in pilot initiatives in thecoming years (Thibodeau, 2003). Industry projections suggest that offshoreoutsourcing will focus initially on low-end commodity work, such as legacyapplication maintenance, ERP enhancement, and help desks. Increasingly,companies may also use offshore services for project-based work in Webservices and in enterprise application integration and implementation (Morello,2003). The ITAA 2003 survey finds programming and software engineeringjobs are most likely to go overseas (67%), followed by network design (37%)and Web development (30 %) (ITAA, 2003). These findings suggest that theoffshore development trend is both real and expanding to more sophisticated,value-added jobs. This trend presents opportunities for firms to acquire skillseconomically, but also creates difficulty for maintaining staff morale and acquisition includes the activities of recruiting for skills, building skillsinventory, and outsourcing for skills (Nakayama & Sutcliffe, 2001). In addi-tion, IT managers need to determine desired talent profiles, retool existing ITskills, determine the effectiveness and impacts of skills outsourcing, anddetermine the effectiveness of various compensation methods based on choice of skills acquisition activities should support an e-business firm sCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 71strategies, requirements, and goals. Appendix 1 includes a checklist of requiredskills per level of challenge and the activities for acquiring those Skills DevelopmentThe development of requisite skills for e-business transformation should bedetermined by a firm s strategic plan for IT skills portfolio management. Thefirst step is to determine the required skill sets. This initial step is critical andshould address both short-term and long-term skill requirements, as well asdifferent levels of development involves activities for determining the desired skills portfo-lio, designing and implementing skills enhancement plans at the firm level,designing programs to allow skills transfer, and developing a roles rotationprocess (Nakayama & Sutcliffe, 2001). As shown in Appendix 1, it is alsoimportant to consider skills measurement and evaluation, commonalities andheterogeneities among different skills, the impact of job/position rotation, andthe effectiveness of different skills development activities. Skills developmentactivities include internal training, education, self-study, on-the-job training(OJT), and industry certification (IC).IT Skills MaintenanceSkills maintenance consists of talent retention through different retentionmethods such as benefits, compensation, work conditions, and the updating ofskills (Nakayama & Sutcliffe, 2001). IT managers should also evaluate the useof skill sets, factors for retaining talent, needs for skill updates, and theeffectiveness of training IT talents is essential to an IT skills portfolio management plan. Thedynamic nature of the e-business web creates an attractive work environmentfor skilled IT professionals to move about, especially since firms collaborateclosely and their individual environments are exposed to employees of otherfirms. E-business firms are hence subject to a high rate of employee turnoverand must take the necessary measures to reduce the IT staff s need to seekalternative jobs. Hacker (2003) considers IT staff turnover to be the silentprofit killer of an and Ferratt (2002) have conducted a study of 32 organizations ontheir retention practices of IT professionals. They identify 11 categories ofCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
72 Mirza & Chanretention practices and 32 detailed practices. The categories are: compensa-tion and benefit systems, employability training and development, sense ofcommunity, work arrangements, quality of leadership, performance measure-ment, opportunities for recognition, opportunities for advancement, lifestyleaccommodations, longer-term career development, organizational stability,and employment security. Some of these categories represent qualitativefactors, while others are more action oriented. Appendix 1 incorporates achecklist of required IT skills with corresponding maintenance Between Academic Programs and E-Business NeedsThe shift in the marketplace presents new pressures on the academy. Fast-paced technology and business evolution dictates that IS and EC curricula mustclosely follow the application of technology in business and industry (August-ine, Surynt, & Jeancola, 2002). Universities also need to undertake continuouscurricular innovation in order to meet the demand of changing e-business needs(Chan, 2001). Two trends are emerging. E-business transformation requiresadvanced skills in architecture, systems integration, collaborative systemsdevelopment, and complex business processes. Offshore outsourcing willreduce the demand on traditional IT jobs in programming, systems develop-ment, ERP maintenance, and technology support. These two trends combinedwill have significant implications for academic do academic programs currently teach? A study by White, Steinbach,and Knight (2003) reveals that technical graduate e-commerce programs givebusiness education equal importance to technical education in the category ofessential courses. However, the same cannot be said about graduate e-commerce programs in business schools, where the greatest emphasis is placedon business education, with a -to-1 ratio favoring business in networking, project course, and marketing were found to be mostessential in both graduate and undergraduate technical e-commerce , courses in database and server-side Web application develop-ment were found less essential, being offered at only 58% and 50%, respec-tively, of technical graduate e-commerce programs. This represents a gapbetween what the industry needs and what educational institutions see study by Lomerson and Schwager (2002) has identified the most populartechnical courses on e-commerce technologies taught in IS programs. On theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 73client-side technologies, using a six-point scale to indicate degree of coverage,website design (average = ), XML (), Web design tools (), andJavaScript () have received more attention than HTML (), DHTML(), and CSS (). On the server side, the most frequently coveredtechnologies are SQL (), Active Server Pages (3), Java (3), ODBC (),Apache (), Unix/Linux (), PHP (), and Java Server Pages ().These findings suggest that most academic programs only cover basic Webdevelopment skills and technologies. Students are not prepared to addressadvanced technologies and systems and educators have voiced the importance to expand curricularofferings in systems integration (Chan, 2001) and enterprise systems beyondERP (Lederer-Antonucci et al., 2003). Students need to develop a solidunderstanding of strategies and processes as well as technology , the majority of IS and e-commerce programs only address thebusiness side of these complex e-business developments. These educationalprograms need to continuously monitor and understand the changing require-ments of e-business firms. In the fast and dynamic e-business web environment,review and assessment of curriculums must be done almost on a yearly to bridge the gap were taken by the EC Institute, which recently initiateda project aiming to determine the body of knowledge for e-business (ECInstitute, 2001). The resulting document provides a comprehensive list oftopics and skill sets aimed for certification of the e-business this chapter we have introduced the emerging e-business web environment,and described its dynamic nature and impact on the IT skills portfolio of e-business firms. IT managers are faced with five levels of challenges (strategy,architecture, systems, projects, and tools and technology) to which properskills portfolio management is necessary. By implementing IT skills portfoliomanagement activities of skills acquisition, development, and maintenance, webelieve that a firm will have a better grasp of its e-business operations and IThuman resources. The checklist of activities, as summarized in Appendix 1, mayserve as a guide for managing IT skills required for e-business conclusion, we recommend further studies to verify our proposed levels ofchallenges and their associated skills. It is also important to determine the mostCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
74 Mirza & ChanTable 3: Research Questions Regarding IT Skills Portfolio ManagementPracticesLevel Skills Acquisition Skills Development Skills Maintenance Strategy - What efforts are taken to attain - Is upper management being educated - What is being done to update IT strategic e-business IT know-how? on e-business technology and benefits? management skills with e-business skills? - Is upper management playing a - What skills development strategies are - What is being done to keep e-leadership role in e-business planned or used? business IT management on board? decisions? - What new positions are created to support e-business strategies? Architecture - How are architecture skills - What architecture skills are required? - What measures are taken to update acquired? and maintain architecture skills? - What measures are taken to develop architecture skills? Systems - How are systems skills acquired? - What systems skills are required? - What measures are taken to update and maintain systems skills? - Which activities are conducted to develop systems skills? Project - How are project skills acquired? - What project skills are required? - What measures are taken to update and maintain project skills? - Which activities are conducted to develop projects skills? Tools and - How are tools and technology - What tools and technology skills are - What measures are taken to update Technology skills acquired? required? and maintain tools and technology skills? -Which activities are conducted to develop tools and technology skills? effective activities for the acquisition, development, and maintenance of e-business IT skills. How a firm s skills portfolio changes during e-businesstransformation will merit a close look. A list of possible research questions onskills acquisition, development, and maintenance is presented in Table , R., & Ferratt T. W. (2002). Enduring practices for managing ITprofessionals. Communications of the ACM, 45(9), , S., Ein-Dor, P., Markus, ., Scott, J., and Vessey, I. (2001). Doesthe trend toward e-business call for changes in the fundamental conceptsof information systems? A debate. Communications of the Associationfor Information Systems, 5(10).Augustine, F., Surynt, T., & Jeancola, M. (2002). Implementing an e-businesscurriculum: Opportunities and issues, issues and trends of informationCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
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78 Mirza & ChanNeef, D. (2000). Hiring and e-team. Journal of Business Strategy, 21(6), , F., & Sumner, M. (2001). Job turnover among MIS professionals:An exploratory study of employee turnover. Proceedings of the 2001SIGCPR Conference (pp. 11-17).Pinker, ., Seidmann, A., & Foster, . (2002). Strategies for transitioning old economy firms to e-business. Communications of the ACM,45(5), , A., & Majidi, N. (2003). Europe s borderless market: The Online, (May 12). Accessed online at: , C., & Krammer, M. (2001). Advice to the e-business czar:Consultants can help. Gartner. , M. (2002). Loyalty, shmoyalty. CIO Magazine, 15(13), , J., Twombly, J., & Rottenberg, D. (2001). Collaborative commu-nities: Partnering for profit in the networked economy. City: DearbornFinancial , R. (2001). Trends in e-business technologies. IBM Systems Journal,40(1), , D., Ticoll, D., & Lowy, A. (2000). The rise of business , 1(3), Article , P. (2003). Offshore outsourcing is relentless. Computerworld,(June 27).Tiwana, A., & McLean, E. (2002). Knowledge integration and individualexpertise development in e-business project teams: From the pod to thepeas. Proceedings of the 2002 ACM SIGCPR Conference (pp. 120-123).Varian, H., Litan, R., Elder, A., & Shutter, J. (2002). The Net impact study:The projected economic benefits of the Internet in the United States,United Kingdom, France and Germany. Accessed July 10, 2003,from: , D. (2000). Critical success factors for developing an e-businessstrategy. Proceedings of the 2000 Americas Conference on Informa-tion Systems (pp. 10-13).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Challenges for Managing IT Skills Portfolio for E-Business 79Vinas, T. (2002). China embraces the Internet. Industry Week, 251(5), , J., Steinbach, T., & Knight, L. (2003). E-commerce curriculum: Afterthe fall. Proceedings of the 2003 Information Resources ManagementAssociation (IRMA) International Conference (pp. 611-614).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
80 Mirza & ChanAppendix I: IT Skills and PortfolioManagement Activities ChecklistCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is of Skills Sets Skills Acquisition Activities Skills Development Activities Skills Maintenance Activities Recruiting Building Outsourcing Internal Education Self-Study OJT IC Compen-Training Work Per-Recognition Challenge Training sation & & Arrange-formance & Advance-benefits Develop-ments Measure-ment ment ment Strategy Strategic planning Leadership Decision making Knowledge about technology Understanding of e-business web complexity Architecture Architecture knowledge Distributed systems Application architecture and systems integration Technology standards Systems Business process (internal and inter-firm) Systems integration Vendor/product knowledge Application architecture Project Industry value chain process Inter-departmental process Change management Web-based systems development Systems integration Project management Interpersonal and communications skills Tools and Multiple Operating systems Technology Wireless Web services XML Java DBMS Networks Client-side programming tools Server-side programming tools
Skills and the Worker: Let s Get Real 81Chapter IVSkills and the Worker:Let s Get RealElizabeth LaheyElizabeth Lahey and Associates, USAAbstractTechnology professionals have real lives, interests, and desires that areaffected by rapid changes in the industry. With the decline of the Organization Man model, workers are now expected to maintain theirskills and manage their careers without employers help. With skills thatrapidly become obsolete, technologists must prepare continuously for thefuture. Yet, to maximize the utility of new skills, they cannot prepare toofar ahead. This reality creates a dilemma for skills portfolio development.The TechCareer Compass (TCC) website was designed to solve theproblem. The sponsors are industry-leading firms, so workers know theskills portfolio and career information is accurate and information and communications technology (ICT) industry gestated in abusiness environment that supported lifetime employment. When young em-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
82 Laheyployees entered a company, they took entry-level jobs with decent pay andexcellent benefits, with the expectation of continuous growth and developmentuntil retirement at age in skills or knowledge needed to perform advancing levels of workwithin the organization were a benefit of long-term employment in the organi-zation. The company provided both the education and time necessary toaddress the developmental needs of their employees. Training was both aclassroom and on-the-job experience that was built into the organization sstructure. Successful employees were encouraged to train their own replace-ments so that in turn they might prepare to move up when a higher-level positionbecame Organization Man was the business model of the post-World War IIgeneration (Whyte, 2002). It is not the model in today s business world. It hadall but disappeared by the early 1990s, and Generation X never saw it at X entered the workplace with the explicit message that eachemployee was an independent entity responsible for defining, sculpting, andcontinually reevaluating his or her own career. This included opportunities bothinternal and external to the of the baby boom generation, caught between business models, werein a dilemma. They attended schools that taught the Organization Man modelof the business world, but what they found instead was that the competitivenature of business was forcing firms everywhere to rethink the OrganizationMan premise that had been at the core of post-war growth. That older modelincluded the concepts of employability for life and compounding benefits forlongevity and loyalty. Employers willingly went outside the four walls of theorganizational family to bring in new skills, novel thoughts, and ideas. Buzzwordslike out-of-the-box thinking expressed values management believed internalemployees -edge technology skills were lacking as well. For most companies itwas cheaper and easier to hire outside expertise to seed ICT efforts than it wasto gear up their employees for leading-edge software development. Manyfeared that costly software skills training would quickly become obsolete onhardware rapidly being replaced. The learning curve for employees was great,the return on the employer s investment in training was questionable, hiringoutside consultants was expedient, and frequently employees reluctantly learnednew skills they knew were of fleeting workplace underwent a major revolution. The responsibility for careersand career development shifted. The changes came fast and were implementedCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 83with little concern about their impact on employees. Businesses told employ-ees, often explicitly, that it was not the company s role to manage employeecareers, and employees were responsible for maintaining their value within theorganization. The business model was completely shifting to the skill needs and maintaining employability became the sole respon-sibility of the individual. Some employees only reluctantly accepted the role ofkeepers of their own career growth. They desperately held onto the Organiza-tion Man model. They believed in it until faced with the massive layoffs and earlyretirement packages that came after workers willingly accepted ownership of their career and personaldevelopment. But they faced challenges as well. The speed at which the ICTindustry evolved made it impossible to predict with accuracy what skills wouldbe needed in the marketplace. The lead-time needed to prepare oneself forfuture career opportunities was offset by the time needed to determine thevalidity of the available information on the skills the industry significant skill mismatch developed between workers skills (or those theywere in the process of developing) and the skills the industry planned to hire toover the next year. All players recognized the need to bridge the gap. Theindustry could not continue its growth without properly skilled workers, andeducators could not prepare curriculum without advance knowledge of theindustry s needs. Technology workers planning career growth and develop-ment activities required information from reliable resources. All stakeholdersneeded access to the trendsetters in the technology industry. Trend-setting ICTcompanies and ICT think-tank gurus needed to be part of the input made the information being disseminated credible, an important consider-ation for individuals and support organizations making life-altering companies make poor ICT decisions, their operations can be seriouslyharmed. The decisions are financially significant and create nightmares for thetechnology staff. The decisions frequently lead to repeat expenditures aimed at band-aiding the problem. The decisions may even result in the cost oftransitioning to different, better , if a family of four bets the farm on the same decision, it can mean financialruin. If the worker s skills are suddenly no longer in demand, the family losesits stability. And as an aside, during the period when the chosen ICT platformis operational, the worker is in extreme demand. The opportunity to developnew skills is at a cyclical low. The free time to develop new skills comes onlyCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
84 Laheyafter the employee is no longer needed; impending doom is not even recognizedand leaves the family professionals have a unique perspective on the problem of skills in theindustry. They see themselves as responsible for filling the gap between supplyand demand, and in most cases they willingly assume that responsibility. Ascomputer geeks they welcome the challenge of new technology. But, the needfor valid direction is critical to ICT professionals meeting that objectives in exploring a worker s perspective on skill issues are to:1)Discuss the Organization Man model and its impact on )Consider a case study of an information technology )Provide an overview of adult learning theory in the context of )Share personal skills perspectives with three )Learn how the industry supports Organization Man ModelThe end of World War II brought about a period of personal and worldwideprosperity. Organizations expanded, and employees were part of the growingcompany family. The typical professional worker was willingly shaped by theneeds and demands of the employer. It was an equitable trade-off between thetwo parties. The employee expected and received regular pay increases,routine promotions with increased responsibilities, and excellent employmentand retirement benefits. In exchange, the company received loyalty and depthof H. Whyte s best-selling book, The Organization Man, first publishedin 1956, became a classic in popular culture (Whyte, 2002). It is the standardby which all models of employer-employee relationships are compared. TheOrganization Man model (and at the time it was just men, so, I apologize to thefeminists out there) played to workers fears of the day. The model stereotypedindividuals as yes-men, unable and unwilling to innovate. It portrayedemployees as singularly focused on advancing through the organization andconsequently improving their status on the domestic front. The author simplycontrasted these trends to the traditional American values of competition,originality, and individualism (Smith, 2002). Whyte succeeded at fueling debateCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 85over American values during the 1950s. But Whyte managed to spark evenmore significant discussions on employee-employer roles in career develop-ment discussions that continue , employees entered the workforce immediately after high might follow the previous generation into the same firm and career. Therewas little need for career planning or skill development. The company playedthe role of big brother. It gave the employees the classroom instruction andtools needed. It apprenticed younger workers with senior staff who passedalong details of the job. Management expected the senior workers to teach thejunior persons. An older employee taught understudies how to perform exactlyas it was done in the past. No innovation was needed and the wheels of thebusiness continued to rotate was in a senior worker s best interest to train the new hire well. By being agood mentor, he demonstrated the increased value he brought to the firm. Hetrained his own replacement and was now free to be trained for the next higherposition. As a bonus, the senior worker was gradually developing transition away from the Organization Man model of business was notrapid. Most of us remember relatives or family friends who retired after servicerecords spanning 25 to 30 years with the same firm. The retiree likely receiveda farewell gala, a gold watch, and medical and pension benefits for life, all paidfor by the company. A few larger companies even provided benefits to spouseswho never worked at the firm, despite the possibility the spouse would survivethe employee. It seems an appropriate trade-off for those of us not born intothe Organization Man generation. A lifetime of secure employment and regularsalary advances in exchange for professional loyalty. However, this post-warreality did not in the midst of the baby boom generation, the rules changed. Sadly,many baby boomers believed in the old standards. Their parents taught themthe value and virtues of working for the same company for their entire thought they should do just as their fathers had done. Employers andemployees approached the 1980s believing life and the economy would justkeep improving for each succeeding generation. But, the market crash inOctober of 1987 made it crystal clear that the times they was a changing, asBob Dylan so passionately ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
86 LaheyICT Department Case StudyIn late 1992, I faced a challenge. I was McDonald s Corporation s ICT trainingexpert for approximately 600 professionals. A large portion of the staff wasdedicated to application development, maintenance, and support on largemainframe computer software and hardware. Lead times were long. Thedelivery of products was slower than desired by management, both in the ICTdepartment and at the corporate level. I received a reasonable budget to pilota boot camp, transitioning employees from mainframes and COBOL topersonal computers and early Web-based tools. I felt competent putting theboot camp training program together, but I was unsure of its prospects forsuccess. The reason for my uncertainty was the continuing prevalence of theOrganization Man model in McDonald s Information Services Department,even though this was not the case in all parts of McDonald s working against the program were: McDonald s never had a lay off at the corporate level in its 40-yearhistory. When different skills were needed in the past, new employees or consult-ants were hired to fill the void. Approximately one-third of the employees to be trained had over 15year s seniority. Workers received above-average wages and benefits, and enjoyed highlevels of independence and flexibility in their jobs. When interviewed, many employees believed they would not be requiredto change. No incentive was attached to skills attainment. No disincentive was given for lack of transition to new decided on a small pilot to test the boot camp concept before applying it tothe 600 employees. I observed the selected group of students throughout a 30-day period of training, exercises, and hands-on assignments. My assumptionsabout the employees willingness to adopt new skills were neither entirelywrong, nor entirely correct. The Generation X participants all embraced thenew skills with enthusiasm. They looked at this as an opportunity to learnleading-edge technology at no personal expense. They were obviously notCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 87children of the Organization Man model. The oldest workers those ap-proaching retirement in one to three years had little interest in learning newskills. They used the training time as an escape from the daily routine of theoffice. But, the group of employees in the middle was more difficult tounderstand. Some followed the pattern of the workers nearing retirement,despite many fruitful years ahead of them. Others were thrilled with theopportunity to finally do something leading edge. These employees clearly hadgone into the ICT field to do exciting things, but they were extremely bored. Itwas time they got the chance to learn new skills; they even questioned whyMcDonald s waited so long to let them learn new analysis was not scientific, but I nevertheless concluded that the Organiza-tion Man model was affecting both groups of baby boomers in their middlecareer years. Members of one group wanted to work their way up theorganization ladder one rung at a time. They believed in learning only theinformation needed to get the next job, felt entitled to that higher position whenit became available, and could not face the possibility of learning an entirely newset of skills. Change upset the apple cart and threw the traditional hierarchy intochaos. There was a chance that today s mid-career employees would betomorrow s has-beens. That was change many mid-career employees chosenot to the other hand, there were an equal number of mid-career employees whogenuinely enjoyed learning new technology. But they too believed that theorganization was key to their future. The believed the company was responsiblefor employee skill growth and career development, and were blind to the factit had always been within their power to update their skills. From theirperspective, the organization was the responsible party. They hired intoMcDonald s, planning to spend their entire careers there. McDonald s shoulddetermine what skills and career growth opportunities best suited them. Theynever considered changing firms as an option to enhance and enrich their worklife, despite dissatisfaction with the lack of variety in their the end of the pilot boot camp, the recommendation made to the seniormanagement of the Information Services Department was far different fromwhat they expected. The program funds were redirected into touting a messageon the importance of adopting life-long learning and ongoing skill department would no longer be an employer for life. Employees becameresponsible for maintaining their employability. The department became anemployer of required skills portfolios. Employees with obsolete skills portfoliosgot reasonable opportunities to update their skills before receiving layoffCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
88 Laheypackages for non-compliance. The department published the skill sets requiredof their employees and funded 90 hours of employee training per year. Thetraining was at the employee s discretion, on or off work hours. This trainingwould supplement, not replace, the corporate-wide tuition program finally developed was not a boot camp at all, but a series ofmandatory management-led rap sessions. The employees got the opportunityto understand the purpose of the new training, ask their questions, and vent theiranger. Within months, employees saw uncooperative colleagues leaving theorganization. The message was clear. Skill growth and career developmentwere no longer the company s responsibility. Employees were the keepers oftheir own careers, and should take responsibility for s realized the need for support mechanisms. The company did notblindly turn its ICT employees loose to manage their careers. The ICTDepartment developed an entire human resource (HR) function around these600 individuals. The HR team helped them with every aspect of their careerplanning. The HR professionals provided the necessary infrastructure, whichallowed employees willing to take the initiative to successfully navigate theirtechnology careers in McDonald Learning TheoryDoes it matter whether employees develop skills under the Organization Manmodel or the individualist model? In the Organization Man model, employeesknow exactly why they learn a skill and when they will use it. In the individualistmodel, employees learn a skill for the sake of learning. The employee attemptsto stay ahead by predicting future skill needs. Employees try to possessleading-edge skills at the exact point in time that these skills are likely to be indemand. Therefore, individuals learn skills that lack immediate this difference in approach matter?The Organization Man model matches human learning theory closely. Thetransfer of training from the classroom to the job is practically , the ability to directly and successfully pass job skills from onegeneration of workers to the next is a major benefit of learning under theOrganization Man model. The immediate transfer of training to a job is not theapproach in individualist learning. Many of the skills are stored for applicationat a later point in time. The acquired skills are shelved, retrieved, and dustedCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 89off before being transferred to a real job. Some loss of ability is inevitable dueto the time delay. Passing job skills between generations of workers is counter-intuitive to an individualist learning approach. Individualist learning functionsbest in settings where skills are evolving and shifting; passing along the lastgeneration s skill sets provides no Man learning most closely provides skill development opportu-nities centered on the concept of andragogy. Andragogy is the conceptualframework best suited for the adult learner. We will look at components of theandragogical theory of adult learning to assess the relative value of the twolearning basically affirms ideas most readers take for granted. It states thatadults do not learn in the same way that children learn. Adults are not empty jarsinto which knowledge can be poured. Adults approach educational opportu-nities with a different level of involvement and interest from that of the averagechild. Adults know how to learn better than children due to life learning model for children is called the pedagogical model and differs fromthe andragogical model is some key ways. Adults feel responsible for their owndecisions and lives. As a result, adults have a strong need for self-directedlearning. Adults ask more questions and quickly fill in gaps between what theinstructor provided and what is needed to perform properly. Adults have a self-concept children lack. Adults bring a variety of experiences to the learningsituation that younger individuals cannot bring. Adults incorporate similarexperiences, assumptions, and even alternative viewpoints into the learningsituation. This adds greater depth of understanding. One particular experienceadults possess cannot be understated. It is through the completion of theschooling process itself that adults know better how to learn. They consciouslythrough years of struggle figured out how they learn best (Knowles, 1990).Adults need to know why a skill is valuable before beginning the learningprocess. Employees training to do activities performed on the job clearlyunderstand the need to learn and willingly begin the learning process. Theconcept taught is not abstract, it is concrete. Success in learning the task willbe reflected in their paychecks. So, adults with training tied directly to jobperformance are motivated to continue skill growth over a lifetime (Knowles,1990).This fits neatly with the Organization Man model. Employees are hired to dospecific jobs in specific ways. They are apprenticed on the task to a senioremployee. They are under direct supervision by the employee they willCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
90 Laheyeventually replace. Success is clearly defined. What the employee must learnand why they need to learn it are directly related to effective job employee s motivation is pay, job enrichment, and movement up thecompany hierarchy, whereas individualist learning is exploratory and successis not guaranteed the why behind skill acquisition is unclear. No employ-ment motivation ties to successful completion of the skill development Organization Man learning practices apprenticeship, mentoring, and on-the-job training are all excellent ways for an adult to learn quickly andsuccessfully. Each learning practice applies principles of the andragogicalmodel for adult learning. They are all based upon links between successfulemployees and younger workers. Thus, another positive aspect of Organiza-tion Man learning is the effective transfer of training from one employee toanother. The older workers are free to prepare themselves for higher-levelpositions once their skills are transferred to younger workers. There is acontinuous ratcheting up of skills in the organization. Entry-level workersfeed the pipeline, and everyone moves up the corporate ladder. These sameresults are not found in the individualist Organization Man approach to career advancement works well in a stableand growing economy like that of the post-war era. Expenses associated withjunior and senior employees working in tandem are easily buried in the cost ofgoods sold. Apprenticeship type learning techniques work especially well whenthree market conditions apply. Demand for products and services mustcontinue at a steady pace, allowing cost pressure masking. Worker supply mustremain constant to feed the pipeline. Finally, job responsibilities must remainstable to maximize the value of skill transference. If any of these conditions shift,the Organization Man learning approach becomes less is the quintessential case study for shifts in all three of the abovemarket conditions. The introduction of the radio into the consumer market in the1920s was just the beginning of the flood to come. Technology appearedrapidly with everything from wireless laptop computers, to cellular phones withcolor video games, to vehicles with satellite global positioning devices. Theplethora of products and services offered by ICT companies expanded at ever-increasing availability of ICT workers is not constant. In the early 1990s there werenot enough workers to fill open positions in most companies. Educatorsscrambled to develop curriculums that prepared students for lucrative high-tech careers. The boom sapped the best and brightest ICT profession-als. Workers went to startup firms offering large stock option ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 91Conferences sprang up across the globe addressing the issue. Firms neededhelp attracting and retaining high-tech professionals. Then, as quickly as theboom started, the bubble burst. The supply of ICT professionals now exceededthe demand. But, a new problem emerged the available workers had thewrong skills to fill the available mismatch was an example of the final market condition that impactsOrganization Man learning techniques rapidly changing job skills and knowledge a worker needed to remain a valuable commoditychanged at an accelerating pace. A company s ICT skill needs shifted awayfrom its employees expertise. Few companies maintained the pace of skilldevelopment necessary to ensure their employees continued adaptability to themarket. Companies found it cheaper to dispose of their depreciated humancapital and made investments in fresh resources. In extreme cases, companieswere so far out of touch, they folded or were bought by more successfulcompetitors. So the labor market was flooded with improperly skilled ICT industry was one of the largest, fastest growing industrial sectors in theworld. Its impact on the world economy and world employment continued toexpand because of the instant information demands of businesses and consum-ers. But by 2000, many high-technology companies found their growth ratesunsustainable for the long haul. The firms became victims of the a result, many ICT workers were laid off. These ICT professionals werevictims of companies that dropped the Organization Man model withoutinforming and supporting their employees. The economic slowdown through2003 continues to affect the need for ICT workers. But, despite the experienceof some high-technology companies, the worldwide need for a steady supplyof new and properly skilled workers continues to the information and communication technology industry sector beganwith telephones and computers, the future appears to be in information mobility,content-rich broadband applications, and intelligent devices. Governmentlegislation, enormous network capacity, and the digitization of informationfostered the convergence of computer, telephone, cable TV, Internet serviceprovider, satellite, TV and radio broadcast, and wireless companies world-wide. This created the need for workers with more diverse skills than any oneorganization required in years past. Companies required skills portfolios thatfew employees possessed. The diversity of ICT companies and the impact ofthe skills portfolio needs of ICT professionals were profound. This addedadditional layers of complexity to the skill set workers in the industry mustpossess to continue to be ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
92 LaheyIn addition, the technology worker could no longer enter the ICT field planningto remain separate from the core activities of the business. Most organizationspositioned ICT workers as key business advisers. The technologist s skill setincluded business acumen and the ability to partner with the decision makers inthe company s strategic business units. Technology raised many levels in anorganization s strategic planning. It no longer served as a support function thatresponded to corporate directives. ICT workers needed to feel competent tosit at the table with other decision makers. Their input guided the future of thebusiness. So, the skills portfolio of today s technology worker includedexpertise from areas including communications, media, entertainment, market-ing, business, strategic planning, and client relationships. Understanding whichof these skills were needed at any point within a career was key to PerspectivesCase Study Number 1: Matthew was a male, over 50, employed in thetechnology department of a large retail organization for over 20 years. Hebegan his career as a computer operator, but worked his way up the ladder toa director position over software application development activities. He raisedhis children and was now an empty nester. Fortunately, during his career heearned an MBA and took advantage of the company s other generouseducation and career development opportunities. Although he had been able tomaintain many of his technical skills, his career advancement primarily focusedon strategic activities. He built up a strong business network both inside andoutside the company. He nurtured and maintained the network through frequentcontact. He was compensated well and was considering his retirement optionswhen he was laid devastating as the news was, the timing worked in Matthew s favor. Heleveraged the approaching Y2K crisis to get a foot in the door with some ofhis contacts. With a combination of technical and strategic business skills, heturned the negative situation into a successful consulting company. His decisionearly on in his career to focus on business skill development, instead of strictlytechnical skills, positioned him to add value to a variety of clients. Had Matthewchosen to direct his career on a completely technical dimension, the resultswould have been vastly different. And in his case, I suspect, much less ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 93Case Study Number 2: Jamie was a male approaching 55. He worked in thenetworking group of a large telecommunications firm until 2001. He was thestereotypical technology geek. A quick learner, as a younger man he taughthimself the latest the ICT industry offered. His nose was always buried in atechnical manual of some sort or other, and he was valued highly in his could be counted upon to learn anything on-the-job if the need arose. But,Jamie s home life was tumultuous the last few years. His daughter married andmoved away. Jamie now realized he and his wife had nothing in common. Itaffected his interest in learning new skills and his career in general. He stoppedexploring the latest and greatest tools and techniques. His performance asked about his change in attitude, he responded flippantly, suggesting, old age was just creeping in or that he was just sick of all the changes forcedon him by the technology giants. What was so bad about version anyway? When telecommunications companies contracted and merged, he lost his layoff left him without a job and with outdated skills. Jamie realized he wasno longer the hot commodity he had once been. He needed a strategy to makehimself appealing to technology employers once more. That was difficult giventhe number of unemployed telecommunication workers out in the marketplaceand his advancing age. Could he gain the edge needed to get interviews? Or wasretirement his only option? Jamie could not bear staying home every day withthe wife he now saw as a stranger. His motivation levels were high, but he hadno idea where to begin. He searched the Internet for career advice. Fortunately,there was a tool available. He found the TechCareer Compassfi at Study Number 3: Lynne began her professional career as a managementtrainee in a warehouse distribution facility. She was a single woman in hertwenties when her boss asked if she would act as a subject matter expert (SME)on a systems project. The project would automate the product ordering andinventory process for the distribution firm s largest customer. She jumped at thechance, though she had no idea what the project meant for her career. Lynnetransitioned from warehouse management trainee into an ICT career. She heldtechnology-related positions for over 20 years. In 2003, she was the motherof a pre-teen and was recently widowed. She had not led an easy life. Theindustry ups and downs only added to the pain. But, the skills she acquiredassure her on-going value to her employer. She had a variety of mini-careerswithin her overall technology career. Lynne was a systems analyst on her firstproject. She taught herself a variety of programming and business analysis skillssince they were not part of her existing toolkit. She also did some technicalCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
94 Laheywriting for that project, a role she truly despised and felt poorly trained toperform. She grew her role on the first project into a supervisory position. Sheacquired budgetary and client relationship responsibilities as a supervisor. Theskills portfolio she acquired on her first project was daunting. But, from the verybeginning she accepted all new skill sets as her personal responsibility, and shetook honing her skills portfolio seriously. Lynne took advantage of educationalopportunities provided by the company, but also tapped the expertise of thebusiness and technology resources on the team. She developed (and still has)quite an extensive network of personal and professional contacts. She identi-fied those possessing certain knowledge and felt comfortable asking them toshare s next assignment required her to learn the intricacies of database, as sheserved in the role of a database technician. She used her client relationship skillsfrom the prior assignment and expanded them to include the classroom trainingof users. She utilized her technical writing skills to develop complete sets of usermanuals and technical documentation for the project. She further demonstratedboth skills by designing training programs for the excelled at training management activities so much that when the inevitablelayoff occurred in the mid 1990s, she sold herself to a small technologycompany as training manager. Her technology skills and her general trainingexpertise served as a springboard for a totally new career in a heavyweight ICTfirm. She addressed employees technology needs, as well as their broaderdevelopmental needs. In general education courses she used examples relevantto technologists. After establishing herself as a credible talent in the trainingfield, she moved to a similar job in a large training department at a major retailfirm. Although her focus was now management, she always kept her technicalskills on the leading edge. She was ready to walk into a classroom at amoment s notice if an instructor called in did well until the downsizing struck again in 2000. But, again her technologyskills proved invaluable. Although she preferred a full-time position (herhusband was ill and she needed the income), all that was available was aconsulting job with a telecommunications firm. The position demanded many ofher leading-edge technology skills. The job description dealt with the conver-gence of the computer and telecommunications fields, and required someoneto effectively deal with client relationships. The position also prepared userdocumentation and provided user classroom training. Lynne was a perfect part-time position evolved into a permanent one for Lynne. She describedit as the job of her dreams. The company was extremely accommodating withCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 95her recent widowhood and single parenting situation. It allowed her the type offlexibility and independence most people never find. She defined the permanentjob to fit her greatest skills, interests, and ambitions. Was this the end of thestory for Lynne? Not likely she believes in lifelong learning. And, technologyis constantly changing. That combination is do these three case studies illustrate? No two individuals follow exactlythe same career path. There are a great variety of jobs within the technologyarena. The skills that each person needs to develop over a career are include both technical and business skills. Even when one s career pathremains within a narrow technical specialty, the skills change over time. Oftencareer advancement requires an individual to move between technology andrelated business units. And, ultimately, skills must be portable and verifiablefrom one organization to a professional in the ICT industry, your reaction to the amount of effortrequired to manage your career might be, Get real! I have work to do, a familyto nurture, and I want some quality time for myself. Unless someone can makethis easy, my career will just ebb and flow on its own. Most people do not approach their careers in such a laissez-faire manner. Butneither do they know how to solve the problem. They stand in an ocean ofconflicting and overlapping information. Individuals feel powerless to sort anddecide which information is valid. They then must further analyze which factsare relevant at the current stage in their career. The demands of analyzing andsynthesizing information in the technology arena are organizations abdicated their role of employer for life and careermanager, they placed a huge burden on their employees. Organizations took afunction once performed by a group of trained people with a targeted budgetand external resources, and dropped it squarely in the lap of the individual. Theindividual had no budget, no staff, no training, and no trusted resources tosupport the process. Was there any wonder a large skill gap plagued the ICTindustry?All the rhetoric around skill development, taking responsibility for maintainingemployability, and preparing oneself for leading-edge technology trends can beconfusing to any individual. Without a structured road map with buy-in fromall key stakeholders caprice might easily determine an individual s chancesfor success. Just as likely, the individual might simply waste valuable time ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
96 LaheySolutionsTechnology firms had ICT professionals at the highest levels on their corporateladders. These individuals faced the very same issues as unemployed ICTprofessionals in navigating their careers. They were also experiencing the flipside of the problem as hiring managers. They advertised for ICT professionals,only to discover a lack of qualified applicants for open positions. But as leadersof the ICT industry, they were better positioned to address the issue than giants in the industry decided to find a solution. They decided toaddress the lack of credible information for career planning and skill facing similar challenges often choose to join industry associa-tions so they can pool their resources. They can also address issues that requirea single industry-wide solution to avoid ineffectual splintering. The ICT skills1,mismatch problem was one such issue. The industry leaders asked CompTIAtheir industry trade association, to convene a task force to find a industry leaders knew there were critical ICT positions that went unfilleddue to lack of qualified individuals. Yet they realized workers were unemployedand wanted to work. The dilemma was how to communicate to ICT profession-als the skills portfolios needed to qualify them for the open positions. Theirshared belief was ICT professionals, and the agencies that trained andsupported them, had misinformation on skills. No single organization couldaccurately define ICT skill requirements for the industry overall. The industryconsortium decided the best solution was to take group responsibility for asolution. It planned to provide the necessary information on an ongoing workers managing their skills portfolio have a comprehensive ICTindustry solution actively helping and supporting them. The solution the industrydeveloped, released, actively expanded, and maintains is named the TechCareerfiCompass. It can be accessed on the Internet at TechCareer Compass (TCC) is an expansive website dealing with ICTindustry skills. TCC contains a uniform set of job definitions and skill standardsfor careers in the industry. TCC maps industry-supported certifications tospecific jobs. TCC identifies knowledge and skills required to do each maps learning providers to certifications to assist those interested informal courses of study. In addition, TCC has a variety of value-addedresources, such as career assessment tools, skill gap analysis tools, and atechnology ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 97The mission of the TechCareer Compass is to eliminate the ICT workerdemand and skill mismatches on a worldwide basis. TCC is an industry-ledinitiative to provide information and tools aimed at attracting, training, anddeveloping properly skilled has an impressive set of goals and objectives, not all of which are aimedat the individual worker. They include: The TechCareer Compass is to be a voluntary industry-driven effort toestablish and maintain a uniform set of jobs, skill standards, training, andcertifications to prepare workers for the rapidly changing information andcommunication technology environment. The TechCareer Compass will provide free public access to basicinformation and communication technology job-related information, butmay generate revenue from a variety of premium services. The content will be aligned to Department of Labor Skill Standardprojects, in particular a current . Government initiative being coordi-nated by the information and communication technology industry toestablish a baseline set of skill standards for the industry. The TechCareer Compass will provide tools to manage career growth atthe individual and company levels, and will be updated with new job andskills content every 18 months to two years. The structured use of TechCareer Compass will in turn attract and keepworkers in the information and communication technology industry, andnarrow the gap between the workforce skills of today and the evolvinginformation and communication technology industry skill needs of thefuture. (Lahey & Manzow, 2003)But the real beneficiaries of the implementation of TCC are incumbent andpotential information and communication technology workers. They benefit innumerous ways. They can explore career development paths within the industry. They can compare different jobs across the industry. They can plan training and certification needs. They can locate training providers. They can view detailed job descriptions and skills needed for ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
98 Lahey They can identify which jobs do not require degrees, if appropriate. They can determine which jobs best fit their personality. They can perform skill gap assessments. (Lahey & Manzow, 2003)The network of support groups surrounding incumbent and potential workersin the ICT industry also can benefit from using TCC. TCC is written for non-technical people so they are able to use it quite successfully. These people mayinclude: spouses, parents, guidance counselors, human resource professionals,and other types of career counselors. They can market information and communication technology careers tojobseekers. They can compare posted job openings to TechCareer Compass stan-dards via alternate job titles. They can examine career paths so that career exploration is a simpler task. They can discuss technical and non-technical skill and knowledge require-ments by job. They can suggest training and education requirements by job. They can highlight positions not requiring degrees to relevant candidates. They can recommend certifications that will provide candidates with acompetitive edge. (Lahey & Manzow, 2003)Learning institutions also benefit in several important areas from the use ofTCC. The TechCareer Compass defines a baseline set of skill-based learningobjectives that helps identify curriculum development opportunities andupgrade requirements in existing technology programs. The TechCareer Compass job definitions will help in the development oftraining schedules. The TechCareer Compass will provide a valuable tool to help trainingproviders to aide students in creating their own career roadmaps. The TechCareer Compass provides real-world examples that can beincorporated into demonstrations in training classes. Courseware providers can now add real-world information on industrycareers to their materials that map directly to industry-endorsed ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 99 The learning institution may market their courses via the TechCareerCompass website to a targeted geographic population of people inter-ested in growing their information and communication technology. (Lahey& Manzow, 2003)The benefits to the industry from the implementation of TCC were statedearlier. The TechCareer Compass attracts properly skilled workers to fill openpositions in the industry resulting in a boost in productivity. That expandsthe industry s growth potential. The industry assumes a leadership role in developing skills standards, thussolving their own worker supply and skill mismatch issues. Several information and communication technology industry members arealso leading providers of training and certification. So as demand for theseservices expands through exposure on TechCareer Compass, so willrevenues. The TechCareer Compass allows businesses to assist their employees inmanaging their high-technology careers. The TechCareer Compass serves as a guideline for employers helpingdevelop career paths for technology employees. The TechCareer Compass will provide a link between jobs and localtraining providers that can best service a specific employer s needs. The TechCareer Compass is also a benefit as a human resource tool forsmaller businesses, since the TechCareer Compass website offers infor-mation needed to support the creation of job descriptions, hiring guide-lines, individual development plans, promotion criteria, and skill gapassessments. (Lahey & Manzow, 2003)Several prominent members of the ICT industry developed the TechCareerCompass. These included Cisco, CompuCom, IBM, Intel, and implemented their solution through affiliation with their representativetrade association, CompTIA. CompTIA, the Computing Technology IndustryAssociation, spearheaded the volunteer effort to scope out the project; designthe system; develop the website; collect, massage, and validate the content;establish the ongoing maintenance process; and then host and manage thefinished product. But, subject matter experts from the aforementioned compa-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
100 Laheynies did the hard work, using information from jobs within their own organiza-tions and by reviewing previously written standards from numerous regulatorybodies around the TechCareer Compass website was launched in May 2002. It was quicklyapparent that the solution worked extremely well. This meant that the productneeded to have a large, objective review board to oversee its continued , in the summer of 2002, CompTIA implemented a Workforce InvestmentAdvisory Board (WIAB). It acted as an oversight committee reviewingdirection for all initiatives in the Workforce Development area of the associa-tion. One of the committee s largest roles was direction setting for the TCCproduct. The WIAB expanded input to TCC beyond the ICT industry. Theysponsored inclusion of members of the training and academic communities, aswell as governmental agencies in the labor and education and its member firms were actively involved in establishing a singleset of nationally accepted skill standards for the ICT industry. As part of thiseffort, the ICT industry provided the national skill standards free in the publicdomain. The TCC website was the portal for access to the national is the premiere skills portfolio and career development tool for the ICTindustry. TCC has a friendly front end that provides access to a pricelesswarehouse of credible skill information and value-added tools. TCC is heavilymarketed to students, counselors, job-changers, educators, and training cen-ters. The incumbent audience is also targeted through advertisements in tradepublications and certification preparation leading groups of ICT workers, such as readers of this book, shouldencourage their employees to utilize this resource to evaluate and maintain theirskills portfolio. The TechCareer Compass is a good tool to discuss skilldevelopment issues and career plans. Visit to see thevariety of resources TCC offers. It is a website you and your employees willbookmark and use contemplating the fast-paced world of ICT, an analogy that naturallysprings to mind is the Indianapolis 500 race. Cars whizzing past the stands atCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Skills and the Worker: Let s Get Real 101speeds in excess of 200 miles per hour is normal. I remember little of the race;it was a good thing an animated version was shown on large video , I would have been totally lost. I never actually saw the race. All Ihad time to see was a blur of color as the cars passed right in front of me. How appropriate for our discussion, when you realize that the word careerused as a verb means to go at top speed (Webster, 1981). Pritchett (1997)states, In today s world, careering comes down to a race against change apersonal contest to see if we can grow as fast as the challenges we face in ourwork. Our schooling needs to move at full speed, and this calls for a strategyof learning in motion (pp. 23-24). As ICT professionals the constant battleis to be in the thick of the race, while at the same time retaining the ability to stepback and observe the video screen. We need to keep moving ahead at fullspeed, while taking a little time to look at the bigger picture to see that we haveour career goals on right is formally known as the Computing Technology IndustryAssociation. It is the information and communications technology industry slargest trade , M. (1990). The adult learner: A neglected species. Houston, TX:Gulf , E., & Manzow, T. (2003). TechCareer Compass. Oak BrookTerrace, IL: , P. (1997). Fast growth: A career acceleration strategy. Dallas,TX: Pritchett & Associates, , K. (2002). The Organization Man. St. James Encyclopedia of PopCulture. Accessed July 23, 2003, from: ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
102 LaheyWebster, . (1981). Webster s New Collegiate Dictionary. Springfield,IL: G&C Merriam , . (2002). The Organization Man. Philadelphia, PA: University ofPennsylvania ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 103Chapter VOptimizing IT SkillsManagement InitiativesKen StraussBookman Testing Services, USAAbstractThis chapter identifies the essential information required in effective ITskills management initiatives. It argues that foremost among thisinformation is in-depth insight into an individual s specific areas ofstrength/weakness. In a logical step-by-step discussion, the chapter buildsupon a simple assessment to finally arrive at the complexities of anassessment required to deliver this detailed insight for effective skillsmanagement programs. It then goes on to discuss reporting and analysisof detailed assessment results to maximize the benefits of skill assessmentsin hiring, training, and overall skills management technology continues to advance at an ever-increasing pace, more organi-zations will come to recognize the importance of IT skills managementCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
104 Straussprograms. It will become evident that a corporation s success will depend onthe success of its information technology initiatives. Yet, the new rules ofcorporate success brought on by the rapid advancement of technology willdictate that IT initiatives depend not so much on the hardware and/or softwaretechnology selected, but more on the skills of the individuals responsible forimplementing the systems and technologies get more complex, requiring more knowledge, better skills,and specialization, it will become more difficult to find qualified IT profession-als. Successful organizations will recognize the critical importance of effectivelymanaging the skills of their current IT professionals. They will also recognizethat the first step in managing those IT skills is to have a detailed, objective, andaccurate inventory of the skills of their current staff, as well as the skills requiredfor their future projects. With the proper evaluation of detailed IT skills,organizations will be able to save time, money, and optimize their hiring,training, project staffing, and career development before today s massive IT departments existed, industrial psychologistswere assessing employee soft skills by treating each personality trait as a uniquemeasurable attribute. In the 1990s, as corporate and industrial leaders recog-nized IT s critical importance to overall corporate success, attention began toturn towards assessing IT technical skills. Following the experience in assessingsoft-skills, it was only natural to treat each technology as a singular uniqueattribute. However, this brought about a false start to IT skills management, asthe real power behind an IT technical assessment lies in the evaluation of themany detailed skill sub-topics comprising the scope of a given at this detailed sub-topic level harnesses the full power of IT skillsassessment and opens the door to dynamic and effective skill learning management systems (LMSs) and/or skills management systemstreat IT skills like they do soft-skills assigning a number on a scale represent-ing the individual s success in achieving that particular soft-skill (., workswell as a team player or shows initiative ). This treatment of each soft-skill asa unique attribute to be numerically evaluated was passed down to IT skillassessments. Each IT technology (., Cobol, Oracle, Network Administra-tion, etc.) was treated as a single attribute to be numerically evaluated. Thus anindividual s IT skill profile would contain a series of numerical ratings corre-sponding to his/her skill level in various technologies (., 5 in OracleProgramming, 4 in Powerbuilder, and 2 in Windows Programming).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 105The problem inherent in treating a given IT technology, such as Oracle, as asingle skill to be assessed is that, unlike soft-skills, hard-skills in technologiesare comprised of many different areas of knowledge. A professional workingin a given technology may have very senior skills in certain aspects of thetechnology that he uses often on his current project, and almost no knowledgein other sub-topics of the same technology that he has not used in his currentor prior multi-skill aspect of an IT technology requires that a truly valuableassessment tool in that technology incorporates a more detailed analysis thancan be determined from a single score. An assessment that analyzes skills at thedetailed sub-topic level can provide the insight needed by the skills manage-ment program to optimize many IT functions including:Project Staffing Why build project teams in which every team member hasthe same weakness? With sub-topic assessments you can build teams withsynergistic and complementary Skill Gap Analysis Aggregate individual results to gain unparallel insightinto the proficiency of your organization in a given technology. Determinethe specific areas that need to be built up through hiring, training, ortransfer within the Why include topics in the curriculum in which the class already isproficient? Use sub-topic assessments to customize course content to thespecific needs of the class. Trim a course from five days down to twodays!Hiring If a determination has been made that the skill gaps cannot be closedinternally, focus your candidate search on those individuals who have thespecific skills to plug the skill gaps in your , objective and reliable skill assessment at such a detailed sub-topic level is not easy. Determining proficiency in any single topic can requireasking the test taker many questions to obtain the required amount of this number of questions over all the important sub-topics within agiven technology results in an assessment process that can last for several hours(if not days!). Many of the commercially available assessments avoid this timeissue by simply ignoring sub-topic analysis entirely. The resulting analysisprovided by these assessments is typically a single number representing theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
106 Straussindividual s overall proficiency in the technology. Such assessments will not bea significantly useful tool in effective skills assessments will claim to provide the needed sub-topic analysis, but theirtesting methodology limits their analysis to relative scoring as opposed to absolute scoring. Relative scoring would imply that an individual is strong ina particular sub-topic relative to his/her proficiency in other sub-topics withinthe technology. A relative skill analysis such as this can actually undermine thesuccess of skills management initiatives. To illustrate this point, imagine you arethe manager of a baseball team that needs a quality first baseman. You ask afriend for help and he suggests that you try Bob at first base. First base is Bob sstrongest position. You play Bob at first base and he can t even catch the turn to your friend and say, I thought you said first base was his bestposition? It is, he replies. You should see how badly he plays third base! The above scenario illustrates the problems of relative skill analysis. Nowconsider this scenario playing out in the IT department s search for a lead Javaprogrammer on a critical project. A relative assessment of skills might imply acandidate is strong in Java; yet what it could be saying is that this candidate sJava skills are stronger than his Cobol skills, but in reality both skills are should be clear that relative skills assessment could have disastrous effectson the success of skills management the success of skills management programs dependent upon the qualityand detail of the incorporated skills assessment, and given the difficultyinvolved in assessing detailed sub-topic skills, it is evident that the choice of anassessment tool is one of the critical first steps in establishing an effective skillsmanagement program. This chapter will first discuss the characteristics re-quired of an IT skill assessment vehicle to reliably and objectively provide thelevel of detail required for effective skills management. It will then cover theeffective application and analysis of the detailed assessments in a skillsmanagement and Reliably DeterminingSub-Topic SkillsTo fully realize the true value of sub-topic assessment in effective skillsmanagement, one only need review the types of feedback that can be providedCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 107by a skill assessment tool. We will begin with the simplest type of feedback the number of questions answered correctly. Consider the assessment resultsof a C++ exam shown below. C++ Assessment Results Test Taker: John Smith; Total Questions: 45; Correct: 30; Incorrect: 15 Clearly the above feedback leaves a lot to be desired. Among its drawbacksis a failure to provide insight into the degree of skill indicated. Is 30 correctanswers a bad score or a good score? What is the average score?To some extent, additional insight into the quality of a score can be obtainedfrom a percentile. A percentile will identify where a given score falls among thescores of all test takers. For example, if a score of 80 (on a scale of 1-100) isassociated with a percentile of 65, it means that the score of 80 was higher than65% of all scores. Consider our improved result as shown below: C++ Assessment Results Test Taker: John Smith; Score: 80; Percentile: 65 The percentile provides valuable insight into the skill level of the test taker. Thescore of 80, while above average (50th percentile), is not quite indicative of atruly senior individual. A percentile of, say, 90 would identify the test taker asin the top 10% of all test the percentile provides additional insight into the test taker s skill/knowledge, it is still not the level of feedback needed for effective skillsmanagement. The above result does not indicate the true level of skill. Is 80indicative of a senior-level individual or an entry-level individual? The percen-tile can provide some indication of the true skill level, but it will vary accordingto the technology being tested. For example, the Cobol language has been aprogramming staple for nearly 40 years. Those professionals who work in theCobol language have had a great deal of time to develop their , a score of 80 on a Cobol assessment (which may be indicative ofa very senior individual) may only correlate to a percentile of 50! On the otherCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
108 Straussend of the spectrum, consider a brand new technology, which has only beenavailable for use for a few months. The industry professionals have not yet hadthe time to develop a great deal of expertise in this latest technology. A scoreof 45 on an assessment in such an emerging technology might be in the 90thpercentile!While the scaled score and percentile combination offer more insight than thescaled score alone, they still lack an absolute measure of skill. Consider theassessment result shown below (Figure 1).Figure 1 Fig. 1 Chart Courtesy of TeckChek Courtesy f TeckChk The above result not only shows a scaled score of 18 (on a scale of 1-40) andthe associated percentile of 74, but also indicates that this score of 18 is amedium-level score. In other words 74% of the professionals who have takenthis assessment score at a medium or lower level of knowledge. Thus 26% oftest takers demonstrate knowledge above a medium level. This insight mightinform a recruiter, looking to hire a senior-level individual, that they might havetrouble locating viable senior candidates and perhaps should consider thecandidate with a medium score. This would be indicative of a relatively newtechnology in which the IT industry has not yet had the opportunity to developa great deal of expertise. Compare this assessment result to the one shown inFigure 2 in a mature technology such as Cobol ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 109Figure 2 COBOL II PROGRAMMING Robert Lanwan Chart Courtesy of TeckChek Figure 2 Courtesy of TeckChekIn the mature technology of Cobol II, the score of 18, while still indicating amedium level of knowledge, is in the 33rd percentile. This means that 67% ofthe test takers scored above the medium level. Thus, the recruiter looking tohire a senior-level Cobol II programmer might pass on the medium-levelcandidate with the knowledge that he/she most likely will be able to locate acandidate with the desired senior-level this then the complete assessment result we seek? No. It still lacks thedetailed insight required of an effective skills management tool. To see how wecan improve the value of an assessment, consider the C++ result in Figure result (Figure 3) not only provides the insights of a score and percentile,but also provides the detailed sub-topic evaluation required for IT skillsmanagement. With these sub-topic evaluations for the entire IT staff, one cancustomize individual and group training, identify enterprise-wide skill gaps,target hiring to fill the skill gaps, ensure the availability of specific skill setsneeded within the organization, and build project teams with synergistic andcomplementary short, detailed sub-topic assessments will enable the IT organization tooptimize the management of the current skills of employees as well as those ofprospective issue now is to identify the proper assessment tool that is structured toprovide this level of reliable, more objective ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
110 StraussFigure 3 Chart Courtesy of TeckChek Fig. 3 Courtesy of TeckChekCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 111Finding the Right Skill Evaluation ToolCertification vs. AssessmentThe first step in locating the proper assessment tool is to recognize thedifference between certification and assessment tools. Certification tools offeran official certification, degree, or other badge of merit to indicate that the testtaker has scored at or above a predetermined level. Most certifications areforms of pass/fail exam that often do not indicate the extent to which theindividual exceeded the certification level or fell short of it. They also do nottypically provide the detailed sub-topic analysis required for IT skills manage-ment programs. Certifications are used by the test taker to establish his/hercredentials. In essence, a certification exam is a marketing tool for the individualtest , on the other hand, typically do not provide a pass/fail level, butare designed to provide a detailed analysis of the test taker s proficiency in agiven IT technology. Most assessments will provide percentile scores showingwhere the test taker ranks among all test takers. These percentiles provideinsight into the test taker s relative level of proficiency among the larger testpopulation. Some of the higher quality assessments will even provide specificscores/percentiles in different areas such as book knowledge and practicalexperience to offer further insight into the test taker s proficiency. The bestassessment tools for skills management programs are those that identify sub-topic proficiencies. It is this detailed sub-topic evaluation that distinguishes theassessment product as a critical component of a successful skills managementinitiative. While a certification exam is a marketing tool for the individualtest taker, a skills assessment is a fundamental skills management tool forcorporate use. In fact, to ensure the integrity of the assessment results, a goodassessment tool will not be available in the open market to the individual ITprofessional, but will only be available to corporations for use with currentemployees or employment QuestioningDetermining sub-topic proficiencies requires significantly more feedback (num-bers of test questions) from the test taker than would a simple assessment ofCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
112 Straussoverall knowledge in a given technology. Each sub-topic must be means sub-topic assessments could require hundreds of questions de-pending upon the number of sub-topics being evaluated. It is apparent that thetraditional method of static testing (tests with fixed questions) may not bepractical in determining sub-topic the early twentieth century, Alfred Binet created an IQ test in which thequestions were selected, by the test interviewer, as the test proceeded. Specificquestion selection rules were applied by the interviewer to select the mostappropriate questions for the test taker based upon their prior answers. In thismanner the test was designed to adapt to the knowledge level of the test , it took over half a century for the advent of computers to capitalizeon advantages of adaptive testing and make it a commonly used adaptive testing the questions are not fixed, but are determined as the testprogresses based upon the prior answers given by the test taker. The morecorrect the prior answer is, the more difficult the next question; conversely, theless correct the prior answer is, the easier the next question will be. In thismanner the test adapts to the demonstrated knowledge of the test taker. Thus,stronger test takers will receive harder questions, while less knowledgeable testtakers will receive easier questions, effectively eliminating questions that arepre-determined to be too easy or too hard for the test testing can be compared to a high jump. If the jumper can clear aheight of 5 feet, then the bar is raised to 7 feet. If he is unable to jump over theseven-foot bar, then the bar is lowered to 6 feet. If he jumps over the six-footbar, then it is raised to feet. The bar continues to be adjusted in increasinglysmaller increments until the maximum height that can be cleared is this manner, an adaptive test determines the maximum level of knowledgedemonstrated by the test , this method of questioning would prohibit the score from being asimple function of the number of correct answers; that would not be fair to thosecandidates receiving the harder questions. Instead, an adaptive test will assigna weight of difficulty to each question, much like a degree of difficulty isassigned to every dive in a diving contest. The more difficult the dive (or the testquestion), the more credit is given for its successful completion and the lesscredit is lost for failing the dive (or test question). Losing credit for failing toanswer a question correctly is the same as the bar being lowered when a jumpis unsuccessful. How much credit is gained or lost is a function of both thedifficulty of the question and the extent to which the question was answeredcorrectly or incorrectly (some wrong answers can demonstrate more partialCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 113knowledge than other wrong answers and will not lose as much credit ifselected).What is the benefit of adaptive testing? There is a security benefit (test takersdo not receive the same questions) as well as a test reliability component, in thatprior exposure to the test questions resulting in correct answers the secondtime the test is taken will only produce more difficult follow-up questions thanwere received the first time. However, the major benefit of adaptive testing isthat it greatly reduces the number of required questions (and thus test time) byeliminating questions that are determined to be too hard or too easy for the testtaker based upon their prior example, if a test taker has just successfully answered a question onEinstein s Theory of Relativity, it makes no sense to ask a follow-up question: How much is 2 + 2? Similarly, if a question to identify the current presidentof the United States is answered incorrectly, there is no value in asking a follow-thup question to identify the 11 vice president. In both cases, success on thefollow-up question can be accurately predicted without even asking thequestion. In this manner (eliminating questions before they are asked), adaptivetesting can provide the required feedback in far fewer questions. This makesadaptive testing the perfect solution to the large amount of feedback requiredfor sub-topic Sub-TopicsTraditional adaptive methods are just one step towards the solution of attainingassessments at the sub-topic level. To better understand this, we need toexamine a scenario in which a test subject has been broken down into 16 sub-topics. Suppose a test taker is an expert in sub-topic X, but is fairly weak in theother 15 sub-topics due to lack of exposure to them. As the topic X experttakes the test, his incorrect responses to the majority of questions outside of hisspecific area of expertise would cause the adaptive testing engine to selecteasier and easier though he might answer the questions in sub-topic X correctly, they willalways be easy questions, and he will never have the opportunity to demon-strate his superior knowledge of sub-topic X with difficult clear solution is to use the adaptive method independently within each sub-topic. In this manner, knowledge in one sub-topic would not impact thedifficulty level of questions in another sub-topic, thereby enabling a reliable andCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
114 Straussindependent assessment in each sub-topic. Adapting the test independentlywithin the sub-topics is a fundamental and critical component of any attempt toprovide detailed sub-topic assessment in a reasonable timeframe. Unfortu-nately, most IT assessments, with a few notable exceptions, do not employ theiradaptive methods independently within sub-topics, making them imperfecttools for skills management Correct AnswersIn summary, it is apparent that due to practical time limits, an assessment mustemploy adaptive methodology to reduce the number of required questions onthe test. Further, the test should adapt independently within sub-topics toprovide the reliable sub-topic detail assessment required for optimizing theskills management process. But is this the final solution for a skills assessmentin an effective IT skills management program? Not adapting within sub-topics will reduce the number of questionsrequired in each sub-topic, a great deal of detailed feedback is still needed tomake a determination of the test taker s knowledge in each sub-topic. Howmany questions would such an analysis require in each sub-topic? Five? Six?Ten? In a technology that has been broken down into 16 sub-topics, this couldeasily result in a test of more than 100 questions!The problem is that each question is providing binary feedback it wasanswered either correctly or incorrectly. It does not provide enough insight (towhat extent is the answer correct or incorrect) to optimally determine the levelof the next question. If a high jumper can clear a bar at 5 feet, how high do youplace the bar for the next jump? If you had more information than simple binaryfeedback (cleared or failed to clear the previous height), you would be able tomake a more optimal placement of the bar for the next jump. If, for example,you knew the jumper had actually cleared the five-foot bar by three feet, youmight place the bar for the next jump at 7 or 8 feet, rather than a smaller increaseto 6 feet. This insight into how much the jumper cleared or failed to clear thebar helps to determine the optimal placement of the bar for the next jump, andthus reduces the number of required jumps to determine the maximum level thejumper can attain. By the same reasoning, greater insight into just how corrector incorrect an answer is can help to determine a more optimal level of difficultyfor the next question and thus reduce the number of required ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 115The issue then is how to get more insight out of the answer to a given first glance this might seem to be a futile task. After all, an answer is eithercorrect or incorrect. But not all incorrect answers are equally incorrect! Somewrong answers can be completely off the mark, while others can at leastdemonstrate some partial knowledge. Even among the correct answers, somecan demonstrate more insight and knowledge than other correct answers. Eachanswer should be provided a weight, which indicates the extent to which it iscorrect or incorrect. The weight associated to the selected answer can then beused to determine a more appropriate level of difficulty for the answers are a common component of adaptive testing. However, thereal leap in maximizing the value and the feedback derived from a question isfor the question to allow for more than one correct answer. Consider a test inwhich each question can have up to three correct answers; the test taker is nottold how many correct answers there are, but is instructed to select all thecorrect answers he or she finds, up to a maximum of three. Credit is gained foreach correct answer selected; credit is lost for each incorrect answer credit is also lost for each correct answer not selected! How much creditis gained or lost by each answer is determined by how correct or incorrect theanswer presenting five possible answers and allowing the selection of up to three ofthem, the mathematicians among us will recognize that there are 25 possibleanswer combinations. Each one of those combinations demonstrates a differentlevel of knowledge. Each combination has a different amount of credit (positiveor negative) depending upon the answers it comprises, and each combinationleads to a different level of follow-up question within the adaptive -five distinct answer combinations allow the test taker to pinpoint his/her exact level of knowledge posed by the question. This precision will allowfor the selection of a more optimal difficulty level for the follow-up concept is best grasped by seeing an example. Consider the followingquestion on . geography:Which of the following are states in the United States?, DCCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
116 StraussLet s review just five of the possible 25 answer combinations and see how theyprovide different levels of insight into the respondent s knowledge on , California This is the correct answer. Respondent receives themaximum credit and the most difficult follow-up Credit is given for selecting Texas, but some credit is lost forfailing to select California. The follow-up question will not be as Respondent has no clue about . geography and is mostlikely guessing. This response will lose significant credit and result in a veryeasy follow-up ; Paris; Washington, DC This is the worst of the 25 possibleresponses. Credit is lost for selecting Paris and Washington; a lot of creditis lost for selecting Jupiter, and credit is also lost for failing to select Texasand California. This will result in the easiest possible follow-up ; Washington, DC This combination would provide more creditthan Texas and Paris, because although Washington, DC, is not correct(it is a district and not a state), it does demonstrate some partialunderstanding of . geography, more so than Paris above example should demonstrate the extent to which the test taker isprovided the opportunity to pinpoint his/her exact understanding of the subjectquestioned. This level of detail, when combined with the efficiencies of adaptivetesting, maximizes the feedback obtained from the test taker and provides thedetailed insight into sub-topic proficiency that is required for effective us summarize what we have covered to this point: IT initiatives will depend upon the effective management of IThuman management of IT human resources will require detailed insightinto sub-topic to time and resource constraints, a practical assessment that candeliver objective and reliable sub-topic skill assessments should employ: questioning independently within questionsCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives correct answersNow that we have identified what to look for in an assessment tool that can beof value in a skills management program, the next step is to review what to dowith the information provided by the assessment tool. Exactly how does a skillsmanagement program utilize the sub-topic assessments to optimize its hiring,training, and IT development efforts?Optimizing Skills ManagementNow that the criteria for selecting an appropriate assessment tool have beenidentified, the assessment tool has been acquired, and all the employees havebeen assessed in the appropriate technology, how is the detailed data providedby the assessment results used in skills management? How do we effectively usethis detailed insight into the sub-topic skills of employees to improve hiring,team building, training, and to increase the overall success of IT initiatives?First, the assessment results must be placed into a database that makes themaccessible, searchable, and provides for aggregation and reporting. Someorganizations will build their own in-house applications, while others mightpurchase off-the-shelf skills management systems. The better assessmentproducts will provide their own database with tools for searching, aggregation,and analysis. Whichever option the organization chooses, once the database isestablished and populated with sub-topic skill assessments, the real skillsmanagement can simplest use of this information is to provide the individual with objectiveinsight into his/her sub-topics of strength and weakness. This insight can helpguide further training for the individual. In fact, some assessment tools, such asTeckChek, will provide a facility to map the assessment sub-topics to thetraining curriculum of an organization or third-party training vendor (see Figure 4).This allows the individual to quickly obtain a learning prescription, which directshim/her to specific modules in the curriculum to address their specific weak-nesses. A custom training prescription based upon a detailed assessment ofsub-topic skills can save a great deal of time and money in the upgrading ofemployee ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
118 StraussFigure 4 Training Prescription Robert Lanwan Based upon assessment results in C++ Sub-Topic Vendor Course Title Module # URL Inheritance and XYZ Training Advanced C++ 1,3 Co. Programming Functions Memory Mgmt XYZ Training Advanced C++ 6 Co. Programming TrainOnlineC++4,7 Programming Special Member XYZ Training Introduction to 9,10 Functions Co. C++ While custom training prescriptions are a valuable product of detailed sub-topic evaluations, the real impact on IT initiatives is the information theassessments provide through aggregation. By combining the strengths/weak-nesses of a designated group of individuals, several IT-related functions (hiring,training, team building, etc.) can be significantly enhanced and 5' Worldwide Enterprises, Inc. )* Secure &+ C ++ P ROGRAMMINGSkill Gap Analysis% & 10, (test categories in order of weakest to strongest)Exception HandlingStandard Template LibraryNamespaces and Memory ManagementAdvanced TemplatesBasic TemplatesTypes and DeclarationsAccess ControlInheritance and Virtual FunctionsObject Oriented ProgrammingOperator and Function OverloadingC++ Language SyntaxMultiple Inheritance and Runtime Type IdentificationC++ ClassesSpecial Member FunctionsExpressions and StatementsStandard Strings, Iostreams, and LocalizationCourtesy of TeckChekCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 119This means the assessment tool must have, or you need to create, an aggrega-tion report. These reports are often referred to as skill gap analysis. Considerthe skill gap analysis chart shown in Figure 5 visually displays the aggregate proficiency of the group in each sub-topic of the tested technology (C++). Each row represents another sub-topicwithin C++.The length of the (crow s feet) bar on a row represents that portion ofthe group that had a weakness in that length of the (horizontal lines) bar portion indicates the portion of thegroup that had neither a weakness nor a strength in that length of the (checkered squares) bar represents the portion of thegroup that had strength in that illustrate the information provided in this chart, let us examine the bottomrow, Standard Strings, Iostreams, and Localization. According to the relativesizes of the bars, about 10% (crow s feet) of the group is weak in this sub-topic,approximately 50% (horizontal lines) are proficient, and 40% (checkeredsquares) are insight provided by the skill gap analysis is the true catalyst in effective skillsmanagement. It will provide benefits in many human resource functionsincluding focused hiring, team building, and custom training. First we willexamine its use in project team the previous skill gap analysis chart (Figure 5) represents the collective skillsof a proposed project team, is this a well-rounded team as currently staffed?Can a more effective team be put together? The answer depends upon therelative importance of each sub-topic to the project objectives. If the top twosub-topics, Exception Handling and Standard Template Library, are criticalcomponents of the project objective, then this proposed team might not beideal. Approximately 90% of the team is weak in these topics (as shown in therelative length of the crows feet bar), and there is no guru on the team to providesenior-level guidance in this sub-topic (lack of a checkered bar).There are several responses to address the weaknesses in the make-up of theproposed team. First, what-if analysis can be done to try to arrive at a morebalanced and synergistic team. What if persons X and Y were replaced withpersons A and B from the pool of employees? How would the proposed teamCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
120 Strausslook now? A second skill gap analysis would be produced for the newproposed team and evaluated to determine if the new mix of skills is morecomplementary and proficient in the required sub-topics. This what-if analy-sis can be done repeatedly until a compatible team is identified or until it isobvious that certain skills are lacking in the employee pool, preventing thecreation of a more effective shortcut approach to finding a more optimal team composition would be adirect skills search through the database of assessment results looking for anindividual(s) with the appropriate skills to plug the identified skill gaps on theteam. In addition to searching for the specific sub-topics required for theproject, a good search facility might also allow for additional search criteriabased upon the areas of analysis provided by the assessment tool. In additionto an overall score and percentile, more sophisticated assessment tools willprovide scores for additional criteria including work speed, book knowledge,practical experience, and other parameters that may be measured by theassessment. These additional parameters allow searches to be more focused intheir hunt for appropriate team members. For example, a high work speedscore may be desirable for individuals who will be working on a the search (Figure 6) for a candidate for the hypothetical projectteam. The project manager has decided to search for someone to fill the skillgap in Standard Template Library on the proposed team. The project managerwants a mid-level person (overall percentile above 60). Since this person willbe the project team guru in this subtopic, it is desirable to find someone whohas solid experience in this sub-topic, not someone who has obtained theirknowledge through reading or training. Therefore, one of the search criteria isththat the candidate be over the 80 percentile in practical experience. (Note:higher quality assessments will distinguish book knowledge from proficiencygained through practical experience.) Since this is a time-critical project, theideal candidate will have demonstrated an ability to think and resolve issuesquickly. Therefore, another search criteria is that the individual be above theth60 percentile in work the search requires that the candidate have a strength in the targetsub-topic of Standard Template Library. However, the project manager hasalso suggested that knowledge in Advanced Templates would be a plus for ateam member. This does not mean that the individual must necessarily have astrength in Advanced Templates, but it does imply that the individual should nothave a weakness in the ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 121Figure 6 Screen Shot Courtesy ofTeckChek Figure 6 Courtesy of TeckChekAll of the previous criteria have been supplied in the search in Figure who are identified in the above search can then be added to theproposed team and a new skill gap analysis produced. Since the individualsidentified in the search will also have additional strengths and/or weaknessesthat were not necessarily part of the search criteria, some of them may be betterfits than others into the overall project team composition. By trying various teamcombinations, the optimal team for the specific project can be a search through the enterprise fails to turn up candidates with the appropriatetarget sub-topic skill, skills training to develop those skills can be one value of sub-topic assessment in group training is to reduce the time andcost of the training. Using sub-topic assessments, the training need not involvethe entire technology, but can focus on the training modules dealing with thosesub-topics in which the group has demonstrated a collective weakness. Thisprovides a huge savings of training time and budget by eliminating superfluouscurriculum while concentrating on the desired optimize Custom Training Content, a skill gap analysis report is producedrepresenting the aggregated skills of the student body (Figure 7). This informa-tion is provided to the instructor who can then customize the curriculum to theneeds of that specific group of students. Consider the skill gap analysis reportin Figure ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
122 StraussFigure 7Courtesy of TeckChekUpon reviewing this chart the instructor might choose to entirely eliminate thebottom four topics from the curriculum because over 80% of the class is alreadyproficient in them. Instead, the course would concentrate on the top four topicsfor which 80% of the class has shown a weakness. This type of custom-focusedtraining can help to significantly reduce class time as well as the cost ofclassroom training. CASE STUDY In 2000, a major resort/hotel chain wanted to improve the knowledge of its Windows 95 Help Desk team. The team consisted of 20 employees. The training vendor offered a five-day course, which was delivered in their classroom for $300 per student per day. Thus, retooling the skills of the entire department would have cost $30,000. One issue was the hotel s concern that not all team members be in training at the same time so that the Help Desk would not be closed. The hotel first gave each team member a detailed sub-topic assessment in Windows 95. The overall assessment results were used to break the class into two groups: a group of more senior members and a group of the more junior members. A skills gap analysis using the sub-topic assessments was performed for each group. The skills gap report was then given to the vendor so the vendor could eliminate from the curriculum those topics that were unnecessary for each group. The reduced curriculum resulted in two custom classes that each covered four (4) half days. By training the juniors in the morning and the seniors in the afternoon, the entire department completed their targeted training in just four days, with each employee spending two person-days in training. The total cost was reduced to $12,000 for the 40 person-days of training and a $2,000 customization fee. This was all accomplished while maintaining 50% staffing of the Help Desk at all times. Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 123The value of sub-topic assessment is also evident in the hiring process. Unableto locate the appropriate sub-topic skills in the employee population or providetraining to develop those skills, the HR department can be alerted to look foremployment candidates with a strength in the desired skills. By extending thesub-topic assessment process to employment candidates, a new level of depthis brought to the Hiring Process to optimize the match between job candidatesand project needs. By having candidates take the assessment, not only canqualified candidates be objectively identified with enterprise-wide standards,but also candidates with appropriate skills can be found to fit into the exactneeds of projects. In fact, expanding the skill gap analysis from project teamto all employees will provide insight into enterprise-wide skill gaps. This insightcan then be translated into more efficient and productive selection of newemployees. CASE STUDY A major communications firm was undertaking a critical project for its Billing department. The principle technology being used in the project was Oracle. Accordingly, all employees who were to be on the project team were assessed in Oracle sub-topics. The results of the subsequent skill gap analysis indicated that the group was weak in the sub-topic PL/SQL packages. The project manager indicated that this was a fairly crucial aspect of Oracle relative to their project requirements. The HR department was instructed to begin a search for a new IT employee with Oracle experience and specifically with expertise in PL/SQL packages. In response to its job offering, the HR department received more than 100 resumes. A short Oracle assessment was used as a screening tool to narrow the field of candidates down to the top 20% of scorers on this short assessment. The 20 candidates with the highest scores then proceeded to the next step in the hiring process, which included a background review, reference check, introductory interview, and full Oracle sub-topic assessment. The sub-topic assessment identified three of the candidates as having superior expertise in PL/SQL packages. While these three candidates were then given an in-depth technical interview, the remaining 17 candidates and their assessment results were stored in the candidate database for consideration in future opportunities. One of the three candidates was selected for hire and was placed on the Oracle project team, where his areas of expertise helped to round out the team s Oracle knowledge base. The sub-topic assessment had not only identified the skill gaps of the project team, but had helped the organization to successfully plug those gaps through targeted hiring. If the skill assessment tool allows for the grouping of candidate test results, thenadditional analysis can be done through group comparisons. Consider Figure 8,which represents a comparison between assessments taken pre-training andpost-training for the same group of students. This assessment tool providesscores in a range of 1-40 with this particular analysis showing a higherdistribution of scores for the post-training assessment, thus confirming thesuccessful transfer of knowledge achieved by the ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
124 StraussFigure 8Courtesy of TeckChekThis type of comparative analysis can serve many functions. In addition to itsuse comparing pre-training and post-training knowledge, it can also be used inthe hiring process, comparing the scores of candidates found at a job fair versuscandidates who responded to an ad in the paper. Such an analysis can help anorganization make better use of its recruiting chapter has shown examples of how skill analysis can benefit IT initiativesin several ways. The key component to successful implementation of thesebenefits is assessing skills at the detail sub-topic level. With such detailedfeedback available, creative HR managers will be able to find even moreapplications to improve the overall efficiency of IT skills ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Optimizing IT Skills Management Initiatives 125ConclusionAs virtually all industries progress towards a future that is driven by technology,a corporation s success will in large part depend upon the success of its ITinitiatives. As software to drive that technology becomes more complex, thesuccess of those IT initiatives will depend less on the selected hardware andsoftware and more upon the skills of the people who implement the most successful companies will be those which have gained the ability toeffectively manage their IT skills. In their drive to succeed, more and morecompanies will begin to implement skills management initiatives incorporatingskills inventory databases. Populating the skills database with objective skillassessments will be critical to the effectiveness of any skills managementprocess. Thus the selection of a reliable objective assessment tool will play avital role in the skills management process and ultimately in the overall successof IT initiatives. To optimize the skills management function, the selectedassessment tool, for IT skills in particular, must provide insight into detailedsub-topic skills. It is these insights into sub-topic skills that will determine thepractical value of the skills management process. Sub-topic skills will enhancemany of the skill management functions, including training, hiring, skill gapanalysis, and team building. Those assessment products that can provide theseinsights will become the cornerstone of successful IT skills ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
126 LaheyChapter VIGovernmentInvolvement inSkills IssuesElizabeth LaheyElizabeth Lahey and Associates, USAAbstractTechnology products and services make up approximately one-third ofthe . economy. The statistics are similar around the globe. Governmentsare concerned because this industry sector significantly impactsemployment and productivity rates. The birth of the information age andthe criticality of knowledge workers had great potential. To date, however,the benefits are not fully realized. The rate of change in the industry hasinstead created a significant gap between the needs of employers and theskills of the workforce. While technology professionals cannot find jobs,employers claim they cannot hire workers with necessary skills agencies are taking action to coordinate state, national, andinternational projects to bridge this skill gap. One project currentlyunderway in the United States is the development of national skillstandards for the information and communications technology (ICT)industry sector. It is funded by the Department of ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 127IntroductionIt is important to explore governmental skill development efforts becausegovernment wants to stimulate cooperation across companies, educationalinstitutions, and support agencies, all of which have a vested interest in the endproduct, skill standards. Government legislation is a major tool because it canprovide funding to create and promote national acceptance and global en-dorsement for developing skill standards. In the information and communica-tions technology (ICT) industry sector, government coalitions can create skill1standards that reflect extraordinary levels of rigor. Individual companies couldnever hope to create such a set of skill standards, no matter how wellresearched, developed, or marketed. Skill standards that are accepted by ICTstakeholders facilitate skills planning and coordination at all levels. The countrythat implements such a schema has an inherent advantage in the is one of the most significant economic industry sectors in the across the globe are scampering to make sure that they do not get leftbehind in the technology race. Knowing the skills necessary to update andsupport their employee base is vital to this effort. Governments are thereforedeeply interested in identifying, maintaining, and disseminating an accurate setof skill standards they can share with their potential worker population. To haveany chance of competing in a global economy, technology skills are essential tothe success of even the smallest nations. In an information-based economy, sizeis chapter describes skill standards not skill portfolios because goodskill standards facilitate the development and use of skill portfolios. Sincecreating and promoting skill standards is important to governments, I begin byexplaining what is meant by the phrase skill standards. Once this terminologyis established, it will be easy to understand why governments are particularlyinterested in skill standards for the ICT industry sector. Statistics are presentedto illustrate the impact of this sector on the overall national and information and communications technology industries have evolved overalmost 50 years. Some may question why skill standards do not already existfor this sector. Others may wonder why governments are interested in devel-oping and promoting skill standards at this point in the sector s history. Thisdiscussion is an overview of the ICT industry sector s impact on world laborCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
128 Laheymarkets using statistics from the United States. Finally, this chapter details acurrent project to illustrate the significant governmental involvement in skillstandards summary the objectives of this chapter are to: skill statistics on the significance of the ICT industry sector to theUnited States two relevant factors behind rapid change in the ICT the impact of the ICT industry sector change on the United Stateslabor the United States ICT Skill Standards Project in of Skill StandardsBefore going into detail about why governments care about the developmentand support of skill standards, it is important to make clear exactly what ismeant by the term, skill standards. Later we will use this information to explorehow government, industry, learning institutions, and support groups use skillstandards to clarify ICT skill skill standard is simply a description of work activities that must beperformed, how well the work activities must be performed, and the levels ofassociated knowledge and skills required for the work activities to be per-formed successfully. See Figure 1 for a visual representation of a skill are two components to a work activity: the first describes the work itselfand the second describes the worker. The work piece has three parts. The firstis critical work functions (CWFs). Critical work functions are high-level tasksthat must be performed by a person in the specified work activity. A typicalworker will perform four to seven critical work functions on a regular basis. Agiven individual or company may perform additional functions outside theumbrella of critical work functions. But to be included as part of a skill standard,the work functions must be critical and therefore performed by every personand every company that does the work. Work functions not meeting the criteriaCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 129Figure 1: The Skill Standard Work Activity Critical Work Functions (CWF) Work Key Activities (KA) Component Performance Indicators (PI) Occupational and Technical W Knowledge and Skills (OTKS) orker Component Academic & Employability Skills (A&E) Skill Standard are not standard and are excluded. As an aside, a group of critical workfunctions differentiates one worker s role from another worker s role. Employ-ers combine critical work functions to create jobs and job descriptions. Someexamples clarify the level at which critical work functions are designed. Theyinclude: writes computer code, monitors databases, or repairs network second part of the work component for a work activity is called keyactivities (KAs). Five to eight KAs further define each critical work critical work function writes code may include tasks such as: reviewsprogram specifications, develops program logic flows and types final part of the work component for a work activity is performanceindicators (PIs). Every critical work function has a set of PIs that tell if workis being done successfully or not. Examples for writes code may include: flowchart documented, code operates as expected, and code passes unit ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
130 LaheyThe other component of the work activity is the worker portion. The workerportion of a work activity has two parts. The first is the occupational andtechnical knowledge and skills (OTKSs) needed to complete the work, and thesecond is the basic academic and employability (A&E) skills required to do thework. Examples of these would include knowing computer start-up procedures(OTKSs) and being able to reset the computer s time after reading a clock(A&E). Figure 1 thus shows how all the components and parts fit together tocreate one skill up the skill food chain, each category of work (known as a jobconcentration), usually contains between four and eight work activities. Thus,to determine if a person is performing adequately in a specific job concentra-tion, the employer must look at the results of multiple work concentrations are logical groupings of work. Actual job positions withinany organization may overlap one or more job concentrations. Job concentra-tions and actual jobs are closely related, although not the same. The jobpositions are bastardized versions of job concentrations because employersneed to fill voids in their existing employee skill sets that may overlap jobconcentrations. Employers may even combine job concentrations to minimizethe number of total employees needed by the StatisticsNow, with a general understanding of skill standards, we return to the ICTindustry sector and explore its importance. The industry sector s impact on theeconomy, and therefore on national labor markets, is significant. The ICTindustry sector s effect on the American worker will make it clear why theUnited States Government cares about skill ranks in the top two fastest growing and largest industrial sectors in theUnited States economy, swollen by an estimated 230,000 new jobs between1996 and 1999. Over six million workers are currently employed in the industrysector (Kennard, 2000). The growth in overall employment by this industrysector is expected to continue. The effect on the United States economy hasbeen just as significant. Since 1995, the ICT industry sector has accounted forone-third of the real output growth in the United States economy, based uponnumbers from the United States Bureau of Labor ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 131The growth in the size of the industry sector and the effect on the United Stateseconomy of the ICT industry sector is only outpaced by the rate of changewithin the industry sector itself. The number and diversity of new products andservices, the rise and fall of competitors, the introduction and obsolescence oftechnologies, and the fall from exorbitant to rock bottom prices within monthsare all frequent occurrences. Today, a six-month old computer is and acquisitions such as AOL and Time-Warner seem to be odd, thenseem momentarily brilliant, and then seemingly fall apart. These are all examplesof ICT s changing and communications technology is also starting to integrate itselfmore effectively with more traditional industries and vice versa. This trend willcontinue and become more global. The industry sector is redefining itself andattempting to become a part of the mainstream consumer market in the world Factors Behind the ChangeTwo major factors drive changes in the ICT industry sector. Both of these are,in turn, causing important changes in the labor market. Since they impact thelabor markets, they also affect workers. This is where governments begin toexpress concern and a desire to intervene. But first, we will look at the twofactors impacting change in the ICT industry sector and how they affect first factor that impacts the ICT industry sector is technology is advancing at high velocity. This can be measured in two ways:the cost of technology is declining on a steep slope, and the power oftechnology is expanding exponentially. Moore s Law, the power of comput-ing will double every six months, has proven remarkably observers agree that the greatest technological change of recent memoryis the Internet with its underlying infrastructure. Most of us who communicatethrough our email everyday forget that the thing we know as the Internet wasonly in labs and universities 10 years ago. When the power of the Internet iscombined with wide varieties of information through digitization voice, video,and data the possibilities become endless. When information is transmittedfrom one location to another over a common global network, results areCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
132 Laheyprofound. This change not only impacts the ICT industry sector, but it impactsevery other industry sector that utilizes ICT as global Internet network has also revolutionized computers. No longer is apersonal computer a remote island. Today, it is intricately connected to vastnetworks of other computers all over the globe. By connecting to the Internet,the personal computer has become simply one type of gadget that can meet avariety of users information needs. In the past, people had a telephone, apager, an electronic organizer, a fax machine, a laptop computer, and acalculator. They may also have had a variety of other specialty devices for suchthings as gaming or global positioning. But each of these gadgets provided asingle, distinct function. Today, ICT companies are designing informationappliances that package a set of these functions into one device, connecting tothe Internet. At the same time, these multi-function information appliances arebecoming more specialized to meet the information and communication needsof users. The range of technological choices is more often a matter of price andpersonal taste (one for jogging, one for business travel, etc.) than a limitationof the appliance. Thus we see how enormous networking capacity via theInternet and digital information availability in numerous forms have fueled evenmore technological advances that allow people greater access to an expandingvolume of global knowledge in an ever-shrinking world second major factor impacting change in the ICT industry sector isgovernment policy. Telecommunications legislation in 1996 broke down thebarriers to competition in local and long-distance telephone services. Thisallowed firms into the communications industry from such diverse backgroundsas the traditional telephone company to the cable, satellite, and Internetindustries. In 1996, the FCC auctioned the airwaves to these various firms. Theallocation process greatly expanded the capacity for wireless transmission, andhelped fuel and supports the exploding demand for wireless services. The FCChad apportioned and assigned control for the use of transmission space tocommunicate with the world. Wireless subscriptions in the United States grewfrom 13 million in 1993 to over 76 million in 1999 and were projected toincrease to 149 million in 2003. Expressed differently, one in 10 people had awireless phone in 1993, and six in 10 were expected to have a wireless phonein 2003 (Kennard, 2000).To summarize, technological and governmental policy forces together helpexplain why the ICT industry sector is growing and changing so in government policy, increased Internet network capacity, and thedigitization of information have fostered convergence. The differences betweenCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 133computer, telephone, cable TV, Internet service provider, satellite, TV andradio broadcast, and wireless industries are blurring. This is readily seen in theplethora of multi-function computing and communication appliances that arecurrently available in the the information that any firm creates and manages can be distributed overthe Internet to any entity desired. Once, AT&T had the only extensive networkand it carried only analog voice signals. Today, there are many nationwide andglobal networks. They all offer multiple services, including telephony, Internetaccess, paging, television, and other information services. The consumer cannow shop based upon the company s value proposition, which is the sum totalof what a given company provides the consumer through their network increased network capacity that competitors offer in the communicationsmarket is one reason for the steep drop in the cost of services. The increasedcapacity also allows the supplier to provide consumers more services. Anexample of this is the use of phone lines for voicemail access and for access tothe Internet. These are multiple uses for the same network capacity. Thischange has shifted the value that a company offers a customer from the networkitself to the content delivered over the network. This then becomes thecompany s total value proposition to the consumer. Some ICT companies havereacted to this shift in value by acquiring or merging with content providers. Forexample, Cablevision bought Radio City Music Hall, and AOL merged withTime/Warner to expand their content Changes Impact on the LaborMarket and Government ResponseHow does all this change affect the labor market? The traditional premise wasthat government becomes concerned and involved once changes in an industrysector begin to have significant impact on the labor market. When workers aredifficult to place in jobs because of incorrect job skills, then government wantsto identify the right skill sets. It wants to keep entry-level workers offunemployment and welfare rolls. It wants to make sure women and minoritiesare adequately represented in the workforce mix. It wants to be certain thefunding being provided to career and transitional job training programs areCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
134 Laheyproperly preparing people for positions that will provide them a decent salaryand an opportunity to live the American dream. And it wants to make sure theindustries that form the backbone of America s economic power base intechnology do not suffer from a shortage of properly skilled following is a quote from the project that the information and communica-tions technology industry sector conducted with federal government support toestablish a baseline set of skill standards for the ICT industry sector. We willlook at this project in detail throughout this chapter. But let s start by readinga layman s description of the reason the effort was undertaken (Squires, 2002,pp. 4-5): Despite the increasing importance of content to the ICT industry, thecritical enabling technology is still the network. Personal computers,servers, routers, transmission media, and the software that is used tooperate them, comprise networks. Technicians, programmers, andother frontline workers and first-line supervisors, for whom the skillstandards will be created, build, expand, troubleshoot, and maintain thesoftware and hardware that comprises many changes in the ICT industry have changed the technician sjob and the skills and knowledge required to perform it. For example,previously, a cable TV technician simply installed cable televisionservice by connecting a single coaxial cable into a simple, single functionbox that connected to a television. Today, an ICT company offerstelephony, wireless, Internet access, and cable television service. Thetechnician in this company must know all of these services, and thesoftware and technologies that accompany companies that offer multiple services have not succeeded inacquiring or creating a workforce of technicians who are able to install,troubleshoot, and maintain the multiple services offered by the evolvingICT companies. They dispatch, at great cost, multiple technicians toaccomplish the service call that involves multiple services and technicians need more skills and different skills than techniciansof the past did. A customer contact or installation is more complextoday. It involves the connection of a more complex transmissionmedium into a multi-function box. The multi-function box providesInternet access, telephone service, television, and other informationCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 135services, and the technician must troubleshoot all of these servicesincluding the operating system and networking that makes theseservices possible. Skill standards can play a critical role in defining whatthose skills are and establishing certification programs to ensure ICTcompanies have the skilled labor force they need to skill standards will provide many benefits to the multi-service ICTcompanies of the future including: Meet the critical need for qualified technicians to support multiple-service ICT companies. Improve the hiring and evaluation processes for employers. Establish professional development path for employees to keep theirskills current and to expand their skills over time. Allow the educational institutions to coordinate their curriculums moreeffectively. Guide the training investment choices of business. Allow parents and community organizations to participate better indecisions regarding educational priorities and local needs. Advance opportunities for minorities and women. Create portable certifications for a vast number of technicians in ICT. Create a pool of potential candidates to meet the rapid growth in theICT industry. In 1994 with legislation called the National Skill Standards Act, Congresscreated an organization under the Department of Labor to focus efforts aroundthe development and marketing of skill standards for the United Statesworkforce. The mission of the National Skill Standards Board (NSSB) was tosupport the development of a national, world-class system of voluntary skillstandards to enhance the productivity and raise the living standards of theUnited States established a 24-member board of directors with a 15-person officemanaged by an executive director. It was located in Washington, DC, near itsparent agency, the Department of Labor. NSSB s first assignment was todetermine how to address the skill standard challenge. It chose to tackle itslegislative mandate by using a number of Voluntary Partnerships, comprised ofbusiness, education, and labor. Each Voluntary Partnership governed theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
136 Laheydevelopment of skill standards in its specific industry sector aided by technicalexperts for statistical measurement and skill standards next issue addressed was the composition of the Voluntary needed a well-balanced combination of key stakeholders surroundingeach industry sector if the skill standards were to get the proper validation,support, and usage needed to guarantee their success. Each industry sectormight well have a slightly different configuration, so the key was to find large,well-networked stakeholders that played significant roles in each industrysector to speed accomplishment of these objectives. In general though, theVoluntary Partnerships would include business leaders, educators, laborleaders, state officials, and special interest final planning decision that the NSSB had to make was defining the scopeof their mandate. They chose to limit their work to establishing skill standardsfor baseline or entry-level jobs. The NSSB further determined that the skillstandards would be validated using certification testing to prove that individualswho claimed to have acquired the skills had in fact attained the legislation directed that the skill standards efforts were to be voluntary,the NSSB approached various industry sectors that they believed would beprime candidates for this type of activity. One of the significant obstacles thatany interested industry sector faced was its ability to establish the VoluntaryPartnership arrangement necessary to manage and direct the multi-year the large number of frontline worker resources for focus groups andsurveys would be another major issue any industry sector would face. Thatmeans the industry sector had to either wield a great deal of control over theworkforce s daily routine or the industry sector was so negatively affected thatit was willing to overcome whatever obstacles were in the path of success. Twoindustry sectors accepted the challenge; one fell into each category. In the firstcategory was manufacturing. This became the pilot skill standards the help of the unions bringing together literally thousands of frontlineworkers, it proved to be a relatively smooth second was our industry sector, the ICT industry sector. The skill gapmismatch between employer needs and the skills of the applicants was sosevere that the risk for undertaking the endeavor was well worth the ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 137The Information and CommunicationSkill Standards ProjectThe details of the ICT Skill Standards Project follow. It began in 2001 andcontinues today. This is persuasive evidence of the importance the governmentand ICT industry sector place upon making sure business, education, andworkers agree on what accurate, current, and updated skills , the Computing Technology Industry Association, is acting as theproject manager and is the leader of the ICT Voluntary Partnership. Its projectpartners include ITAA (Information Technology Association of America),NWCET (Northwest Center for Emerging Technologies), a team of technicalexperts, and the Department of Labor (NSSB).The ICT Voluntary Partnership has a growing number of members. Thebusiness representation is intended to account for over 40% of the ICT jobs inthe industry sector. Current members include names such as Microsoft, Intel,. West, Cisco, IBM, Verizon, EDS, Compucom, AT&T, Siemens, Xerox,HP, and Novell. Representatives solicited from the education, training, labor,and civic organizations include Prosoft Training, New Horizons, ElementK,Smartforce, NetG, Thompson Courseware, Prometric, VUE, IT CareerConsortium, Technology Workforce Coalition, Urban League, EDC, NWCET,AACC, CREDA, CWA, TAAA, NSF, League of Innovations, SEI, ICCP,IEEE, and detailed work plan has three stages of development activities, followed bya mass validation survey. The work plan was based upon initial summaryresearch conducted by a team of experts. The research question was how toorganize the ICT industry sector jobs into job concentrations for the purposeof grouping the skill standards interview activities. The NSSB s expert reviewpanel, as well as the ICT Voluntary Partnership, approved the initial following assumptions formed the foundation for the proposed ICT SkillStandards research (Squires, 2002, pp. 7-8): A. The NSSB selected the information and communication technologypopulation technician for the development of skill standards in thissector. Programmers with four-year college degrees are not to beincluded in the skill standards research. While these directives areCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
138 Laheyclear, they do not provide a detailed definition for technician nor do theyaddress the question of what to do with programmers who have lessthan a four-year college degree or no college education at term technician is very broad. For the purposes of the skillstandards research, frontline workers through first-level supervisors inICT with less than a four-year degree will be considered technicians. This excludes engineers, systems analysts, software engineers, andmost NSSB selected ICT technicians as the target job for developingskill standards and certification. Technicians were chosen because theymeet the criteria established by the NSSB the technician job is not aprofession, it does not require a four-year college degree, and it is nota management position. In addition, technicians are a critical job clusterin the ICT industry that is growing rapidly and will benefit from skillstandards and certification. The industry will benefit from skill stan-dards because there is a current and projected shortage of technicians,and skill standards will provide a blueprint that educational institutionscan use to develop job-related training programs. The increase intraining programs will make it possible for more people to becometechnicians. Moreover, certification programs are common in thisindustry, and a generic certification is likely to be well are frontline workers who work with the ICT technol-ogy hardware and software that engineers design. They install,troubleshoot, program, monitor, maintain, update, repair, replace, andoperate IT and telecommunications technology such as computers,routers, file servers, PBXs, computer programs, databases, telephonesystems, and microwave equipment. While each sub-industry has itsown type of technician, the research will identify the common work andskills in each concentration. And while technicians may or may not havefour-year college degrees, they do not typically have a four-yearcollege degree in engineering or computer vast majority of supervisors of technicians are former addition to managerial skills, supervisors have the same skills andknowledge as technicians and are often required to step in and work asa ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 139B. Programmers with less than a four-year college degree in this sectorwill be included in this research. According to a 1998 DOL study, 32%of programmers have less than a four-year college degree. Many areself-taught or have certificates from Novell, Microsoft, or a communitycollege, vocational-technical institute, or other educational nature of programmer work has changed. The development of case tools has automated a great deal of programming work. Man-agers make distinctions between high- and low-level programmingwork. The person who performs the higher-level work with a four-yearcollege degree in computer science is a programmer or softwareengineer. These are the programmers who the NSSB excluded from theskill standards research. The two-year technical school graduate or theperson with an MSCD certificate (Microsoft Certified Solutions De-veloper) performs the lower-level programming. These workers shouldnot be excluded from the research. They administer to networks,troubleshoot equipment, and software, and provide help desk services,to name a few of the types of work they skill standards research will provide greater clarity regarding thework performed by programmers, and in particular, junior program-mers. From initial research and discussions with thought leaders, itappears that junior programmers do not do the initial design anddevelopment of larger software applications. They work on existingcode to modify, update, and maintain it. Junior programmers performsome programming for proprietary languages that are part of PBXs,routers, file server administration, etc. Approximately 35% of pro-grammers do not have a computer science degree, but were self-taughtor obtained two-year technical school . For a number of years, the ICT industries were unable to fill skilledpositions. These industries developed vendor-specific certifications,which required the gathering of job analysis, training needs analysis, andcompetency data. Industry members informed this project that, whilethey are not interested in sending subject matter experts to provideinformation they have already gathered, they are quite willing to sharethis information for the development of skill standards, which meetNSSB ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
140 LaheyD. One set of skill standards will be developed for frontline workersthrough first-line supervisors. Distinction between these two groupswill not be made in the standards, since in ICT, first-line supervisors areusually individuals who do frontline work, but who may also performsome team leadership responsibilities. The standards committee conducted the ICT Skill Standards Project in threedistinct stages. The first stage was an industry and literature review. This effortbegan late in the summer of 2001. NSSB assigned the project a team of expertswhich would collect all the known industry materials on job analysis, traininganalysis, and skill analysis data, as well as recruit a group of senior subjectmatter experts (SMEs) from the ICT industry sector to summarize its findingsinto previously agreed-upon skill standards formats. The objective of the initialstage was to establish a preliminary set of critical work functions (CWFs), keyactivities (KAs), and performance indicators (PIs), and identify the SMEs had completed the initial draft skill standards, the second stagebegan. The objective was to have Winter 2002 focus groups analyze and verifythe initial draft critical work functions, key activities, and performance indica-tors, and to fill in any missing gaps. In addition to reviewing the SMEs workfrom the prior autumn, the focus groups were challenged to create a first draftof the taxonomy for occupational and technical knowledge and skills (OTKSs)and to develop an initial list of OTKSs for each category on the taxonomy. Thetarget population for the focus groups was no longer SMEs, but frontlineworkers themselves who matched an elaborate matrix of economic anddemographic criteria that represented the ICT industry sector and its workersin the United final stage of the project will conduct a focus session with industrial andoccupational psychologists using sample work activities developed in StagesOne and Two. Through their review of this material, these experts would thenbe able to utilize their expertise to develop the academic & employability(A&E) knowledge and the A&E phase was progressing using Industrial and OccupationalPsychologist expertise, an extensive national validation survey is undertaken,to confirm the accuracy of the CWF, KA, PI, and OTKS findings. The nationalsurvey would require access to tens of thousands of frontline workers,supervisors, trainers, and SMEs. Their role would be to critique the work that2had been underway for over a ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 141All of the steps in this project may seem elaborate and costly for little apparentreturn. The reason for such an investment of time and energy is not obvious tothose unfamiliar with similar research projects. The main reason for the rigorand accuracy of the sampling and evaluation process is to ensure that these skillstandards are legally defensible in an American court of law. If any companychooses to hire, promote, or fire as a result of these skill standards, thecompany must be in a position to know that the federal government hasdemonstrated due diligence to make sure that the standards are in fact accuraterepresentations of the entire economy. The entire industry sector and the entireminority population must be properly captured in every sample. The statisticsmust be gathered from companies across a representative sample of varioussizes and locations among different primary and non-primary ICT diversity of the individuals involved must be validated. The result is ICTskill standards in which every user of these standards can feel initial job concentration structure developed and approved by NSSB andthe ICT Voluntary Partnership is shown in the diagram on page 142. The jobconcentrations describe work that is performed by technicians in a wide rangeof industries and reflects the rapidly evolving nature of work, including the movetoward digital services, and the merging of industries, including telephony,cable, satellite, system integrators, software developers, Internet serviceproviders, wireless, broadcast radio, and identified sub-industries within the ICT industry sector, along with industrysectors outside of the ICT industry sector which utilize high numbers of ICTworkers, form the foundation for the identification of primary and non-primarytarget companies for the selection matrix to be used in the formulation of focusgroups in Stage Two and the mass validation survey. A research objective isto include participants who represent a cross-section of all these factors, as wellas human diversity definition and verification of the skill standards followed a content-orientedapproach. This type of approach requires that the persons providing theexpertise must have first-hand knowledge of the work to be performed. Thustheir skills are current and relevant to the contemporary work of skill standards involves a thorough understanding of the workprocess. To evaluate the validity of the standards, they must be written in thecontext of the participant. They should be a meaningful and accurate descrip-tion of the important work functions, key activities, knowledge, and skillrequirements identified for the proposed job concentrations. The focus onCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
142 LaheyConcentration Description Networking Development and maintenance of the wired, wireless, or satellite Operations network. Includes Novell, LAN, phone networks, wireless networks, and satellite networks. Use cable, fiber optics, wireless and/or satellite communications to connect users. May work in central offices, data centers, and other central locations that manage networking hub centers. Monitor network performance, traffic and transmission quality, supervise switching, and troubleshoot software and hardware. Document network configuration, and execute backup plans and procedures. Adding users, maintaining security. Install upgrades. Industries: All segments of this sector and all sectors in the economy. Programming Writing and debugging code as directed by supervisor, Software engineers and/or systems analysts. Analyze, design, develop, adapt, test, and maintain computer and Internet-based applications. Use development tools and programming languages in creating and testing the software. Includes software for computer operations, networks, databases, the Internet, and consumers such as HTML, Visual Basic, XML, and high-level languages. Industries: All segments of this sector and all sectors in the economy. Internet Operations Use Web page development software to create or change Web and Maintenance pages, set up server software and hardware, manage the server, and support disaster recovery. Industries: All segments of this sector and all sectors in the economy. Database Design forms databases so users can create data queries and Development and interpret results; manage growth of the database; keep data secure Administration and create security procedures; implement backup and recovery processes; maintain system security and reliability. Industries: All segments of this sector and all sectors in the economy. Field Operations Operations and maintenance of field equipment including cell sites, satellite dishes, phone lines, head ends, etc. Primarily reflects telecommunications, but will include all aspects of telecom. Ensure the field network equipment functions properly. Maintain and troubleshoot facilities including cell sites, satellite dishes, phone lines, customer PBX s network hubs, etc. Industries: Phone, satellite, wireless, cable, and all sectors of the economy. Technical Support Educating users and solving hardware or software operation and application problems. Deal directly with customer issues. Hardware and software installation and configuration. Includes both the help-desk and the on-site technical support. Industries: All segments of this sector and all sectors in the economy. Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 143incumbent workers as the rightful subject matter experts is central to thevalidation one final step to ensure that the skill standards are not obsolete before theyare even published, the reviewers at the end of each stage are asked to bear inmind the skills and knowledge they anticipate will be required over the nextthree years. This dimension of the research will allow the ICT industry sectorthe opportunity to complete one cycle of work before they will need to beginthe process ICT Skill Standards work plan also included a detailed sampling plan forconducting focus groups and the national validation survey. As one of the firststeps in the development of these sampling plans, the measurement andsampling experts on the ICT Skill Standards Project team collected data fromthe Bureau of Labor Statistics and Census Bureau to obtain information aboutthe size and characteristics of the ICT technician population. Due to the rapid changes in the ICT industry, the industries andoccupations tracked by the BLS and Census data are not reflective ofcurrent industries and occupations. For example, telegraph is includedin the BLS occupational list and webmaster is not. These data are notadequate to establish a sampling framework to be used to determinesampling percentages for the concentrations. Therefore the data arereported but not used to determine sample sizes and proportions. Thesampling strategy was guided by the BLS and Census data, but was nota scientific sample . (Squires, 2002, p. 21)The sampling strategy was as follows: The Stage One subject matter expertpanels would use approximately 18 people total, three from each of the six jobconcentration areas. The qualifications to be considered a subject matterexpert included at least five years of experience in the ICT industry sector andcurrent work duties including responsibilities within the job Stage Two focus groups followed the precedent set by the pilot Manufac-turing Skill Standards Project. The focus groups use 30 frontline workers andfirst-level supervisors for each of the six job concentrations. This equates to180 people total, split over four geographic locations. These 180 are furtherdifferentiated by primary versus non-primary in the industry sector, thecompany size, sub-industry, and human diversity constraints imposed upon theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
144 Laheyresearch for legal defensibility purposes. The criteria for participant consider-ation included: Participants must have two years of experience in the specific concentra-tion that they planned to represent. SMEs from Stage One of the projecthad determined that the learning curve for a technician was approximately24 months to become fully functional. This suggested that a techniciancould achieve an acceptable level of competence after two years on thejob. Therefore, the research used this standard as one of the criteria to beconsidered a competent worker. There was no upper limit on theamount of experience a participant could have. Participants must have completed to their employer s satisfaction aprobationary period. Potential focus group members should be regardedby their employers as performing all duties at a competent level, accordingto the standards used by that specific organization to evaluate employeeperformance. The target population is frontline workers who are at the first levels on atechnician career ladder. These workers have at times been referred to as entry-level workers, though the term entry-level is not meant to implyworkers who only recently entered the concentration, as workers mayhave had over two years of tenure in their positions. To clarify who waseligible to participate, workers must have been either: (1) non-supervisoryworkers at the frontline of the work, or they must have had (2) first-levelsupervisory responsibilities and at least one year of experience in a non-supervisory position and spend a minimum of 50% of their workdayperforming the same duties as technicians who had no Stage Three focus groups consist of industrial and occupational (IO)psychologists with expertise in the ICT area. Possible criteria include: At least 10 years of experience performing job analysis and buildingcompetency models. An MS or PhD in Industrial and Occupational Psychology or the SocialSciences/Computer have identified here (see page 145) 17 A&E skills that will be evaluated forpotential inclusion in the portfolio of ICT Skill Standards. The job of the IOCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 145Academic Knowledge and Employability Knowledge and Skills Skills Reading Listening Making decisions and judgments Writing Speaking Organizing and planning Mathematics Using information and Using social skills Science communications Adaptability technology Working in teams Gathering and analyzing Leading others information Building consensus Analyzing and solving Self and career development problems psychology experts is to determine which are appropriate to include and atwhat level of complexity the 17 items are required. This stage of the project iscurrently in key judgments need to be made about the academic and employability(A&E) knowledge and skills: 1. Is a particular academic and employability knowledge and skillneeded to perform a given critical work function? Even though theNSSB list of academic and employability knowledge and skills iswidely applicable, it is still important to find out whether these knowl-edge and skills are needed for the work being described by a particularset of critical work functions. Therefore, one step in the process will beto determine whether or not a given academic or employability knowl-edge and skill is needed to perform a particular critical work . What complexity level is needed? Once it is established that a givenacademic or employability knowledge or skill is needed to perform acritical work function, it is also important to then identify the complexitylevel required. All ratings will be done at the level of the critical workfunction, and raters will rate at the overall skill level rather than the keyactivity level. (Squires, 2002, p. 38)While Stage Three is still in process, the national survey has also begun. Theteam moved into the final verification stages of the project. We anticipate thatthe data is fairly clean by this point in the process, since several significantchanges have occurred throughout the 18-month process. The most notable tothe casual observer is the shift in job concentrations. The original six jobCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
146 LaheyOld Concentrations New Concentrations Networking Operations Network Infrastructure ProgrammingProgrammingInternet Operations and Maintenance Web Development and Administration Database Development and Administration Database Development and Administration Field Operations Technical Support Network Devices Technical Writing Digital Media concentrations are presented, alongside the seven that existed at the start of themass validation survey that began in spring of 2003 (see top of page).The mass validation survey is the most controversial sampling plan yet devel-oped. The sheer scope of the effort is unprecedented. The debate ragesbetween the business practitioners and the statistical purists over sampling number of accurately completed surveys in an ideal situation is 24, includes filling all the necessary coverage gaps for diversity, demograph-ics, sector, and sub-industry variance, and all other related constraints requiredto make the skill standards legally highly defensible in a court of law. The massvalidation survey is underway as this book goes to press, and it presents achallenge to the research team. Whether a compromise figure can be reachedis yet to be determined. But the debate continues as to how many surveys areenough to confirm the validity of the ICT Skill Standards. The only true test willlikely be the first court battle the skill standards will face. But from the detaildescribed in this chapter, it is obvious that they have already been through athorough and rigorous review according to some of the best analysts in the ICTindustry sector. As an employer, you should feel confident that you and yourpeople are using skill information that passes both the scrutiny of your peers andthe validity of the government research States tax dollars paid for the ICT Skill Standards Project. Theinformation is free for anyone s use and is accessible over the Internet in thepublic domain. The owner of these standards is CompTIA, the manager of theVoluntary Partnership and skill standards research project. CompTIA cur-rently has the draft standards available through their TechCareer Compass(TCC) website. Once the ICT Skill Standards attain formal governmentalapproval, they will be updated (if needed) on the TechCareer Compasswebsite. To access the ICT Skill Standards information and other valuabletools, go to the TechCareer Compass website at ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 147The Department of Labor and the ICT industry sector continue their creativeengagement with the challenges discussed here. The agreement that theVoluntary Partnership made with the government before the funding wasapproved stipulated that an ongoing process would be designed. From the verystart, everyone involved realized that the crux of the problem in the ICT industrysector was the velocity of change. The project would produce little benefit if itwas completed and then shelved. The only way skill standards could provideany sustainable value would be if they were updated on a continuous basis. Thegoal of the Voluntary Partnership is to revisit skill standards in the most volatileportions of the industry sector every 18 months. The cycle will be repeated untilsuch time as the ICT industry sector can demonstrate that it has become chapter began with discussing the importance of ICT skills to govern-ments. Our analysis has focused exclusively on the efforts in the United is important to connect back to global concerns. The United States is not inany way the only country or region funding research or training activities aimedat improving the ICT skills of its workforce. Many nations are exploring waysto take advantage of the information revolution. The Internet has made it acommon phenomenon for workers in India to contract with employers inAmerica. Governments around the world want to support their unemployedworkers by providing them with marketable skills. They want their countries tobenefit from the raised living standards a technology-literate society can trend is now toward defining skill standards at the international and regionallevels. There are efforts underway to unite the European, Australian, andAmerican ICT skill standards into a single set. This will allow employers andworkers portability. At the opposite extreme, state and local governments arefurther refining existing skill standards to meet the needs of local workers andemployers. For example, in an area of chip manufacturing where a more uniqueskill set is required to succeed, those skills need emphasis. Yet those skills arenot likely to meet a global skill standard. So those skills that were diluted at ahigher level become more important in local standards. Thus, local job analysisexperts define work activities in chip-related areas so that workers andemployers understand skill portfolio needs based upon localized skill ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
148 LaheyThe information and communications technology industry sector will remainone of the most significant contributors to the world economy in the near governments can afford to neglect that potential. The effect on the labormarket has long-term consequences that no government can afford to key to a government s involvement in the ICT industry sector is knowinghow to properly prepare its workers for jobs. The government needs to knowwhere to place its training and welfare support dollars. Skill standards are oneway to do this. Many government agencies around the globe are working onskill standards projects; and many are very interested in pinpointing, marketing,and updating a valid set of ICT skill standards that can be provided to theirworkers, and their welfare and educational support agencies. Governmentinvolvement in ICT skills standards has the benefit of higher levels of rigor,universal acceptance, and global endorsement that no individual companycould ever hope to establish, no matter how well researched, developed, this chapter the ICT acronym is used often. The reason is thatthe government merges the two industries into one sector for reportingpurposes. Due to increasing convergence between the information tech-nology and communications industries, this nomenclature is now com-monly accepted throughout Europe, Asia, and is gaining widespreadacceptance in the United States as well. It will soon replace IT as theindustry survey is in process today and can be accessed at If you or any per-sons you know may qualify to participate, please consider helping in theeffort to validate the ICT National Skill , . (2000). Telecommunications @ the millennium; the TelecomAct turns four. Washington, DC: Office of Plans and Policy, FederalCommunications ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Government Involvement in Skills Issues 149Meares, ., & Sargent, . (1999). The digital workforce: Buildinginfotech skills at the speed of innovation. Washington, DC: of Commerce, Office of Technology Skill Standards Board. (2000). Built to work. Washington, DC:National Skill Standards , P., & Bailey, T. (2002). Information and communications technol-ogy (ICT) work analysis plan. Washington, DC: National Skill Stan-dards ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
150 TakedaChapter VIIJapanese IT-SkillDilemmaYoko TakedaYokohama National University, JapanAbstractJapanese companies are facing a dilemma regarding their IT many Japanese feel the need to expand the scope of theirinformation systems by implementing newer technologies, they are stillobsessed with the not-made-for-us syndrome. Japanese IS vendorshave been unable to establish a new business model, because the integrationof new and old technologies is not easy. When considering the IT skills inJapanese firms, our attention is primarily focused on the characteristicsof traditional IT skills before focusing on the newly required skills,because the traditional IT skills have developed strong inertia thatprevents change. We will analyze the current situation of the Japanese IT-skill dilemma and discuss methods to resolve ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 151IntroductionJapanese companies are facing a dilemma regarding their IT skills. Althoughmany Japanese feel the need to expand the scope of their information systemsby implementing newer technologies, they are still obsessed with the not-made-for-us syndrome. Japanese IS vendors have been unable to establish anew business model, because the integration of new and old technologies is considering the IT skills in Japanese firms, our attention is primarilyfocused on the characteristics of traditional IT skills before focusing on thenewly required skills, because the traditional IT skills have developed stronginertia that prevents change. We will analyze the current situation of theJapanese IT-skill dilemma and discuss methods to resolve chapter consists of three parts. In the first section, IT Skills of JapaneseCompanies, we will summarize the characteristics of the IT skills in Japanesecompanies. A characteristic of information systems in Japanese companies isthat users are fixated on customized systems. The Japanese IS-vendor industryhas grown in response to the needs of Japanese users to improve and expandproprietary information systems. It has gained the ability to efficiently developcustomized systems through long-term relationships with IS-user main method used for acquiring IT skills in both IS-user and IS-vendorcompanies is in-house training, thus an external labor market and externaleducational institutions such as universities have not grown. The most importantskill for Japanese companies is to play the role of a coordinator between theIS users and the IS division or IS the late 1990s, the protracted recession and the spread of IP technologyfinally required that Japanese companies change their IT skills. Since 2000,government policies have been promoting an increase in engineers acrossvarious specializations and setting the career path for senior engineers whohave advanced technical expertise and diverse work the second section, Japanese IT-Skill Dilemma, a Japanese IT-skilldilemma is discussed. IS-user companies are still obsessed with the not-made-for-us syndrome and prefer customized systems. They seek a supercoordinator who can retain the existing systems and incorporate new technol-ogy to expand operations and simultaneously maintain high performance bycoordinating between IS users and IS departments/vendors. However, it is notpossible for coordinators to facilitate performance improvement across a wideCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
152 Takedascope of operations. Thus, the concept of a super coordinator is merely contrast, traditionally, Japanese IS vendors have built up a business modelcompatible with the needs of the IS-user companies requiring unique custom-ized systems. Even when using packaged software, they have thoroughlycustomized it to suit the needs of customers businesses. Since the late 1990s,IS vendors have been faced with the challenging task of fostering the skills ofengineers in new areas of technology while maintaining the traditional the third section, Beyond Dilemma, we will discuss how we can resolve thisdilemma. The means to overcome this dilemma is to attack the root cause, thelack of progress in restructuring old businesses, and creating new businesseswithin Japanese companies. In addition, companies should promote the in-volvement of top management and the leadership of senior engineers towardsreforming business processes that support the implementation of IT. Mean-while, the speed for acquiring new technology would be rapid if the necessaryskills were clarified, because Japanese companies have the high potential abilityof engineers and users at the bottom Skills of Japanese CompaniesTraditional IT SkillsCharacteristics of Japanese Information SystemsA characteristic of information systems in Japanese companies is that users arefixated on customized systems. The use of packaged software is limited to a1small part of the whole. According to METI s SSSI, which is the mostextensive study on the IS-vendor industry, annual sales have reached yen, approximately US$114 billion at $1 = 120 yen in 2001. An analysisby business type shows that order-made software development servicesconstitute %, packaged software products constitute %, and busi-ness-use packages constitute only % of the total, with almost no change inthis composition ratio during 1998-2001 (Figure 1).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 153Figure 1: Annual Sales of the Japanese IS-Vendor Industry by Business1Type (SSSI)When considering the development and modification of customized systems,Japanese companies information systems are very mature, and developmentproductivity is high. Cusumano and Kemerer (1990) compared the systemdevelopment productivity of Japanese and . firms in the 1980s, and showedthat the productivity of information system development in Japanese firms times that of . firms, with 40% less faults in the year after delivery, andthe code reusability was as high as times that of their . drawback of the information systems in Japanese companies, which insiston using proprietary systems, is the difficulty in incorporating new technologythat changes the system architecture. Many of the mainstream customizedsystems in Japanese firms involve modifications and expansions that have beenincorporated to enable continued use of legacy systems centered on hostcomputers, such as mainframes, that date back more than 20 years. According3to the JIPDEC 2002 study, host computer-based systems constitute %of the new IT investment in Japanese firms. Many of these legacy systems areapplications and systems that have been developed using old programminglanguages such as COBOL on hardware-dependant operating systems. Incontrast, there are relatively few systems that have been developed usinglanguages such as C, C++, and JAVA on open operating systems such asCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
154 TakedaUNIX, Windows, and LINUX. In Japan, % of the companies with five or4more employees and % of the companies with 300 or more employeesuse the Internet primarily for tasks such as sharing documents, email, andgroupware. However, since these older host computer-based networks useunique communication protocols, it is difficult to connect to TCP/IP networks(Tamaniu, 2003).Compared to Japan, the focus in the United States has shifted from customizedsystems to commercial packaged software and system integration incorporat-ing technology developed by external companies. In contrast to the JapaneseIS-vendor industry, whose strength lies in increasing productivity within theframework of existing technology, the American IS-vendor industry is skilledat incorporating foreign innovation and is characterized by its strength inresponding to changes in Japanese IS VendorsThe Japanese IS-vendor industry has grown in response to the needs ofJapanese users to improve and expand proprietary information systems, andhas gained the ability to efficiently develop customized systems through long-term relationships with their IS-user companies. Cusumano (1991) calls thistype of information system development Japan s software factories andascribes the high performance of Japanese IS vendors to a planned economyof scope that is implemented through the standardization of techniques, tools,management, skills, and reusability of source of profits for IS vendors is mainly through the maintenance andoperation support of existing systems than the development of new to a study by JIPDEC in 1999, % of the IT-related expenditurein Japanese companies is used in the operating costs of existing systems, %is used in the maintenance costs of existing systems, whereas only % isdirected toward the development of new systems. It is difficult for engineers toread codes written by other engineers. Therefore, Japanese IS vendors rarelymaintain or support systems that were developed by other companies. Thus,the profits obtained from the lock-in effect are greater than those from actualdevelopment. Even when upgrading or replacing a system, more emphasis islaid on continuation of the existing system than on incorporating the latesttechnology; as a result, there is a high probability of the same vendor companyreceiving the ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 155When considering the IS-user company s perspective, there is also a strongtrend to employ a particular vendor to handle proprietary systems over a longterm, because they tend to be apprehensive of the failure of new vendors inmaintaining and supporting the existing systems. According to a study of IS-6user companies conducted by JISA in 2003, % of the IS-user companiesresponded that they would like to continue using the same vendor for the timebeing, % of the respondents responded that they would like to change themain vendor if possible, % responded that they would like to change a minorvendor, and % responded that they would like to distribute work acrossseveral and Dissemination of IT SkillsThe main method used for acquiring IT skills in both IS-user and IS-vendorcompanies is in-house training. Japanese companies generally have very littlelabor mobility, and this has led to the emphasis of education within Japan, labor shortage during the period of rapid economic growth encour-aged the adoption of internal education, and this high level of internal educationresulted in reduced labor mobility, forming a relationship of mutual reinforce-ment (Koike, 1999). Even in the IS-vendor industry, which should be subjectto major changes in technology and environment, the labor turnover is not veryhigh compared to other traditional industries, particularly in large companies,indicating a relationship of mutual reinforcement with internal education sys-7tems (Umezawa, 2000).The main in-house training method used by companies for IT engineers is on-8the-job training (OJT). In a study by JITEC, a comparison of all trainingmethods revealed that OJT constituted % in IS-user companies, followedby classes with % (Figure 2). In IS-vendor companies, the quantities werereversed with % of the training being OJT and % being , the fact remains that having experienced staff who offer guidance inOJT plays an important role in the dissemination of techniques and a study of IS vendors by Takeda (2003), in response to a question regardingthe frequently used methods to accumulate and disseminate techniques andknowledge in vendor companies, % mentioned individual guidance fromexperienced staff, followed by official technical materials, manuals, anddatabases (%); unofficial memos, etc. (%); and training andeducation systems (%) (Figure 3).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
156 TakedaFigure 2: Main In-House Training Methods Used by Companies for IT8Engineers (JITEC, 2001) (N=411) coursesComputer-based trainingWeb-based trainingOn-the-job (N=185)%10%20%30%40%50%60%70%80%90%100%Figure 3: Methods to Accumulate and Disseminate Techniques andKnowledge in IS-Vendor Companies (Takeda, 2003) (N = 480)Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 157Although internal training may be the focal point, human resource developmentis not necessarily conducted deliberately and systematically in line with themanagement strategy. According to JITEC s study, in response to the questionof whether the development of IT engineers reflected management strategy inIS-user companies, a majority of respondents provided negative answers, % expressing that management strategy is not reflected much and %expressing that it is not reflected. This exhibits the fact that although trainingmay be primarily conducted internally, it is not linked to management strategyin many cases. Moreover, % of the IS-vendor companies and % ofthe IS-user companies responded that one of the problems in the implementa-tion of OJT is that guidance is not being carried out systematically. ITAA(2001) indicates that one of the problems in the United States is that the careerpaths of IT engineers are not shown clearly. JITEC s study highlights the sameproblem in Japan, with % of the IS-user companies and % of the IS-vendor companies not setting career paths for IT (2003) studied the content of stored information and know-how in IS-vendor companies and found that while technical information %, information regarding clients business processes constituted %,information regarding clients needs constituted %, and knowledge onhow to communicate with clients and solve problems constituted %, thusshowing that client-specific information and knowledge was far more promi-nent than purely technical information (Figure 4).Figure 4: Content of Stored Information in IS-Vendor Company (Takeda,2003) (N = 480)Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
158 TakedaThe custom of both IS-user and IS-vendor companies mainly using OJT todisseminate IT skills particular to a certain user company is consistent with thecontinuation and development of existing customized systems. This is charac-teristic of Japanese companies information systems. At the same time, thisstrong trend of internally fostering IT engineers prevents the growth of anexternal labor market and acquisition of IT skills from external institutions, suchas of Skills from External InstitutionsAcademic institutions, such as universities, have not been fulfilling their role ofproviding education for the IT skills required by companies. In many cases, anIT-related academic background is not considered to be an issue whenrecruiting new technical staff, and according to a study on individual IT8engineers conducted by JITEC, % and % of the IT engineersworking in IS-vendor and IS-user companies, respectively, responded thatthey had received no IT education in a part of the internal training carried out after new recruits have joined acompany, it is common for a company to obtain education services from acompany specializing in IT education. The programs provided by theseeducation vendors are general and are focused on areas requiring a limited8scope of knowledge. JITEC s study on education service vendors shows thatthe most common content of IT education is on the knowledge of a particularpackage product (%), followed by component technologies such asoperating systems (%), Web applications (%), and programminglanguages (%). In comparison, however, only a small proportion of thiseducation involves the skills required to create unique systems for usercompanies or skills that integrate advanced knowledge of technologies andexperience, such as consulting/analysis of business processes (%), projectmanagement (%), skills regarding interpersonal relationship (%), andknowledge on business processes (%).Meanwhile, although the complete outsourcing of information systems opera-tions by user companies is gaining considerable attention as a means to obtainexternal skills, it is only being implemented by a small minority. According to9JISA s basic statistical survey, outsourcing services constitute only % ofthe sales in the IS-vendor ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 159CoordinatorsTraditionally, when implementing information systems, the most important rolehas been played by the coordinators who are aware of the users needs andcommunicate these needs to IS vendors or the information systems division inthe user company, while communicating the technical limitations and possibili-ties to the users and the management, and coordinating between them. Thecoordinators mentioned here do not hold an officially recognized post sugges-tive of their role, but are the personnel in IS-vendor companies and IS-usercompanies that effectively carry out the function of coordination. Furthermore,according to the survey on system development and IT implementation projectsconducted by Takeda (2003), this role is often performed by system engineers,sales staff, and programmers in IS-vendor companies, and members of theinformation system departments together with diverse IT and non-IT personnelin the user departments of user companies. Therefore, it is common fornumerous coordinators to work on a single are not necessarily senior engineers who are well-versed in thelatest advanced technology. In many cases, IS-user companies coordinatorsonly need to be able to coordinate communication with IS vendors andprogrammers, which requires no actual technical knowledge. Even coordina-tors in the IS-vendor company may not require knowledge of the latesttechnology since most of the work is centered on the continuous development10of customized systems. In JISA s 2002 survey of IS-user companies, %of the respondents expressed that familiarity with the company s business andoperations was a factor that influenced the IS-user companies selection of IS-vendor companies, while only % listed a high level of technical capabilitiesin the relevant field as a deciding factor. More emphasis is laid on the role ofcoordinators with knowledge of the company s operations than on actualtechnical coordinator also differs from a manager who has authority. In many cases,these roles are performed by staff members who are not in managerialpositions, and managers who execute this role usually have little (2003) shows that the involvement of managers in coordination with thepartner companies was 46% for IS-vendor companies and 24% for IS-usercompanies in the system planning stage, and involvement during systemdevelopment and IT implementation was 21% for IS-vendor companies and18% for IS-user ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
160 TakedaThe skills held by coordinators mainly involve knowledge required for coordi-nation between departments within the company or between IS users and ISvendors. Such knowledge is more difficult to document in writing for thepurpose of accumulating and sharing than technical knowledge, and also tendsto be more company specific and personal. As shown in Figure 3, it is morecommon for knowledge and know-how regarding system development and ITimplementation to be disseminated individually from person to person ratherthan using official documents and education systems. In JISA s 2002 study of11IS-vendor companies, only % of the companies replied that the company sinternal system for utilizing knowledge is functional. Since there has tradition-ally been very little labor mobility in the management environment of Japanesecompanies and changes in mainframe-related technology were mild, personalskills were Required SkillsChange in Environment and TechnologyUntil the 1980s, there was essentially no change in Japanese companies information systems. Although opportunities to revise existing informationsystems were provided through PC-based downsizing and popularization oflocal area networks (LANs), systems carrying out key operations, such asproduction, procurement, and accounting, were handled by existing main-frame-based customized systems, marking a split between these protracted recession that began in the 1990s and the spread of IPtechnology were the factors that necessitated Japanese companies to changethe quality of their information systems. The most important impact of IPtechnology was the sudden expansion of the scope of information systems thatwas brought about by the open standard network connections and could beimplemented with a low initial cost inside companies, between companies, andbetween customers and companies. The protracted recession also strength-ened the pressure to restructure businesses and reduce costs within , the strong economy in the United States during the late 1990salso sent the message that Japanese companies would not be competitive on theinternational front unless they adopted and started using ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 161Public PoliciesJapan s IT-related policies have developed rapidly since 2000. The ITStrategy Headquarters was established by the Cabinet in July 2000. The12country s Basic IT Strategy (e-Japan Strategy) was decided upon in Novem-ber with the passing of the Basic Law on the Formation of an AdvancedInformation and Telecommunications Network Society (IT Basic Law). Thefour priority policy areas of the e-Japan Strategy have been established asfollows: of an ultra-high-speed network infrastructure and compe-tition of electronic of electronic high-quality human resourcesSeveral measures in the area of nurturing high-quality human resources in thee-Japan Strategy are related to elementary IT education targeted at schoolsand adults, and METI has formulated IT-skill standards as a means to establishpractical IT skills required by companies (METI, 2002). The IT-skill standardsclarify and systemize the abilities required for the provision of various IT-related services and aim to provide a useful dictionary for the education andtraining of IT professionals in both the industry and academia. In these IT-skillstandards, IT services are divided into 38 specialist areas in the following 11occupations: marketing, sales, consultant, IT architect, project management,IT specialist, application specialist, customer service, software development,operation, and education with up to seven levels of skills being set for eachspecialist area. For example, the occupation of an IT specialist includes thefollowing six specialist areas: platform, system management, database, net-work, distributed computing, and security. It describes the proficiency of skillsspecific to certain specialist areas in addition to those shared among specialistareas, such as design, technical, integration management, quality management,industry specialty, leadership, communication, and negotiation. Engineers areenvisioned to start with a low level of skill and have a career path that allowsthem to build up a high level of skill while moving through various specialistareas and occupations (Figure 5).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
162 TakedaFigure 5: An Example of a Career Path in the IT-Skill Standards (METI,2002)IT SpecialistLevel 1Level 2Level 3Level 4Level 5Level 6IT ArchitectLevel 4Level 5Level 6Level 7Project Level 3Level 4Level 5Level 6Level 7ManagementApplicationLevel 1Level 2Level 3Level 4Level 5Level 6SpecialistThe post of information technology coordinator, requiring knowledge in bothIT and management, was created for small-medium companies. The trainingand accreditation for obtaining the qualification is conducted by a non-profitorganization, and the government subsidizes small-medium companies that useIT coordinators. As stated above, information technology in both IS-user andIS-vendor companies has been supported by staff who do not have an officialdesignation, yet effectively play the role of a coordinator; however, small-medium companies lack such personnel. This system can be perceived as onethat is created with the assumption that independent consultants will play therole of a coordinator in small-medium , in an attempt to nurture engineers with a particularly high level ofskill, local governments have cooperated with IT vendors such as CiscoSystems, Sun Microsystems, and Oracle to establish the Academy for Ad-vanced Information Technology Professionals (AIP), which is an non-profitorganization. This provides IT engineers and the planning departments of IS-user companies with systematic education in the form of lectures, practicalwork, workshops, and e-learning for advanced knowledge, and skills in bothtechnology and management. Over the next five years, it is planned to nurture3,000 advanced IT engineers, such as top-level engineers, in system develop-ment and system integration, in addition to IT managers in IS-user companies(Nikkei Newspaper, November 3, 2002).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 163These measures share the aspects of increasing the knowledge of engineers invarious specialist areas that support companies use of IT and setting the careerpath for senior engineers that have advanced technical expertise and diversework -User and IS-Vendor Companies CognitionIn public policy, there have been signs of a movement to improve the skills ofspecialist and senior engineers, but what do IS-user and IS-vendor companiesperceive as necessary IT skills?Figure 6 plots the response rates of the skills that are considered strategicallymost important and those considered most lacking in IS-user and IS-vendorcompanies. These skills can be divided into three first group comprises skills that are viewed as being strategically important,but there is a strong sense that they are lacking. These are consulting/analysisof business processes in IS-user and IS-vendor companies and projectmanagement in vendor companies. As shown in Figure 7, the training rate inconsulting/analysis of business processes is low despite its perceived impor-tance. This leads to the observation that such skills are difficult to teach usingeither internal or external training. However, the training rate is relatively highfor project management in IS-vendor companies, suggesting that this skill ismore easily acquired than consulting/ of business processes can be interpreted as referring to ahigh level of knowledge that combines technical expertise, business expertise,and experience. This can be considered to correspond to the type of skillrequired for senior engineers as seen in the human resource developmentstrategy of the public policy. Furthermore, the project management of IS-vendor companies also suggests that steps need to be taken to deal with theincreased complexity of management within development teams when imple-menting such advanced second group comprises skills whose importance is relatively high and thesense of inadequacy is relatively small. In IS-user companies, these skillsinclude knowledge on business processes, system design, and software design/development/testing. In IS-vendor companies, the group covers system designand software design/development/testing. This group is believed to correspondto skills regarding traditional customized systems. Figure 7 suggests that mostof these skills are acquired through OJT or internal training. Conventional skillsCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
164 Takedaare still emphasized, and it is believed that almost all these are carried out usingtraditional third group comprises skills that are viewed to be low in importance, which13includes skills regarding component technologies in each specialist area. Theskills that reflect a low sense of inadequacy are databases, operating systems,EC/ERP/SCM/CRM, programming languages, and knowledge of a particularpackage product. The skills that reflect a medium-high sense of inadequacy arenetwork architecture, information security, and Web application for users. Thetraining rate for all such skills is high, and in many cases training is conductedexternally (Figure 7). The public policy aims to broaden the base of specialistengineers with extensive knowledge of component technologies. However, IS-user and IS-vendor companies lay little emphasis on such skills. In most cases,there is no perception of a severe shortage of personnel with these skillsbecause education can be obtained from an external educator if 6: Skills Considered Strategically Most Important and Most8Lacking for IS-User and IS-Vendor Companies (JITEC, 2001)30Consulting, analysis of business processes (vendor)25Consulting, analysis of business processes (user)Project management (vendor)Group 120Mostlackingskills %15Web application (user)10Interpersonal-relationship skills (vendor)Project management (user)Group 2Group 3Web application (vendor)Interpersonal-relationship skills (user)Knowledge on business processes (user)Knowledge on business processes (vendor)Network architecture (user)5Information security (vendor/user)Network architecture (vendor)System design (user/vendor)Design, programming and test of software (user/vendor)System operation (user/vendor)0051015202530Knowledge of a particular package product,OS, database, EC/ERP/SCM/CRM ,Strategically most important skills %programming language (user/vendor)Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 165Figure 7: Internal and External Training Rates of Each Skill in Both IS-8User and IS-Vendor Companies (JITEC, 2001)60Knowledge of a particular package product (vendor)50Web application (vendor)Programming language (vendor)Database (vendor)Project management (vendor)40Network architecture (vendor)Programming language (user) Interpersonal-relationship skills (vendor)ExternalInformation security (vendor)OS (vendor)training %Web application (user)Database (user)30Network architecture (user)OS (user)Information security (user)Knowledge of a particular package product (user)Consulting, analysis of business processes (vendor)EC, ERP, SCM, CRM (vendor)20EC, ERP, SCM, CRM (user)Design, programming and test of software (vendor)System design (user)System design (vendor)Consulting, analysis of business processes (user)Design, programming and test of software (user)System operation (user/vendor)Project management (user)Knowledge on business processes (vendor)Interpersonal-relationship skills (user)10Knowledge on business processes (user)00102030405060Internal training %Japanese IT-Skill DilemmaOne common point that seems to be shared by IS-user companies, vendorcompanies, and the public policy is the awareness of the need to foster seniorengineers with advanced knowledge that constitutes a combination of technicalexpertise and business expertise. However, the image that IS-user companieshave of senior engineers seems to differ slightly from that held by IS-vendorcompanies and the public 8 uses the data obtained in JISA s 2003 study of IS-user and IS-vendor6,14companies to plot the proportion of responses from IS-user companiesstating that various services will decrease in the future or are not required against the proportion of responses from IS-vendor companies stating that there will be reduced needs or there will be no need for these services. ISusers and IS vendors agree that there will be demand for high value-addedCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
166 TakedaFigure 8: Services that Will Decrease and Will Not Be Required in the6,14Estimation of IS-User and IS-Vendor Companies (JISA, 2003)50Outsourcing of business process45IS outsourcingIT coordinator40Application service provisioningOrder-made system development for manufacturing35Percentage of IS-user companiesCustomization of package softwareestimating that the services "willEvaluation of IT investment30decrease in the future" orHousing/hosting service"will not be required"Consulting of IT implementationOutsourcing of network administration25Management consultingStrategic application solutionsSystem integration20Order-made application system developmentDatabase/information service15Development and sales of package software1050051015202530Percentage of IS-vendor companies estimating that "there will be reduced needs" or "there will be no need"services such as system integration, consulting, and strategic applicationsolutions. It should be noted that although IS-vendor companies rank custom-ized system development highly among the services for which use will decrease,this is one service in which IS-user companies expect a minimal reduction inuse. Customized system development is a traditional method of informationsystem architecture that still has the greatest share of sales, as shown in Figure1. This trend shows no signs of weakening with time. This could be interpretedto suggest that IS-user companies are demanding more advanced solutionswhile continuing to work under the assumption that conventional systems willbe of IS-User CompaniesThe Not-Made-For-Us SyndromeOne of the reasons that IS-user companies still insist upon customized systemsis due to the sunk cost represented by the existing systems. This refers not onlyCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 167to hardware and system development costs, but also the considerable sunk costinvolved in skills regarding system operation and maintenance, and communi-cation between IS vendors and second reason is somewhat psychological, in that many organizationspossess the view that developing a unique information system will lead toincreased competitiveness of the organization. Recent IT developments haveshown that even if each component technology is not unique, it is possible tosufficiently achieve differentiation through their combination, handling, andlinkage with the overall company strategy. However, many Japanese compa-nies have yet to comprehend this change in the nature of third reason is that Japanese companies have the excellent ability toconstruct advanced information systems if they are within the existing limitedscope of business, and there is the problem of not being able to lower presentperformance even if the applicable scope is expanded. This problem tends tobe overlooked, but it is a major factor in Japanese companies use ofinformation 9 shows that there is a trade-off between the expansion of the applicableoperations and the performance improvement of information systems. When anattempt is made to expand the applicable scope with certain cost restraints, thequality of each system is decreased. Technological advances and improvedskills shift the productivity threshold to the upper right. Normally, if the changesFigure 9: Trade-Off Between Applicable Scope and Performance ofInformation SystemsPerformance+A’BA+Applicable scopeCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
168 Takedain the applicable scope of operations are small, only a small shift is required toraise performance (A→A in Figure 9), whereas if the scope of application isexpanded, a large shift (A→B) is required simply to maintain the existingperformance. However, Japanese companies that tend to focus on the amountof performance improvement underestimate the shift from A to B and estimatethat it is possible to handle this expansion using traditional of the Super CoordinatorIt was mentioned above that the pivotal role in implementing informationsystems in Japanese companies has been played by coordinators instead ofmanagers and engineers with a high level of skill. Presently, IS-user companiesperceive an ideal senior engineer as a super coordinator, who is capable ofcoordinating difficult tasks. The super coordinator is expected to preserveexisting systems and incorporate new technology to expand operations whilemaintaining high performance by communicating between the IS-user and IS-vendor companies or between user departments and systems , while coordinators facilitate performance improvement within alimited scope of operations (A → A ), they are not very effective in respondingto a large shift such as A→B in Figure 9 with only personal efforts such ascoordination. Therefore, the concept of a super coordinator is no more than anillusion. Moreover, the skills of a super coordinator are not a mere extensionof the skills of a normal coordinator. They Would Learn Well If Necessary Although there are some differences in perceptions, a shortage of seniorengineers is felt among the public policy, IS-user companies, and IS-vendorcompanies. However, while the public policy is taking active steps to fosterskills in the component technologies for each specialist area, IS-user and IS-vendor companies do not sense a severe shortage of such skills. How shouldthis disjuncture be viewed?It is likely that the public policymakers and strategists in IS-vendor companiesintend to foster engineers to prepare for a shortage of component technologyengineers in each specialist area in the future. However, although IS-usercompanies show no resistance to incorporating new technologies if required,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 169the Japanese economy is the result of many companies that have been unableto meet their requirements because they are still struggling to find direction inthe restructuring of their business. It is possible that the management believesthat specialist engineers of component technologies can be fostered, if re-quired, by having the existing staff acquire the necessary skills. Therefore, thereis presently no sign of a shortage of specialist engineers for componenttechnologies in either IS-user companies or IS-vendor of IS-Vendor CompaniesCustomization of Packaged SoftwareTraditionally, Japanese IS vendors built a business model in which IS-usercompanies required unique customized systems. As explained earlier, thismodel involves locking in customers with a customized system and obtainingprofits in the maintenance and support phase after development has the spread of the Internet in the mid-1990s, the application scope ofinformation systems has rapidly widened. Distributed networks based on PCsand LANs and packaged software such as ERP have been widely used insystems other than traditional IT usage, such as production, procurement, andaccounting the mid-1990s, Japanese companies tended to extensively customizepackaged software and existing technologies (Sakakibara, 1999). Even whenusing packaged software, IS-user companies disliked changing existing pro-cesses and tended to insist upon the unique characteristics of the packaged software to suit the needs of customers businesses wasalso favorable for IS vendors. Having several IS vendors handle the samepackaged software meant that there was a risk that customers could easilychange vendors. However, large-scale customization of packaged softwareprevents to the entry of competitors because it is difficult to change the systemfor other IS vendors. It has a lock-in effect that is nearly equivalent to buildinga customized system from scratch. Therefore, there was no need to move awayfrom the traditional business ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
170 TakedaLimitations of the Customization ModelIn such a manner, the change in the business model of IS vendors waspostponed until the shock that accompanied the spread of the Internet and theprotracted recession of the mid-1990s. IS-user companies need to expand thescope of IT usage while maintaining the existing performance levels undertighter cost vendors are faced with the difficult task of fostering new skills whilemaintaining traditional skills. IS-vendor companies understand that it is impos-sible to achieve these two goals simultaneously. The gap between IS-user andIS-vendor companies shown in Figure 8 demonstrates the dilemma faced byIS-vendor companies with the desire to move away from maintaining existingsystems and their inability to do DilemmaJapanese IT-Skill DilemmaMany Japanese IS-user companies are still obsessed with the not-made-for-us syndrome, despite acknowledging the need to expand the scope of theirinformation systems by implementing new technologies. It is not easy tomaintain traditional skills while obtaining skills in the latest technology andintegrate old and new technologies; as a result, the IS-vendor industry has beenunable to establish a new business model. The public policy is attempting toincrease the supply of engineers who are equipped to handle new technology;however, the demand is not in line with the growth in supply. This inhibits thegrowth of an external labor market, and development of independent consult-ants and outsourcing. Implementation of new technology is not advancingbecause of a lack of external labor market and service companies. Thissummarizes Japan s IT-skill the Root CauseThe only way to overcome this dilemma is to attack the root cause of theproblem the lack of progress in restructuring old businesses and creating newCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 171businesses within Japanese companies. IT usage among Japanese companiestraditionally focused on cutting costs; however, the concept of using IT tocreate new businesses is nonexistent. (Kokuryo & Takeda, 2003). In theMarch 2003 settlement of accounts, Japanese companies managed to secureincreased profits on the whole; however, when viewed in detail, companies thatsecured profit by cutting costs without achieving growth in sales were conspicu-ous (Nihon Keizai Shimbun, June 1, 2003).With respect to IT implementation, when the levels of a company are dividedinto top management, senior engineers, and general engineers/users, the topmanagement faces the maximum problems. In Figure 9, an upward shift is aresult of a force applied from the bottom of the organization, but a horizontalshift along the axis requires strength from the top. At present, top managementin Japanese companies tends to view the implementation of IT as the traditionalshift from A to A , but the shift is actually from A to B, which is impossiblewithout the involvement of top management and integration with , the information systems departments only have a small voice inJapan s IS-user companies. Furthermore, the establishment of a chief informa-tion officer (CIO) in top management to handle information systems was almost15unheard of until recent years. Even in 2002, according to CIO Magazine, % of companies had a full-time CIO. Although % of companies haveCIOs, including those that also hold other posts, only 54% of the CIOs havepast IT experience, and it can be conjectured that there are many CIOs thatonly have responsibility over IT together with other areas and lack second problem is the skill set held by senior engineers. Traditionally, asemphasis has been laid on the role of senior engineers as coordinators betweendepartments and between IS users and vendors, they lack the skills requiredto incorporate and use new technology. Additionally, there is also a lack ofexperience in coordinating interests and taking a position of leadership toimplement bold reforms regarding changes in business processes that accom-pany the implementation of IT. They also lack the authority required to executethese , Japanese companies have a more homogenous and highly edu-cated labor force than their counterparts in other countries. This suggests thatgeneral engineers and users in the bottom tier have potential ability, and thespeed in acquiring new technology would be rapid if they were informed of theskills they need to ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
172 TakedaAccording to a survey conducted by the Japan Institute of Chief Information16 Officers,when decision making of IT implementation is from the bottom up,innovation and overall business performance are not successful; however,cutting costs is successful. This suggests that the mechanism of decision makinghas to be changed at the top management level. As long as the top managementin Japanese companies fails to move forward with restructuring to createbusinesses that produce revenues, there is a possibility that bottom-line policieswill not work Starts Under the Pressure of GlobalCompetitionAlthough the pressure of global competition becomes more severe, a majorityof Japanese companies are struggling to change their business model becausethere is a strong inertia of their traditional business model. However, a type ofdifferentiation has begun in the Japanese economy among a small number ofcompanies that are performing well. The consolidated recurring profit of the top10 companies, excluding financial institutions, has continued to grow annually,and in the fiscal year ending March 31, 2003, their profits reached % ofthe total profits of all listed companies (Nikkei Financial, April 10, 2003). Itis considered that among these companies, many have succeeded in using ITto develop businesses that produce revenues, suggesting that there is a largegap between companies ability to use IT. Using IT to develop new markets andneeds and create innovations is the only way to overcome Japan s (Survey of Selected Service Industries) is conducted every year byMETI (Ministry of Economy, Trade, and Industry) and includes a surveyof the information service industry. The information services compriseinformation processing service, order-made software development ser-vice, (package) software product, assigned system management, data-base service, and research. The number of offices within the informationservice industry was 7,830 in 2002. The IS-vendor industry referred toCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 173in this paper is equivalent to the information service industry in SSSI. does not include the in-house development cost in their (Japan Information Processing Development Corporation) con-ducts a survey regarding usage of information technology among compa-nies. The 2002 survey was conducted across 1,633 companies. Paper of Information and Communications 2003 issued by theMinistry of Public Management, Home Affairs, Posts, and Telecommu-nications. same survey as in Endnote 3 conducted in 1999 (N = 1,043).6JISA (Japan IT Services Industry Association) conducts a survey of largeIS-user companies (N = 354 from planning departments and N = 375from information system departments, in 2003).7According to the 2001 Trend of Wage, Employment, and Hours Workedof Japan, issued by the Ministry of Health, Labor, and Welfare, the annualvoluntary quit rate of full-time workers in the information service andresearch industry that includes the IS-vendor industry was %, whichwas less than % for the service industry, and at approximately thesame level as the rate for all other industries, which was %. The annualturnover rate in the information service and research industry was %,which was less than % for the entire services industry, and % forall other industries. a comparison is made with other countries such as the UnitedStates, the low mobility of labor in the Japanese IS-vendor industry isparticularly striking. For example, the voluntary quit rate in the UnitedStates service sector is % (Job Opening and Labor TurnoverSurvey, April 2002-March 2003, Bureau of Labor Statistics), surpassingthe rate for Japan s service sector by more than 10%. (Japan Information Technology Engineers Examination Center)conducts a survey of IS-user companies, IS-vendor companies, indi-vidual IT engineers, and education vendors regarding education of infor-mation systems. The survey results were 411 IS-user companies, 185 IS-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
174 Takedavendor companies, 1,305 IT engineers, and 48 IS education :// (Japan IT Services Industry Association) s basic statistical surveyis conducted regarding the basic financial situation and labor force of theIS vendors that belong to JISA (538 companies in 2002). The respon-dents of this survey tend to be larger (the average of IS-related sales = billion yen) than that of the SSSI s respondents (the average sales= billion yen). The survey result was 376 in 2002. same survey as in Endnote 6 conducted in 2002 (N = 424 fromplanning departments, 449 information systems departments).11JISA conducts a survey of IS-vendor companies (N = 283 in 2002).12IT Strategic Headquarters. determining the strategically most important skill, specific compo-nent technologies were naturally at a disadvantage, there was no changein the trend of knowledge regarding component technologies, and specificpackage products receiving little emphasis even when the top three skillswere same survey as in Endnote 11 conducted in 2003 (N = 258).15A survey of executives and managers regarding the current status of CIOsin Japanese companies was conducted by IDG, Japan s CIO Magazine,in 2002 (N = 490). Japan Institute of Chief Information Officers conducts a surveyregarding IT management (N = 175) (Utashiro, 2003).ReferencesCusumano, . (1991). Japan s software factories. Oxford , ., & Kemerer, . (1990). A quantitative analysis of Japanese practice and performance in software development. Man-agement Science, 36(11), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Japanese IT-Skill Dilemma 175Information Technology Association of America (ITAA). (2001). When canyou start? Building better information technology skills and , K. (1999). Economics of workforce. City: Toyokeizai. (in Japanese)Kokuryo, J., & Takeda Y. (2003). Value creation on networks and corporateactivities. Proceedings of the International Symposium on ResearchProject Informatics A06 Group, University of Tokyo, Japan, of Economy, Trade, and Industry (METI). (2002). IT Skill Stan-dards version . City: , K. (1999). Managing information technology: The problem ofJapanese firms. National Institute of Science and Technology Policy(NISTEP) Discussion Paper in Y. (2003). Communication between system providers and customersin implementation processes of information technologies. YokohamaJournal of Technology Management Studies, 3 (in Japanese).Tamaniu, H. (2003). Why do Japanese firms lag behind in informationsystems? Proposal of legacy migration. Japan Management Associa-tion (in Japanese).Umezawa, T. (2000). Human resource management of information serviceindustry. Minerva (in Japanese).Utashiro, Y. (2003). Factors of IT management leveraging corporate perfor-mance. Proceedings of the 2003 Spring Conference of Academy ofOrganizational Sciences, pp. 93-96 (in Japanese).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
176 Wong-MingJiChapter VIIIEliminating theWeakest Link:Leveraging HumanCapital with StrategicAlliances inIT Outsourcing SupplyChainsDiana J. Wong-MingJiEastern Michigan University, USAAbstractAs organizations shift from tactical to strategic approaches with IToutsourcing, their human capital portfolios of knowledge, skills,competencies, and organizational capabilities need to be reconfiguredaccordingly. This chapter outlines a model for constructing human capitalportfolios that enable firms to strategically leverage IT outsourcing. Twoorganizational capabilities rational strategic management process andconnective capabilities provide the integrating mechanisms forCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 177competencies from three sub-units that are human resource informationsystems (HRIS), the IS function, and supply chain management. Knowledgeand skills at the individual and sub-unit level enable the development ofcompetencies that are integrated by organizational capabilities. Giventhe dynamic nature of competitive contexts, managers have to reconfiguretheir organizations human capital portfolio to align their firms with theexternal environment. In sum, creating human capital portfolios forstrategic IT outsourcing supply chains requires a multi-level and multi-disciplinary approach to identify and strengthen the weakest strategic IT outsourcing enables firms to operate on the cutting edgecompared to too many on the bleeding edge. The trend for IT outsourcing isgrowing. The IT outsourcing market in North America is expected to grow from$101 billion in 2000 to $160 billion by 2005 (Gartner Inc., cited in Kaplan,2002). The global dimension of outsourcing is even more dynamic with . business-processing jobs predicted to move abroad by 2015 at anaccelerating rate of 30-40% per year for the next five years (Agrawal & Farrell,2003). Although outsourcing is a growing trend, not all firms experiencesuccess with purpose of this chapter is to develop a model for creating human capitalportfolios to strategically leverage IT outsourcing, which systematically elimi-nates the weakest link of the supply chain. The model addresses multipleorganizational levels because creating human capital portfolios for strategic IToutsourcing depends on interrelated knowledge, skills, competencies, andcapabilities from individuals to organizational systems. At the firm level, twoimportant organizational capabilities rational and connective integrate com-petencies from organizational sub-units. Three significant sub-units the ISfunction, HRIS, and supply chain management encompass knowledge andskills from individuals to create competencies within organizational model for creating human capital portfolio provides a means for managersto analyze, evaluate, and align the requisite human capital portfolio to strategi-cally engage in IT capital portfolios should address a range of problems that weakenconnections between client firms, vendors, and contracting employees. Nu-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
178 Wong-MingJimerous researchers and practitioners identified various problems with IToutsourcing, some of which led to the loss of substantial investments amountingto tens or hundreds of millions of dollars. Weak links in IT outsourcing includeoutsourcing inappropriate activities, poor vendor selection processes, inap-propriate vendor selection, unrealistic promises from vendors, inadequatewritten contract, ignoring human resource issues, losing control of outsourcingactivity, overlooking hidden costs, absence of exit strategy from outsourcingcontract, internal resistance and organizational politics between functionalareas, lack of employee preparation, insufficient quality control of vendors,inadequate communication, lack of inter-firm trust and commitment, and lackof managerial competencies to manage outsourcing (Barthelemy, 2003 &2001; Kern, Willcocks, & Heck, 2002; Klepper, 1995). Any one of the abovedifficulties or a combination of them can contribute to diminishing the strategicpotential of IT , the common wisdom prescribed outsourcing peripheral non-coreactivities, regardless of its size or volume, in order to be more focused and approach is a tactical use of outsourcing with the primary goal to reducecosts. However, the shift from tactical to strategic IT outsourcing is growing(Cheon, Grover, & Teng, 1995; Insinga & Werle, 2000; Kimzey & Kurokawa,2002; Lacity & Hirschheim, 1993). McLellan, Marcolin, and Beamish (1995)found that although the financial motivations for outsourcing are an importantpart of the decision, the strategic motivations appear to be increasingly moreimportant. Outsourcing can play both a central and a support role in manystrategic initiatives (p. 318).While IT outsourcing may help achieve financial savings of 10-40% (Kern etal., 2002), becoming strategic with IT outsourcing can build or sustain acompetitive position. Strategic contributions of IT outsourcing come from: re-engineering business processes, developing new business, refocusing on corecompetencies, facilitating mergers and acquisitions, supporting globalization,and minimizing dysfunctional politics of IT innovations (McLellan et al., 1995).Additional benefits of strategic IT outsourcing include access to larger technol-ogy resource pools for innovations, ability for product development beyondinternal resources, reduced cycle time from idea to market, and reduceddevelopment costs. Thus, a strategic approach has important implications forthe IT outsourcing supply strategic frameworks for IT outsourcing provide guidance for manag-ers on the complexities of outsourcing (Cronk & Sharp, 1995; De Looff, 1995;Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 179Insinga & Werle, 2000) and the outlining of important competencies to supportit (Peppard, Lambert, & Edwards, 2000). However, managers grapple withmany problems related to making the necessary organizational change to alignIT outsourcing with the vision and mission of their organizations. Strategic IToutsourcing depends on reconfiguring human capital portfolios to align therelevant organizational competencies and capabilities (Feeny & Wilcocks,1998; Rockart, Earl, & Ross, 1996) along the whole supply chain from clientfirm to vendors to contracting common assumption of outsourcing is that external providers supply the sameor greater human capital and capabilities, but at reduced costs compared tointernal sourcing. But managers often continue with business as usual whenactivities are outsourced without recognizing that broader organization devel-opment and change are necessary to strategically leverage IT organizations initially start outsourcing, pre-existing assumptions, ex-pectations, and practices form the basis for weakening the links between clientfirms, vendors, and contracting employees. The problem is further exacerbatedwith a focus on individual IS competence and skill sets: If we only have the rightset of expertise with the latest IT skills. Without engaging in organizationaldevelopment and organizational change to reconfigure human capital portfoliosbeyond the status quo and individual perspectives, IT outsourcing will not likelyachieve its strategic potential. While there is no one best configuration of humancapital portfolios for all firms, considerations of some key components remainder of the chapter has four sections. First, the model for creatinghuman capital portfolios in IT outsourcing outlines two major organizationalcapabilities that provide integrating mechanisms to strategically leverage thepotential of IT outsourcing. Second, a discussion specifies knowledge andskills from three important sub-units of HRIS, the IS function, and supply chainmanagement that contribute to the development of competencies from individu-als in sub-units. Third, managerial applications of the model for creating humancapital portfolios are discussed. Last, the chapter concludes with potentialapplications of the model to support a strategic approach to IT outsourcing byidentifying and eliminating the weakest ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
180 Wong-MingJiA Model for Creating Human CapitalPortfolios in IT OutsourcingIn general, more rhetoric gets propagated about strategic IT outsourcing thanwhat is actually practiced (Sanders & Premus, 2002). A critical success factorlies in developing the necessary human capital as strategic assets. Otherwise,the value of human capital can erode, be substituted, and/or superseded byhigher order capabilities such as learning to learn (Collis, 1994). Functionalknowledge and skills are important for fulfilling responsibilities at the individualand sub-unit level. But value creation from human capital requires an organiza-tional and interorganizational approach. Collis (1994) explains how organiza-tional capabilities provide strategic insights that enable managers to understandthe intrinsic value of different human capital before rivals do so. The integrationof competencies depends on organizational capabilities (Stalk, Evans, &Schulman, 1992). As a result, strategic IT outsourcing requires organizationalcapabilities that develop human capital for boundary spanning to workcollaboratively across sub-units and model for creating human capital portfolios for strategic IT outsourcing isbased on two classifications of organizational capabilities that provide theintegrative mechanisms to manage the array of specialized human capital fromfunctional areas (see Figure 1). Rational and connective organizational capa-bilities build upon human capital from key areas such as the IS function, humanresource information systems, and supply chain rational capabilities are easily identified with the linear logic in the strategicmanagement process of creating a vision and/or mission, identifying problemsand goals, analyzing internal and external environments, designing strategy, andimplementing a strategic plan. In particular, rational capabilities require orga-nizational sub-units to provide, develop, or acquire the requisite knowledgeand skills for strategic implementation. Many IT outsourcing systems are basedon rational capabilities at the outset, but there are significant weaknesses in themonitoring systems, and evaluation for feedback is even weaker, if they existat , connective organizational capabilities organizational learning,systems integration, relational contracting, and organizational improvisation are mechanisms that involve creative thinking and social capital to developorganization capabilities for collaborative inter-firm relationships. If organiza-tions engage in IT outsourcing for the purpose of reducing costs, managerialCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 181Figure 1: Creating Portfolios of Human Capital for Strategic ITOutsourcing CONNECTIVE ORGANIZATIONAL CAPABILITIES (organizational learning, systems integration, relational contracting, organizational RATIONAL ORGANIZATIONAL improvisation) CAPABILITIES (formulate strategy, design processes and information, define supply resources, develop supply resources, exploit and monitor, develop and implement solutions) Three Dimensions Human Resource Supply Chain of IS/IT Function Information Systems Management KNOWLEDGE KNOWLEDGE KNOWLEDGE SKILLS SKILLS SKILLS COMPETENCIES COMEPTENCIES COMPETENCIES attention to connective organizational capabilities are severely limited. As aresult, the lack of connective organizational capabilities leads to some of theweakest links in IT outsourcing. Compounding the difficulties is that connectiveorganizational capabilities are much harder to capture, understand, and de-velop because of their intangible nature. A key point is that connectiveorganizational capabilities are important complementary strategic assets tosupport the rational Organizational CapabilitiesRational organizational capabilities support a strategic role for IT empirical study by Peppard et al. (2000) identified six macro-competenciesfor generating strategic value from IT resources with a series of supportingmicro-competencies. The six macro-competencies are to formulate strategy,design processes and information, exploit and monitor information use andCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
182 Wong-MingJicosts, define supply resources, develop supply resources, and develop,implement, and operate , formulating strategy relies on the ability to evaluate strategic informationand technology-based opportunities for a business strategy. Part of the processalso involves defining decision-making parameters. This macro-competencebuilds on micro-competencies such as influencing business strategy and maxi-mizing information resources, incorporating technological innovation in thevision, allocating necessary resources, and defining IS/IT policies to implementbusiness , the design processes and information competence translates thebusiness strategy into specific processes and information-based requirementsfor action. The five related micro-competencies are prioritization, aligninginformation with strategy, performance improvement, information innovation,and designing business processes and operations for strategy , the macro-competence of exploit and monitor is based on two micro-competencies. One is exploitation planning to identify and plan information is benefit evaluation with continuous monitoring and evaluation of costsversus , the macro-competence of defining supply resources translates thestrategic vision into long-term information supply resource requirements. Tworelated micro-competencies are: 1) infrastructure design of long-term supplycapabilities to meet future demands, and 2) technology analysis to monitor andunderstand technological advances with the development of appropriatesupporting , the macro-competence of developing supply resources centers oncreating and maintaining information. Five supporting micro-competencies forthis include sourcing and evaluating supply options, developing supplier rela-tionships, maintaining technology standards, creating and maintaining technicalarchitecture, and developing IT technical last macro-competence centers on developing, implementing, and operat-ing solutions. It is supported by seven micro-competencies defining service-level requirements, developing IS/IT application, defining information require-ment, applying technological solutions, implementing systems with new workprocesses, continuing with security planning, and conducting change manage-ment for sum, the six macro-competencies at the organizational level build upon 25micro-competencies to create strategic value from a firm s information re-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 183sources. Empirical evidence supports the importance of linking IT to organiza-tional competitive priorities in order to achieve a competitive advantage(Sanders & Premus, 2002; Willcocks & Lester, 1997). Hence, Peppard et al.(2000) developed a well-grounded framework of rational organizationalcapabilities for IT set of rational capabilities focuses on seven IT management compe-tencies at the organizational level, which comes from an empirical study bySambamurthy and Zmud (1997). The seven major categories of IT manage-ment competencies are business deployment, external networks, line technol-ogy leadership, process adaptiveness, IT planning, IT infrastructure, and datacenter utility. Among the seven major categories, their framework includes 29related specific competencies that overlap with ones identified by Peppard etal. (2000). The similarities among the rational organizational capabilities focuson developing IT resources as a strategic asset. Rational organizationalcapabilities enable managers to evaluate the development of human capital inrelation to the goals and vision of the firm (Willcocks & Lester, 1997). At thesame time, the effectiveness of rational organizational capabilities relies onsupport from connective organizational Organizational CapabilitiesConnective organizational capabilities refer to organizational learning, systemsintegration, relational contracting, and organizational improvisation to enableintegration and alignment of competencies for business strategy implementa-tion. While rational capabilities identify what to do, connective organizationalcapabilities focus on how to do the strategy or the means for sets of organizational capabilities are necessary to facilitate strategic organizational capabilities can only be treated in a cursory fashionwithin the limitations of this chapter. The strategic role of IT outsourcingdepends on connective organizational capabilities to generate the absorptivecapacity and mobilize firm resources with a holistic systems approach. Keymanagerial competencies that help to develop absorptive capacity in organiza-tions include finding, testing, acquiring, and integrating technology from externalsources (Kimzey & Kurokawa, 2002).In order to generate absorptive capacity, numerous researchers address theimportance of organizational learning (Argyris, 1992; Fiol & Lyles, 1985;Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
184 Wong-MingJiRaelin, 2000; Senge, 1990) from partners in strategic alliances (Hamel, 1991;Kogut, 1988; Lyles, 1988; Parkhe, 1991) and do so more competently thantheir rivals. Learning capabilities facilitate organizational adaptation: because learning skills are essential to flexibility, continuous im-provement in quality, efficiency and speed, and to developing newapplications regarding existing operations, technologies, and services. (Tracey & Smith-Doerflein, 2001, p. 100)Related to organizational learning is the organizational capability for systemsintegration across the whole IT outsourcing supply chain. Systems integrationbegins with a governance structure that enables client firms to retain controlover resources whether they are internally or externally sourced (McLellan etal., 1995).An effective governance structure starts with a well-developed contract thatevolves into trusting relationships between partner firms (Ring & Van de Ven,1994). The critical role of trust in strategic alliances cannot be over-empha-sized. An effective governance structure for IT outsourcing supply chainsprevents misunderstandings because explicit discussion of issues helps toestablish a strong foundation for the partnership. Also, governance structurescan be a tool for conflict resolution and contribute toward establishing process for creating a governance structure is important in and of itselfbecause the development of the partnership sets the stage for power dynamics,norm development, and team competencies that are important for systems integration includecontract writing, process management, specification development, tactfulness,buyer-supplier relationship development, and numerous others that are related,generating social capital for effective supply chains that extend to supply chainnetworks. During the life cycle of IT outsourcing, systems integration needs toevolve from formal governance structures toward relational contracting that isless dependent on formal legal regulation of partnership a connective organizational capability, relational contracting establishesintentionally incomplete agreements for maintaining flexible developmentsbetween contracting parties. The goals and objectives are clearly articulatedwhile plans of action are kept somewhat vague (Macneil, 1978; Milgrom &Roberts, 1992).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 185 The property, products, or services jointly developed and exchangedin these transactions entail highly specific investments in ventures thatcannot be fully specified or controlled by the parties in advance of theirexecution. (Ring & Van de Ven, 1992, p. 487)Relational contracting builds upon a complex combination of competenciessuch as product knowledge, production systems, strategic supplier selection,leadership skills, social networking, supplier relations, negotiating skills, con-flict resolution, problem solving, creativity, and stress management. Effectiverelational contracting depends heavily on these various competencies forgenerating trust at the interpersonal, organizational, and interorganizationallevels (Zaheer & Venkatraman, 1995; Jeffries & Reed, 2000).As organizations move down the learning curve with relational contracting, therelated capabilities can be extended into additional strategic alliances. Manag-ers may expand beyond a linear pattern of the IT outsourcing supply chain witha complex array of horizontal and diagonal strategic alliances. As a result, IToutsourcing may evolve as a network of strategic alliances. But the strength andpotential of IT outsourcing supply chain networks depend upon the weakestlink in a portfolio of advanced competencies for relational contracting. Further-more, the portfolio of managerial competencies needs to diffuse organizationallearning beyond the individual firm to its IT outsourcing addition to the connective organizational capabilities of organizationallearning, systems integration, and relational contracting, human capital portfo-lios for strategic IT outsourcing also require organizational improvisational skills are highly developed in the performing arts,both IT and management researchers are slow to understand their importancefor organizational effectiveness. Athletes, musicians, physicians, firefighters,and numerous other professionals hone their skills and accumulate a deepknowledge base to develop improvisational expertise because the nature oftheir work involves non-routine situations within the boundaries of theirprofession. Recently, researchers investigated how firms respond extempora-neously in the moment to unexpected events that take place outside of normalroutine organizational practices (Ciborra, 1999; Miner, Basoff, & Moorman,2001). Standard operating procedures are insufficient to address unforeseendevelopments, especially in situations of IT innovations. Organizational impro-visation is the deliberate and substantive fusion of the design and executionof a novel production (Miner et al., 2001, p. 314). When faced with surprisingsituations, managers make use of both thinking and behavioral responses toCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
186 Wong-MingJicreate a solution based upon intention, intuition, competence, and design(Ciborra, 1999). But improvisation at the organizational level goes beyond anyindividual. Organizational improvisation is not any collective reaction. It isbased on broad organizational routines, cultures, and collective capabilitieswith distinct outsourcing often introduces many surprises to established business prac-tices and routines. Although organizational improvisation has a critical role torespond accordingly in such circumstances, few managers intentionally developthis organizational capability. Given constant change, managers with strongimprovisational skills will likely be more effective performers. In contrast toindividual improvisations, firms require improvisational capabilities acrossfunctional units at an organizational level, and across organizational boundariesin the IT outsourcing supply on organizational improvisation identified important associations withinnovation, learning, entrepreneurship (Miner et al., 2001), organizationalmemory (Moorman & Miner, 1998), power (Silva, 2002), and organizationalchange (Orlikowski, 1996). In order to address weak links in IT outsourcingsupply chains, firms need to deliberately enact three forms of organizationalimprovisation behavioral, artifactual, and interpretive productions (Miner etal., 2001). As firms compete at the cutting edge of management practices,organizational improvisation reinforces the idea that the cutting edge is con-stantly on the four connective organizational capabilities organizational learning, sys-tems integration, relational contracting, and organizational improvisation areinterrelated. An empirical study indicated that organizational improvisation isspecial type of learning that involves real-time, short-term learning to enhanceor detract from other learning processes (Miner et al., 2001). In addition,organizational learning supports the development of organizational improvisa-tion as an explicit organizational capability, especially for innovation. Systemsintegration relies heavily on the ability of relational contracting across organi-zational boundaries in IT outsourcing. At the same time, relational contractingdepends on systems integration to institutionalize and legitimate partnerships tobuild trust in strategic alliances. Relational contracting also involves processesof organizational learning across firm boundaries to develop effective workingrelationships. Hence, systems integration facilitates learning processes acrossthe firm to develop the learning competencies. During the initial phase of normdevelopment, organizational improvisation has an important role to play inrelational contracting by enacting the partnership within the bounds of theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 187organizational system. Developing connective organizational capabilities helpsto pre-empt misunderstandings and problems that easily plague differentaspects of the IT outsourcing supply four connective organizational capabilities do not make up the completelist. Additional connective organizational capabilities such as knowledge man-agement, organizational culture, and change management also merit elabora-tion. But these topics are dealt with extensively in the management and ITliterature. The brief discussion of the four connective organizational capabilitiesoutlined two capabilities that are easily recognizable from the managementliterature and two that are less well known, but appear on the horizon asimportant innovative management key issue about connective organizational capabilities lies in its complemen-tary relationship with rational organizational capabilities. The weakest link inmany IT outsourcing supply chain partnerships is the emphasis on one set oforganizational capabilities, often rational capabilities, while ignoring the criticalrole of the other one. Human capital portfolios for optimizing IT outsourcinghave a complementary balance of rational and connective organizationalcapabilities to effectively integrate competencies from organizational following section highlights important competencies from three sub-unitsthat provide key success factors in implementing strategic IT from Key OrganizationalSub-UnitsThree organizational sub-units in particular, the IS/IT function, HRIS mod-els, and supply chain management contribute important knowledge, skills,and competencies toward building an organization s human capital portfolio(see Table 1). Specialized knowledge and skills that are further honed byexperiences, roles, and organizational processes at the sub-unit or functionallevel support the development of organizational competencies (McGrath,MacMillan, & Venkatraman, 1995). Thus, when organizations become morestrategic with IT outsourcing, existing competencies are not necessarily re-placed as much as they are reconfigured and built upon to support the firm sstrategic process. The following discussion examines competencies arisingfrom the IS/IT ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
188 Wong-MingJiTable 1: Knowledge, Skills, and Competencies for Tactical Approaches toIT Outsourcing 3-D IS Functions HRIS Models Supply Chain Strategies HR Knowledge Logistics Hardware Job Description Specs Product Specifications Knowledge Software Performance Evaluation Quality MIS Procedures HR Regulation Manufacturing Compensation Procedures Suppliers Technical Marketing Interpersonal Programming Recruitment Negotiation Skills Analytical Selection Conflict Resolution Presentation Termination Process Management Interpersonal Negotiating/Bargaining Teamwork Project Management Writing RFPs Decision Making Training Quantitative Vendor Evaluation Contract Writing Strategic Thinking Competencies Business Evaluation Research Competencies Buyer-Supplier Training Expectation/Norm Relationship Development Development Power and Control Change Management Three Dimensions of the IS/IT FunctionDe Looff (1995) provides a comprehensive, three-dimensional framework todescribe the IS function for outsourcing (see Figure 2). The first dimensionaddresses the temporal IS activities that include planning, development,implementation, maintenance, and operation. The second dimension encom-passes the IS components of personnel, procedures, personnel, data, soft-ware, and hardware. The third dimension refers to the firm s business pro-cesses supported by the IS function, which can include human resources,finance, production, etc. For example, IS may support or control the point ofsales to facilitate inventory control and order replacement stock. OutsourcingIS/IT activities should account for the extent of what and how along eachof the three dimensions. IS/IT professionals require technical, interpersonal,and business competencies to work effectively within their unit and acrossdifferent organizational units and/or ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 189Figure 2: Three Dimensions of the IS Function (De Looff, 1995, p. 283) IS Activities - planning - development - implementation - maintenance - operation Information Systems - human resources IS - financial IS - accounts payable process IS - inventory control IS - etc. IS Components - procedures - personnel - data - software - hardware One approach for calculating the firm s value of human capital is to use a ratioof strategic benefits from skill development to the costs of developing skills(Lepak & Snell, 1999), as well as buying them from an outside vendor .,IT outsourcing. IT skills in and of itself requires a set of skills such as technicalabilities, analytical thinking, measurement and evaluation competencies, inter-personal communication, and presentation abilities. Criteria for assessing valuerelate to lowering costs and/or increasing benefits to customers of the organi-zation. As a result, organizations should invest in generating human capitalbased upon expectations of future productivity (Becker, 1964; Tsang,Rumberger, & Levine, 1991) with strategic ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
190 Wong-MingJiWhile a particular perspective of human capital argues for developing andmaintaining core employee skills rather than peripheral ones, empirical researchfindings on current trends in IT outsourcing appear to challenge this prescription(Cheon, Grover & Teng, 1995; Kimzey & Kurokawa, 2002; Storey, Quintas,Taylor, & Fowle, 2002). The shift to greater strategic leveraging of IToutsourcing involves partnering with outside vendors who are responsible forkey functions such as innovations in R& implication for developing IT skills portfolios is determining an appropriatebalance of human capital contributions from internal and external with minimal or no outsourcing experience may want to start withlow-risk tactical IS activities. As firms develop the necessary competencies tomanage outsourcing, a more strategic deployment of IT outsourcing can beleveraged. Currently, there is no clear-cut prescription about outsourcing non-core activities versus core activities. The decision should be contingent on afirm s ability to move down the learning curve with IT outsourcing andorganizational capabilities for learning to learn from strategic alliances firms have IT outsourcing models that often emerge in an ad hoc fashionover time (De Looff, 1995), while other firms make more informed andintentional decisions (Cronk & Sharp, 1995; Insinga & Werle, 2000). Some-times particular IS activities and tasks are already outsourced at the outsetwhen a firm engages in adapting to IT technologies. So managers have differentoptions for IT outsourcing, and the best option is always contingent on thesituation. Attention now turns to summarizing the five different HRIS modelsthat involve different portfolios of human Models for Human Resource Information SystemsHuman resource information system structures describe the relationshipsbetween IT outsourcing partners from client firms to vendors to contractingemployees. In a study of IT outsourcing in a variety of industries, Kosnik andWong-MingJi (2003) identified five major HRIS structural models. They arelocal contracting, HR centralizing, purchasing HR, primary staffing firm, andprimary non-staffing five distinct HRIS models for IT outsourcing are described withimplications for developing human capital portfolios. For organizations en-gaged in making decisions about IT outsourcing, there is increasing demand fora more comprehensive scope concerning the options for IT outsourcingCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 191arrangements and a means to compare the pros and cons of each one. Manyorganizations experienced very expensive lessons along the way as they shiftedfrom one HRIS model to another and/or accumulated multiple models indifferent parts of their organization. Information regarding the pros and cons ofFigure 3: Human Resource Information Systems Supply Chain ModelsLocal Contracting Model Client Hiring Staffing Contract Firm Managers Vendors Employees HR Centralizing Model Client ALL Contract Human Staffing Firm Resources Vendors Employees Purchasing Model Client ALL Contract Purchasing Staffing Firm Vendors Employees Non-Staffing Vendor Model Client NON- ALL Contract Staffing Staffing Firm Vendor Vendors Employees Staffing Vendor Model Client SINGLE ALL Contract Staffing Staffing Firm Vendor Vendors Employees Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
192 Wong-MingJieach HRIS model to support the business strategy is a critical starting point formanagers to begin with in IT outsourcing decisions. The five HRIS models arebriefly outlined below (see Figure 3).Local Contracting ModelLocal contracting is the traditional and most common HRIS model in which anorganization obtains temporary staffing from various staffing vendors to ad-dress absentees, vacation, seasonal variations, and ad hoc projects. Individualhiring managers in a firm work with staffing vendors to make hiring contracting permits a high quality of service from vendors because ofminimal bureaucracy, empowered hiring managers to hire qualified employees,and a relatively good alignment between specific staffing vendors and particularfunctional needs. However, hiring managers are distracted from their primaryresponsibilities in order to deal with numerous staffing vendors who are tryingto increase sales. Also, the firm incurs high costs from a lack of standardizationin hiring practices and procedures, subjective quality issues, high labor costs,and dependence on the capabilities of staffing vendors and contract , not all hiring managers have the requisite HR skills to make thebest decisions related to the HR function. In sum, local contracting is the mostflexible, high-quality, expensive, inefficient, and ineffective HRIS model for CentralizingHR centralizing is the standardization of hiring temporary workers by the HRdepartment to drive down costs. Firms tend to adopt this approach when non-core employees reach a certain ratio of core employees such as 10%. The cut-off point depends on a number of variables related to the firm s competitiveposition and industry dynamics. The advantages of HR centralizing includemore uniform hiring practices, billing rates, and pay rates. Previous hiringmanagers can refocus their attention on their functional responsibilities. HRprofessionals can develop standard criteria for a preferred vendors list. As aresult, firms have greater security regarding the few staffing vendors thatprovide high-quality also need to consider the disadvantages of the HR centralizingmodel. Since the relationship between staffing vendors and hiring manager isCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 193severed, hiring managers experience greater frustration with more mismatchesof temporary contractors to the tasks and related responsibilities. The staffingvendors often skirt around lower margins by loading the requests forproposals (RFPs) with cost plus factors or category jumping in the hiringprocess. Other disadvantages include additional departmental responsibilitiesin HR, which decrease outsourcing efficiencies. The HR centralizing approachtends to evolve into one of a gatekeeper, which is usually tactical andadministrative, rather than strategic. The responsibility creates an unwantedburden for the HR function. HR professionals often treat staffing vendors ascompetitors and threats to the full-time permanent workforce. This results inpolitical conflicts and jockeying between HR and staffing vendors. In addition,gatekeepers in HR usually lack the human capital to effectively manage IToutsourcing responsibilities. Consequently, common outcomes with centraliz-ing of HR outsourcing include some standardization with additional bureau-cratic costs, but are not able to extrapolate the necessary human capital fromnon-core HRIS ModelPurchasing HRIS is the allocation of managing staffing vendors to a firm spurchasing unit. Contract employees are treated in a similar fashion to purchas-ing other raw material inputs of a firm. The model s approach is to reduce costsby increasing efficiencies. The rationale for using purchasing professionals is tomaintain control over hiring by using purchasing competencies for standardiza-tion in hiring practices, pay rates, and bill rates. Client firms often gain a betterunderstanding of their vendors mark-ups and margins to minimize the loadingson the RFPs. Staffing vendors usually provide higher quality and more flexibleservice than other HRIS models because they compete to be listed as apreferred supplier. Staffing vendors strive to include both special skills andvolume disadvantages of a purchasing approach to HRIS stems from a rigidapplication of supply chain management (SCM) techniques to the hiringprocess, and treatment of staffing vendors and contract employees. SCMcontradicts the realities of human capital idiosyncrasies. Purchasing staff oftenlack HR expertise. Client firms also need vendor management system softwareto manage the information flow. The hiring manager and staffing vendorrelationship is severed. The staffing vendors treat client firms as a source account for low margins and send high-quality employees to other firms thatCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
194 Wong-MingJiprovide higher margins. Also, staffing vendors tend to recruit out the higher endtalent away from the client firm. Even though numerous firms use this approach,the purchasing HRIS model provides firms with low value added human , the management information systems function can be responsiblefor the process, which also entails similar advantages and disadvantages to thepurchasing HRIS -Staffing Vendors ModelThe non-staffing vendor model has a non-staffing firm managing the completerange of staffing vendors for a client firm. When the proportion of non-coreemployees grows to a point where earlier HRIS models fail, firms may hire non-staffing vendor management firms to standardize the hiring process and managetheir staffing vendors. In the 1980s, these firms were referred to as managedservices firms, and later, evolved to vendor management systems (VMSs)with the integration of Web-based tools to manage the information flows. Byusing non-staffing vendors, firms can achieve standardization of hiring practicesand bill rates, just-in-time information for vendors and client firms, single-source invoicing and paying, and a single point of contact for hiring for staffing vendors include increased market share and marketpower when others exit the market due to low rates, decreasing errors andomissions, and reduction in contract pay rates. However, the best vendors willnot work with the low pay rate, and non-staffing vendors capabilities tend tobe software firms without HR staffing service a result, the disadvantages of using a non-staffing vendor include severingthe relationship between hiring manager and staffing vendor, a commodityapproach with low touch, lower service quality, and lower competitionbetween vendors. Generally, the human capital from contract employees fromnon-staffing vendors is a lower quality for lower costs, along with increasedmistrust and animosity between contract employees, staffing vendors, clientfirms, and VMS Firm ModelStaffing firm model is based on selecting one staffing vendor to manage all theHRIS outsourcing needs. The goals are to achieve cost reductions and managethe logistics of non-core employees. The advantages of the staffing firm modelCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 195for IT outsourcing include the addition of staffing expertise to the VMS level,improved economic profitability for staffing vendor, and more cooperativepartnerships along the supply chain. In this model the staffing firm often assignsjob orders to its own recruiters before sending them to other vendors. Thereis no staffing vendor competition. The contracted staffing vendor usually cannotfulfill all of a client s needs. As a result, secondary vendors are used to fill thegaps. But secondary vendors tend to send hard-to-place workers. Conse-quently, client firms experience higher turnover, training costs, and lowerquality of service. The implications are that the quality of value added humancapital from contracting employees is lower and animosity is high among five HRIS models local contracting, HR centralizing, purchasing HRIS,vendor management systems, and staffing firm are different structural ar-rangement options for IT outsourcing. Deriving value added human capital fromeach one involves substantial challenges. While the structure of the first threemodels enables client firms to retain greater control, managers need to have therequisite knowledge and skills to effectively handle staffing vendors andcontract employees. Important managerial competencies include negotiatingoptimal contractual terms, monitoring and assessing contract employees,developing trust with vendors, communicating evolving needs, and holdingvendors accountable for poor quality service. The last two models involvelower bureaucratic costs for client organizations, but the quality of service canbe a significant issue. The amount of power and control significantly shifts to theprimary vendor. Managers of the client firm need highly sophisticated inter-firmrelational knowledge and skills to work effectively with vendors becauseminimizing opportunism is critical to extrapolating the benefits and preventinguncontrolled spiraling critical feature of all five HRIS models for IT outsourcing is the importanceof creating healthy collaborative working partnerships throughout the wholesupply chain client firm, vendors, and contract employees. For IT outsourcingto shift from a tactical to a strategic mode, managers in client firms and vendorfirms must develop the necessary soft technologies. This requires a cognitiveshift from a buyer-supplier relationship to one of strategic alliance drawing upon Klepper s (1995) prescription for building such collaborativestrategic IT partnerships, critical human capital capabilities are as follows:1)Client firms and vendors need shared objectives, beliefs, and values. Tobe an attractive IT outsourcing vendor, client firms should also look forcharacteristics that include complementary service capabilities, strongCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
196 Wong-MingJifinancial viability, good management capabilities, and strong reputablestatus to weather difficult times. Managers should conduct a systematiccomprehensive assessment of vendors before contractual negotiations bygathering the information from different managers in the firm that haveexperience with the vendor and from other vendor clients. Thus, knowl-edge base of measurement techniques and research skills to develop datacollection instruments and conduct evaluative analysis are key humancapital competencies for this initial )Communication skills are important throughout the process of IToutsourcing partnership development. Intentional development of a com-munication infrastructure to manage the IT outsourcing partnership helpsto sustain the collaborative process in a long-term relationship. Specificcommunication skills center on being able to effectively bargain ornegotiate and resolve conflicts. Strong communication skills support thegrowth of trust and commitment in IT outsourcing )Clarifying expectations on the part of client firms is critical, which requiresa comprehensive understanding of how the pool of external technologiescan support the organization s strategy. The critical human capital capa-bility at this point is integrating all three critical components expecta-tions, strategy, and technological capabilities. A positive continuous cycleof expressed expectations, fulfilled expectations, trust building, andcycling back with greater expectations sustains an expanding cycle, andhence, the client-vendor relationship. As a result, growing equity andefficiency develop to characterize a healthy strategic alliance, whereinformal relationships begin to supplement the contractual one (Ring &Van de Ven, 1994) in the IT outsourcing supply chain. Unfulfilledexpectations would disrupt the cycle and shift it toward a negativedirection that may lead to the end of the IT outsourcing )Human capital generated from the above three items contributes toanother key process for developing successful IT outsourcing supplychains norm development. Managers in client firms and vendors dependon a common set of norms to guide actions. IT outsourcing can fail withoutadequate norms to create shared expectations of behaviors (Kern &Blois, 2002). Unlike the previously discussed human capital capabilitiesthat individual managers can develop and apply, norm development is acompetency that depends upon the collective parties involved in IToutsourcing relationships where organizational power and politics ofteninfluence the ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 1975)Exercising power and justice is a set of interrelated competencies forstrategic alliances in IT outsourcing partnerships. According to Klepper(1995), the exercise of power has a just or unjust impact depending uponthe balance of benefits accruing to the parties involved. How power isexercised affects the future potential for the relationship to evolve produc-tively or fall apart often with high costs for at least one partner in theprocess. IT outsourcing partners can achieve mutually compatible bal-ance by investing in relationship-specific assets such as technologydevelopment, methods, processes, standards, and firm-specific knowl-edge of the other partners. Judicious application of power with relation-ship-specific assets between the firms contributes to the growth ofincreasing expansion and commitment for leveraging the strategic capa-bilities in IT outsourcing summary, the five HRIS models let managers evaluate what is the mostappropriate scheme for aligning the IT outsourcing supply chain with the firm sstrategy. While a greater amount of power and control reside with the clientfirms in the first three models (local contracting, HR centralizing, and purchasingHR) and with the vendors in the last two models (non-staffing vendors andstaffing vendors), varying portfolios of human capital and skills make it possiblefor partners to maximize negotiating skills are important in the firm s portfolio of human capitalfor all five HRIS models. Negotiating clearly developed contracts helps the firmto not only reduce costs, but also mitigate foreseeable problems. In additional,important professional skills related to HRIS include writing requests forproposals, contract writing, recruiting, selecting, hiring, training, and terminat-ing at an organizational level between client firms and vendors as compared tothe process for a permanent workforce. Some of these skills are comparableto purchasing/supply chain management competencies. The knowledge baseshould include job descriptions and requirements, performance evaluation,human resource regulations, and related HR knowledge. While many HRknowledge and skills are somewhat standard within the human resourcefunction, HR professional competencies need to advance beyond the unit levelto an organizational level in order to build partnerships with vendor firms. Forexample, job descriptions and RFPs become specs for vendors. In anotherinstance, training should include not only developing cross-functional teams andteam-building skills, but also building inter-firm teams to develop strategicalliance partnerships. Competencies from organizational development andCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
198 Wong-MingJichange also have an important role in facilitating a broad perspective forstrategic IT outsourcing partnerships too. The next section draws from supplychain management research to align the HRIS models with the three dimensionsof the IS Chain Management StrategiesSupply chain management focuses on integration to manage the flow of goods,services, and information from initial sourcing and purchasing of raw materialsthrough to production and distribution to the end users. Given constantenvironmental changes, managing supply chains takes place in a context offluctuating uncertainty. Lee (2002) built upon Fisher s (1997) demand uncer-tainty framework to create a 2x2 matrix from low to high supply and demanduncertainty for supply chain strategies. Firms simultaneously face uncertainty atboth ends and require organizational competencies to deal with them at thesame uncertainty refers to the predictability of functional versus innovativeproducts. Uncertainty is relatively greater for innovative products compared tofunctional ones. Examples of functional products are stable goods such as basicfood items, utilities, and gas, while innovative products are rapidly changing likehigh-end computers, fashion apparel, and video games. Supply uncertaintyrefers to stable versus evolving supply base and manufacturing mature industries have established manufacturing technologies andrelatively standard products in place that may undergo only incremental contrast, evolving supply processes are in early developmental stages withrapid juxtaposing the two continuums of supply and demand uncertainties, firmscan use IT capabilities and the Internet to develop supply chain s (2002) framework is illustrated in Figure 4. There are no clear-cut orexact prescriptions for specific alignments between HRIS models and thesupply chain strategies, only broad brush suggestions that are conducive for alogical supply chains have low demand uncertainty with functional productsand low supply uncertainty with stable processes such as steel, grocery, andfood. The goal is to maximize cost efficiencies by maximizing economies ofscale and eliminating non-value added activities. The IT technologies shouldfocus on efficient, accurate, and cost-effective information transmission throughCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 199Figure 4: Supply Chain Management Strategies for Supply and DemandUncertainties (Lee, 2002, p. 108) Demand Uncertainty Low (Functional Products) High (Innovative Products Low Efficient Supply Chains Responsive Supply Chains (Stable Process) Supply Uncertainty High Risk Hedging Supply Chains Agile Supply Chain (Evolving Process) the supply chain. IT capabilities need to support tight and seamless integrationof appropriate alignment of HRIS models and the IS function can supportefficient supply chains. The two HRIS models of HR centralizing and purchas-ing HR provide the potential for standardizing and centralizing human capital forefficient supply chains. Initially, activities of the IS functions for IT outsourcingshould deal with the IS components and collaborate on the IS activities ofplanning, development, and implementation. The maintenance and operation ISactivities need to remain in-house, as well as many of the IS systems, until suchtime that the IT outsourcing relationships develop into a strategic alliancepartnership, at which time risk is lowered to entrust a broader array of activitiesto an external partner. At this point, the client firm gains some experience withvarious vendors to make a more informed ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
200 Wong-MingJiRisk-hedging supply chains have low demand uncertainty with functionalproducts and high supply uncertainty with evolving processes such as season-ality with some food produce or agricultural supplies. Firms can manage thesupply risk by pooling and sharing resources to minimize disruptions. Thecritical IT role is real-time information transparency to support cost-effectivetrans-shipments for all firms that share in the supply outsourcing activities generally focused on a significant portion of ISactivities such as development, implementation, maintenance, and operation,as well as many IS components, because multiple partners need to share in thefinancial responsibilities for risk-hedging supply chains. If most of the ISfunctions remain in-house with one partner, a significant imbalance of powerdevelops, which may damage the strategic alliances. Also, Internet technologycan support multiple sourcing options by establishing the necessary searchsupport capabilities. Particular information systems targeted for outsourcingdepend on each firm s overall business strategy as to what to retain as coreactivities versus what to leverage from external sources. To support ISactivities, firms may use a combination of HRIS models within an organizationto support risk-hedging supply chains, because functional areas such asproductions may be completely outsourced while others such as inventorymanagement are shared with other organizations. R&D and marketing mayremain supply chains face high demand uncertainty from innovativeproducts and low supply uncertainty with stable processes. Firms in thecomputer or pop music industry must deal with such conditions. Being relativelyflexible to effectively respond to changing diverse needs of customers requirescapabilities for mass customization. Often the production process is set up forbuild-to-order. The required IT support must facilitate accurate specificationsof variations in customer requirements, rapid information transfer to productionfacilities, and prompt delivery of the product. Underlying the process, firmsrequire human capital to learn and stay abreast of new most appropriate HRIS models to align with responsive supply chains arelocal contracting, non-staffing vendors, or staffing vendors. Fluctuations indemand with innovative products depend on a flexible workforce that providesa wide spectrum of human capital and quantity of labor. Using contract workersis related to firms with superior levels of innovation (Storey et al., 2002). IToutsourcing plays a critical strategic role in responsive supply chains byproviding access to a greater pool of technology-oriented human IS systems and most IS activities are likely candidates for outsourcing,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 201while the storing of sensitive data regarding IS components are retained in-house with multiple security measures. However, firm size and industrycharacteristics would configure the particular IS functions to outsource andnarrow the selection of the three HRIS supply chains are the most dynamic because they must deal withuncertainties from both ends of supply and demand. Evolving processes ofsupply and innovative products of demand create a volatile situation formanagers. Advanced Internet IT capabilities can support agile supply of such developments can be found with firms such as Cisco,Adaptec, and Xilinx in the semiconductor and computer supply chains are linked to multiple IS functions on all three dimensions components, systems, and activities. HRIS models should be staffing vendorsand non-staffing vendors depending on the particular needs in different func-tions. Many of the IT outsourcing relationships have to develop as strategicalliance partners along the supply chain, otherwise the client firm will not be ableto draw upon the necessary flexibility for configuring a portfolio of humancapital to support volatile changes coming from multiple summary, information technologies and supply chains are integrally intercon-nected, where one would have a difficult time existing without the other. ITprovides supply chains with the basic backbone to acquire, process, andtransmit information. At the same time, development of supply chains demandsmore innovative systems from IT. Hence, a contingent approach with the foursupply chain strategies allows managers to configure the most appropriatealignment of human capital from IT outsourcing and HRIS models for effectiveimplementation of their business strategy. Different supply chains addressvarying levels of uncertainty in supply and demand conditions that firms contendwith in sustaining a competitive chain management professionals identified important skills that contrib-ute to increasing the strategic effectiveness of their function. Giunipero andPearcy (2000) conducted a comprehensive review of key purchasing/supplymanagement skill sets, which found some similarities with additional newrequirements for future professionals. Their research findings indicated thatskills-related strategy, process management, teamwork, decision making,behavioral, negotiating, and quantitative capabilities are important for futurepurchasing/supply management professionals in order to become more strate-gic in managing their responsibilities. The employment of these skills takes placewithin an organizational context with professionals from other functional , the development of particular purchasing and supply managementCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
202 Wong-MingJiskills and competencies for an organization depends on whether they aresourced internally or externally from vendors. The relatively new knowledgeand skills sets for supply chain management overlapped with those needed byIT professionals, especially business skills, change management, and strategicthinking. Thus, within different functions, there is an increased awareness todevelop competencies for strategic , research studies on the IS function, HRIS models, and supply chainmanagement provide managers with directions for building an interdisciplinaryapproach, and cross-functional orientation, to create human capital portfoliosfor IT outsourcing. The competitive landscape is increasingly complex and goesbeyond individual expertise or particular functional perspective. Value addedcontributions from human resources or supply chain management professionalsdepend upon their strategic alignment with other functions in an organizationbecause many of their skills cannot be strategically deployed in , some organizations use cross-functional teams to address complexstrategic issues. IT outsourcing challenges certainly require such an challenge for managers in attracting, sustaining, and reconfiguring humancapital from inside and outside the firm lies in being sufficiently equipped toreconfigure firm resources at a moments Approaches to CreatingHuman Capital PortfoliosIn the future, IT outsourcing will continue to have an important role as morefirms shift from a tactical approach to a strategic one. Being strategic with IToutsourcing involves a radically different managerial mindset from the highestoffice down throughout an organization. A more strategic role for IT outsourcingalso implies that information competencies cannot remain within the purview ofthe IS function or with IT experts, but need to be diffused out into other partsof the organization (Peppard et al., 2000). As a result, value creation comesfrom aligning the firm s internal resources with the changing the various strategic frameworks available for IS/IT functions and IToutsourcing (Cronk & Sharp, 1995; De Looff, 1995; Willcocks & Lester,1997), creating the appropriate human capital portfolio is critical to support theapplication of a strategic orientation (Peppard et al., 2000). Managers requireCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 203a portfolio of human capital that includes competencies from multiple functionalareas and organizational levels for organizational transformations. In order toeliminate the weakest link in IT outsourcing, the first task is to identify wherethe weaknesses lie in the supply chain system. The model for creating humancapital portfolios for IT outsourcing provides managers with a guide to reviewtheir supply chains alignment and balance of multi-level competencies andcapabilities, and to identify where to direct firm resources for strengthening IS function, HRIS models, and supply chain management provide acollection of knowledge, skills, and competencies at the individual and sub-unitlevels for integration by rational and connective organizational many authors recognize that IS/IT professionals tend to be technicallyproficient, competencies related to business, interpersonal, and changeagent skills are weak links in portfolios of human capital (Lee, Trauth, &Farwell, 1995; Markus & Benjamin, 1996). At the same time, managementprofessionals often lag behind in understanding the competitive potential of ITuntil they embark on a journey to learn and apply new information from cost reductions are only entry points into moving down thelearning curve toward strategically leveraging IT capabilities. Hence, as IS/ITprofessionals develop competencies to relate to an organization s businessstrategy, and as managers accumulate experience and insights into using newtechnology, the weak link from different parts of the organization can human capital portfolios also has important implications within theglobal context of IT outsourcing as firms engage in offshoring. Globaldynamics of IT outsourcing supply chains to locations such as India, China, andIreland are certainly important in configuring a portfolio of human have the option to approach the situation from bottom up withaligning fundamental basics of the IS/IT function s hardware and infrastructure,along with the requisite training of partners at multiple locations, or from topdown with finding strategic alliance partners to develop the inter-firm capa-bilities with the requisite organizational to domestic supply chains, managers have to globalize their orga-nizations human capital portfolios to function effectively in multiple geographi-cal and cultural settings. Key factors of the model to address are connectiveorganizational capabilities, IS activities in the IS function, the staffing and non-staffing vendors models for HRIS, and agile supply chains. All these differentcomponents have a highly tacit nature that is relatively more dependent on theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
204 Wong-MingJiability to develop viable connections in human relationships for high perfor-mance. Without the necessary international cultural competencies to bridge thecultural differences between global organizations, strategic IT outsourcing willbe substantially limited by weak links that will be detrimental to expectedoutcomes. Further specifications of the model for creating human capitalportfolios in a global context are beyond the limits of this , developing a strong link between IT outsourcing and business strategyshould advance an organization s competitive capability. If IT outsourcingcontributes as a core competence to sustain a competitive advantage, topmanagement must allocate the necessary support and resources. Additionally,Cohen and Levinthal (1990) stated that firms needed to develop absorptivecapacity to internalize and assimilate external knowledge, especially whenorganizations face special challenges arising from the outsourcing of keyfunctions. As a result, skillful management of IT outsourcing requires firms todevelop the necessary learning capabilities with managerial competencies andorganizational capabilities. Without absorptive capacity to skillfully manage IToutsourcing, firms often find themselves in a quagmire of problems to the pointof where the costs rapidly erode any benefits and possibly reverse the processto are at least two important limitations to note about this chapter. First, thebroad brush approach limits the development of detailed specifications forhuman capital portfolios of strategic IT outsourcing. Second, the discussionnotably omitted critical human capital concerning IT outsourcing in a globalcontext. In the future, the role of international cultural competencies as humancapital in IT outsourcing warrants more developments on the role of human capital in strategic IT outsourcingneed to examine which organizational capabilities and competencies areeffective under different competitive conditions. Innovative leaders reconfigureportfolios of human capital in managing IT outsourcing to align their organiza-tion with environmental changes. Since a substantial portion of organizationalcapabilities for IT outsourcing is tacit in nature, accumulating experience isexpected to provide a competitive edge if firms employ a learning approach. Inaddition, developing metrics to measure the strategic benefits derived fromCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 205different organizational capabilities and competencies would enable managersto continuously monitor and revise their human capital portfolios as competitionrenders them conclusion, this chapter discussed the development of human capitalportfolios for strategic IT outsourcing supply chains that encompass knowl-edge, skills, competencies, and capabilities from different functional areasthrough various organizational levels. An interdisciplinary approach with ISfunction, HRIS, and supply chain management provides important buildingblocks for integration by the rational and connective organizational have a guide to analyze their existing IT outsourcing situation andfocus on eliminating the weakest link. Human capital portfolios are rarelycomplete or perfected because of changing competitive conditions. In re-sponse, managers have to reconfigure human capital portfolios to adapt or,more powerfully, transform the rules of competition. Henceforth, human capitalportfolios for strategic IT outsourcing supply chains remain as compositions ofjust-in-time works in , V., & Farrell, D. (2003). Who wins in offshoring. The McKinseyQuarterly: Global Directions, (4), , C. (1992). On organizational learning. Cambridge, MA: , J. (2001). The hidden costs of IT outsourcing. MIT SloanManagement Review, 42(3), , J. (2003). The seven deadly sins of outsourcing. Academy ofManagement Executive, 17(2), , . (1964). Human capital. New York: Columbia University , ., Grover, V., & Teng, . (1995). Theoretical perspectives onthe outsourcing of information systems. Journal of Information Tech-nology, 10, , . (1999). Notes on improvisation and time in , Management and Information Technologies, 9(2), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
206 Wong-MingJiCohen, ., & Levinthal, . (1990). Absorptive capacity: A new per-spective on learning and innovation. Administrative Science Quarterly,35(1), , . (1994). How valuable are organizational capabilities? StrategicManagement Journal, 15, , J., & Sharp, J. (1995). A framework for deciding what to outsourcein information technology. Journal of Information Technology, 10, Looff, L. (1995). Information systems outsourcing decision making: Aframework, organizational theories and case studies. Journal of Infor-mation Technology, 10, , D., & Wilcocks, L. (1998). Core IS capabilities for exploiting Management Review, 39(3), , ., & Lyles, M. (1985). Organizational learning. Academy of Man-agement Review, 10(4), , M. (1997). What is the right supply chain for your product? HarvardBusiness Review, 75(2), , . & Pearcy, . (2000). World-class purchasing skills: Anempirical investigation. The Journal of Supply Chain Management,36(4), , G. (1991). Competition for competence and inter-partner learningwithin international strategic alliances. -(1) , , ., & Werle, . (2000). Linking outsourcing to business of Management Executive, 14(4), , ., & Reed, R. (2000). Trust and adaptation in relational contract-ing. Academy of Management Review, 25(4), , J. (2002). Outsourcing trends in uncertain times. Business Commu-nication Review, 32(7), , T., & Blois, K. (2002). Norm development in outsourcing of Information Technology, 17, , T., Willcocks, ., & van Heck, E. (2002). The winner s curse in IToutsourcing. California Management Review, 44(2), , ., & Kurokawa, S. (2002). Technology outsourcing in the Japan. Research Technology Management, 45(4), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Eliminating the Weakest Link 207Klepper, R. (1995). The management of partnering development in I/Soutsourcing. Journal of Information Technology, 10, , B. (1988). Joint ventures: Theoretical and empirical Management Journal, 9(4), , T., & Wong-MingJi, . (2003). The romance and nightmare of HRoutsourcing and workforce flexibility. Proceedings of the InternationalHuman Resource Management Conference, Limerick, , M., & Hirschhim, R. (1993). Information systems outsourcing:Myths, metaphors, and realities. Chichester: John Wiley & , ., Trauth, ., & Farwell, D. (1995). Critical skills and knowl-edge requirements of IS professionals: A joint academic/industry investi-gation. MIS Quarterly, 19, , . (2002). Aligning supply chain strategies with product Management Review, 44(3), , ., & Snell, . (1999). The human resource architecture: Towarda theory of human capital allocation and development. Academy ofManagement Review, 24(1), , . (1988). Learning among joint venture sophisticated firms. Man-agement International Review, 28, , . (1978). Contracts: Adjustments of long-term economic relationsunder classical, neoclassical, and relational contract law. NorthwesternUniversity Law Review, 72, , ., & Benjamin, . (1996). Change agentry the next ISfrontier. MIS Quarterly, 20, , ., MacMillan, ., & Venkatraman, S. (1995). Defining anddeveloping competence: A strategic process paradigm. Strategic Man-agement Journal, 16, , K., Marcolin, ., & Beamish, . (1995). Financial andstrategic motivations behind IS outsourcing. Journal of InformationTechnology, 10, , P., & Roberts, J. (1992). Economics, organization, and manage-ment. Englewood Cliffs, NJ: , ., Bassoff, P., & Moorman, C. (2001). Organizational improvisa-tion and learning: A field study. Administrative Science Quarterly,46(2), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
208 Wong-MingJiMoorman, C., & Miner, . (1998). Organizational improvisation andorganizational memory. Academy of Management Review, 23(4), , . (1996). Improvising organizational transformation over time:A situated change perspective. Information Systems Research, 7(1),, A. (1991). Inter-firm diversity, organizational learning, and longevityin global strategic alliances. Journal of International Business Studies,22(3), , J., Lambert, R., & Edwards, C. (2000). Whose job is it anyway?Organizational information competencies for value creation. InformationSystems Journal, 10, , . (2000). Work-based learning: The new frontier of manage-ment development. Upper Saddle River, NJ: , ., & Van de Ven, . (1992). Structuring cooperative relationshipsbetween organizations. Strategic Management Journal, 13(7), , ., & Van de Ven, . (1994). Development processes of coopera-tive interorganizational relationships. Academy of Management Review,19(1), , ., Earl, ., & Ross, . (1996). Eight imperatives for the newIT organization. Sloan Management Review, 38(1), , V., & Zmud, . (1997). At the heart of success: Organiza-tion-wide management competencies. In C. Sauer, . Yetton, &Associates (Eds.), Steps to the future: Fresh thinking on the manage-ment of IT-based organizational transformation (pp. 143-163). SanFrancisco: Jossey , ., & Premus, R. (2002). IT applications in supply chain organi-zations: A link between competitive priorities and organizational of Business Logistics, 23(1), , . (1990). The fifth discipline: The art and practice of thelearning organization. New York: , . (2002). Outsourcing as an improvisation: A case study in LatinAmerica. The Information Society, 18, ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
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210 Anderson, Barrett & SchwagerChapter IXAn Exploration of theValue of InformationSystems Certification:The Perspective of theHuman ResourceProfessional*John E. AndersonEast Carolina University, USAKevin BarrettDixie State College, USAPaul H. SchwagerEast Carolina University, USAAbstractRealizing that human resource (HR) professionals are often the gatekeepersto employment in organizations, this exploratory study examines theperceptions of HR professionals in relation to education, experience, andinformation system (IS) certification. Survey results were obtained fromCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 211approximately 100 HR professionals who are members of local chaptersof the Society for Human Resource Management (SHRM) in North conclude that education, certification, and experience are imperfectsubstitutes for each other. In addition, there seems to be a joint or haloeffect conferred upon a balanced candidate. HR professionals are alsowilling to associate substantial positive organizational benefits withcertification, specifically: enhanced IT staff credibility, competitiveadvantage, level of service, consistency of service provided. HRprofessionals also associate substantial employee benefits withcertifications, specifically: enhanced credibility, preparation for newposition within the current organization, compensation, mobility, preparingfor other certification tests, and meeting a job the current information technology (IT) environment is characterizedby rapid dynamic change, evolution of current technologies, and creation ofnew technologies, the skills portfolios of IT professionals are under constantpressure to develop in parallel. An important way to develop the IT skillsportfolio is certification. While the perspectives of IT professionals and ITmanagers have been studied in the past (CompTIA, 2001), there has been noresearch on the perspective of human resource (HR) professionals toward perspective of the HR professional is important. As the initial gatekeepersthrough which potential employees must pass to attain interviews with ITmanagers, the certification perceptions of HR professionals are worthy of studyin and of themselves. In addition, the perceptions of HR professionals may haveimportant implications for information systems (IS) profession exists when its members are required to obtain requisite training,complete a certification process underpinned with rigorous standards, engagein continuing education, abide by a code of ethics, and submit to sanctions,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
212 Anderson, Barrett & Schwagerincluding loss of certification for malpractice or unprofessional routinely referred to as a profession, the IT field lacks explicit,generally accepted standards for requisite training and certification, a code ofethics, and sanctions for unprofessional behavior (Linderman & Schiano,2001). While profession advocates carry out the painstaking process ofconsensus building, businesses support of and individuals quest for ITcertification proceed at a fevered pace and rival the popularity of certificationprograms in professions such as Accounting, Architecture, Engineering, Finan-cial Planning, Human Resources, Law, Medicine, Military, and so forth. Whilethere is admittedly a lack of generally accepted IT certification standards, thestaying power of IT certification is an important profession -like , the popularity of certifications such as A+, CCNA, CNA, Network+,MCSE, and MOUS (Ray & McCoy, 2000; Noack, 2001) implies that thereis a market for the knowledge base and skills associated with those certifica-tions, and strongly hints that the Academe is not the only place that requisitetraining and continuing education can be some argue that certification is a fad, others argue that certification is hereto stay and will increase in importance because certification: provides anindependent assessment of a professional s knowledge, raises professionalstature, increases the knowledge base of both the individual and the organiza-tion in which the holder works, may provide an alternative to obtaining agraduate degree, may give job applicants an edge, can act as a knowledgerefresher, and may aid employers in narrowing the applicant pool to manage-able numbers (Cohen, 2001).Certification s current popularity is attested to by a number of recent events:1)major Technical-Certification-Expo-2000 and 2002 conferences,2)designation of March 2000 as Certification Month by 32 United Statesstate governors,3)the availability of over 400 business certifications, and4)the increasing frequency of employment ads specifying specific certifica-tion preferences attest to certification s to Adelman (2001), as of the year 2000, about millionindividuals had earned million IT certifications worldwide. Quasi-profes-sions that lack certification are even being enticed to introduce certification tocapitalize on commonly cited benefits (Leonard, 2002):Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 2131)obtain further professional education and development,2)move to a higher level of professional expertise,3)improve career opportunities, and4)enhance credibility by demonstrating mastery of a relevant body ofknowledge (Barry, 2001; Library Administration and Management Asso-ciation, 2002).There also appears to be a growing international interest and participation .-based certification programs (Barber & Brackner, 2001). As the economyevolves, new opportunities arise outside of traditional service areas thatmotivate the need for new certifications to address the often-complex issuesassociated with emerging markets (AICPA, 2000; Braun, Mauldin, & Fischer,2001; Freir, 2001; Gerbitz & Salea, 2001). Unfortunately, in some cases,certification proliferation causes confusion for consumers who are unfamiliarwith a particular certification and the level of its prestige (Braun et al., 2001;Kraus, 1999). To some extent, this confusion syndrome is moderated, as agiven specialization domain matures and convergence is achieved as to whichcertifications provide the greatest utility to individuals and studies have explored the value of certification to certified profession-als and to the business managers that employee certified professionals (AICPA,2000; Barber & Brackner, 2001; Barry, 2001; CompTIA, 2001; Freir, 2001;Hrisak, 2001; Ray & McCoy, 2000; Schroeder & Reichardt, 2001). Profes-sionals earn certifications to improve and assess skills, enhance credibility,improve compensation, increase productivity, open up new career opportuni-ties, and measure training effectiveness. Seventy-six percent of certifiedprofessionals actually realized their certification-benefits expectations(CompTIA, 2001). Business managers cite improved credibility, employeeproductivity, higher level and consistency of service, competitive advantage,and ability to attract and retain highly qualified staff as the key benefits ofcertification. Ninety-two percent of business managers actually realized all ornearly all of their certification-benefits expectations (Ray & McCoy, 2000).While these earlier studies certainly reflect positively on certification, theyoverlook the value of certification to HR professionals. HR professionals aregenerally involved in all phases of the hiring process. They are often involvedin approving position advertisements, screening resumes, and doing initialinterviewing (Mondy, Noe, & Premeaux 1999). IT certifications are oftenindicated in position advertisements, as well as resumes and the interviewCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
214 Anderson, Barrett & Schwagerprocess. With recruitment and selection as basic HR functions, the HRprofessional is often the first barrier that an IT professional will encounter inpursuing employment with a particular organization. As the initial gatekeepersto employment, HR professionals perceptions of IT certification is worthy ofstudy in and of themselves. In addition, those perceptions may have importantimplications for IS the fact that certifications have historically had a negative impact ontheir salaries, many academics have nonetheless obtained certification toaugment their skills. The quest for certification has recently been legitimized andindeed given a compelling mandate by the American Assembly of CollegiateSchools of Business recommendation for greater interaction between acade-micians and practitioners (Marcis & Bland, 2001). There is, however, consid-erable debate as to whether certification has a place in the IS curriculum of four-year educational institutions. One side of the debate employs a generalistargument to make the case for excluding certification from IS curriculums. Thegeneralist argument asserts that the primary mission of most four-year collegesand universities focuses on the development of students critical thinking andanalytical skills, and their appreciation for the arts, diverse cultures, foreignlanguages, the scientific method, and the history and politics of their own andother societies, not community-college-oriented, workforce-development train-ing of vendor-specific certification (Brookshire, 2001). The other side of thedebate uses a value argument to make the case for inclusion of certification inIS curriculums. The value argument focuses on the student, employer, andeducation institution benefits associated with specific student and professorcertification in four major areas: hardware (A+, vendor-neutral), software(MOUS, vendor-specific, Microsoft Office User Specialist), networks (Net-work+, vendor-neutral), and systems design and analysis (MCP-Microsoft-Certified Professional, MCSD-Microsoft-Certified Solution Developer, andMCSE-Microsoft-Certified Systems Engineer, all vendor-specific). Benefitsto students and employers correspond closely to those noted above inconnection with IT professionals and IT managers. From an institutionalperspective, certification provides an assessment tool for evaluating course andprogram content and student competencies, and may contribute to a program svisibility and respect (Ray & McCoy, 2000).Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 215The Value of CertificationSmith and Nagle define value as the objective worth to a customer of satisfyingthe benefits they seek from a product or service. It s the potential level to whichwillingness to pay (WTP) can be raised, and revenue captured . They arguethat while WTP is useful as a concrete value measure, the level and antecedentsof value must be understood to set prices that reflect the real value of a productor service. The first objective of measuring value is to define the value creationsystem and the four or five value drivers that account for the majority of thevalue created for customers (2002).This study is an initial exploratory attempt to understand the value creationsystem and value drivers of IS certification on HR professionals and PurposeWhile the perspectives of IT professionals and IT managers have been studiedin the past, there has been no research on the perspective of the HRprofessionals toward IT certification. The purpose of the present study is toexplore the perspective of the HR professional toward IT certification. Thefollowing objectives were motivated from the literature review and formulatedto accomplish the purpose of this study: the value of IT certification to HR professionals relative toformal education and experience in the hiring decision for IT the organizational benefits of a certified IT staff from theperspective of HR the employee benefits of IT certification from the perspectiveof HR the relative credibility of IT certification as compared to othercertifications in business and industry from the perspective of HR whether HR professionals prefer theory-based education orapplication-based education, and whether certification should be part ofan information systems ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
216 Anderson, Barrett & SchwagerMethodologyDue to the exploratory nature of this study, the perceptions of HR professionalswere solicited with a survey instrument (see Appendix A) that was given tomembers from local chapters of the Society for Human Resource Management(SHRM) in North Carolina. Parts of this survey reflect the design of portionsof the CompTIA survey so that the data generated by HR professionals can becompared to data generated by IT managers and certified professionals(CompTIA, 2001).Presentation and DiscussionSurveys were collect by the presidents of six local North Carolina SHRMchapters at a monthly meeting. Based on the indications of the presidents andthe researchers presence at several of these meetings, it is estimated that theresponse rate is in excess of 30%. From these meetings, 101 usable responseswere obtained from SHRM members. In this section, demographic data willfirst be presented. The results will then be presented in order of the researchquestions 1: Descriptive Statistics for Demographic DataStatisticDemographics N M SD Min. Max. Number of full-time 93 4, 15, 4 85,000 employees currently in organization Years served as a HR 95 0 33 professional Years served in a HR 94 0 32 management position Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 217DemographicsTo determine organizational and respondent characteristics, respondents wereasked to disclose the number of years served as an HR professional and as anHR manager, the number of full-time employees in their organization, and theirorganizational affiliations. Table 1 shows that the average HR professional hasserved as an HR professional for about 12 years and as an HR manager forabout 9 years, and currently works in a medium-sized organization (the rangevalues and standard deviation suggest significant skewing is distorting theaverage employee s data). Figure 1 reveals that approximately 73% of the HRprofessionals (., all but others ) participating in this study are in managerialpositions and thus intimately involved in the hiring of new personnel (for easeof reference, all respondents are now referred to as HR professionals). Thisfinding strengthens the meaningfulness of the HR perceptions that underpin thesubsequent analysis of each of this study s five 1: Job TitleHuman Relations Manager5%HR Recruiting Manager7%HR Manager32%Other HR27%Director/Officer of Human Resources29%Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
218 Anderson, Barrett & SchwagerDiscussion of Research ObjectivesObjective 1: Determine the value of IT certification to the HR professionalrelative to formal education and experience in the hiring decision for an 1 was measured by a set of three scenario questions. Respondentswere asked to indicate the relative percentage weights (summing to 100%) thatthey would assign to education, certification, and experience when making ahiring decision in each of the following scenario contexts (the scenario orderinghas been changed relative to the survey to facilitate discussion):1) Scenario 1: Candidate has no degree but several years of experience. 2) Scenario 2: Candidate has an Associates Degree from a CommunityCollege/Vo-Tech. 3) Scenario 3: Candidate has a Bachelor s Degree from a University. As shown in Figure 2, HR professionals, on average, place about 16% of therelative weight of their hiring decisions for no-degree candidates on education,apparently establishing the lack of a degree as something that has to beFigure 2: Relative Weights Used by HR Manager in Hiring Decision forHiring an IS . (Experience). (Certification). (Education) DegreeAssociates DegreeBachelors DegreeScenario 1Scenario 2Scenario 3Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is Relative Weight
An Exploration of the Value of IS Certification 219explained, compensated for, or replaced by significant experience and mean-ingful certification. In moving to the case of candidates with an AssociatesDegree, HR professionals nearly doubled the relative weight associated witheducation. Clearly, having some sort of degree establishes an importantmilestone in the minds of HR professionals faced with a hiring decision. Pleasenote that the increase in the relative weight of education is subsidized largely bya decreasing emphasis on work experience. As a practical matter, this studydoes not allow us to say how much experience places an Associates Degreecandidate on par with the many years of experience of the no-degreecandidate. However, it appears that relevant experience is highly valued andthat it takes relatively less experience to place an Associates Degree candidateon par with a no-degree the case of a Bachelor s Degree candidate, HR professionals strike aninteresting balance between education and experience, and draw nearly equallyupon certification and experience to strike that balance. The continued strongpresence of each of these components suggests that they are imperfectsubstitutes for each other. That is, each component exerts its own positiveinfluence on the perception formation of HR professionals. The log curvesindicate that each tradeoff component experiences diminishing marginal returnsin moving from the no-degree scenario to the Bachelor s Degree scenario,suggesting the obvious outcome of the desirability of the balanced is, there appears to be a joint or halo effect associated with having all threecomponents adequately represented. Given the progression of educationalachievement from no degree to a four-year Bachelor s Degree, it appears thatadequate education means a four-year degree. Unfortunately, however, thisstudy does not allow us to define what adequate is for purposes of how muchor what type of in-field work experience, or how many or which note the relative flatness of the certification curve, the flattest of the threecurves. Although the weight given to certification does diminish as educationlevel increases, it is slight when compared to the decreased weight given toexperience. Education and experience may be substitutes for each other to apoint. The flat certification curve suggests that certification is a unique part ofthe hiring mix not substitutable by education or experience. The flat certificationcurve further suggests that certification is the least vulnerable to diminishingmarginal returns and thus the best investment alternative, given a Bachelor sDegree and adequate relevant experience, for becoming a more desirable,balanced job ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
220 Anderson, Barrett & SchwagerAlthough more research is needed, the education-certification-experiencedimensions may operationalize as theoretical breadth, technical depth, andpractical 2: Determine the organizational benefits of a certified IT staff fromthe perspective of the HR 2 was measured by a set of nine benefit factors drawn from thesurvey used in CompTIA s 2001 Training and Certification Study (CompTIA,th2001). A 10 factor, ethical conduct, was added on an experimental basis tosee to what extent HR professionals perceive that certification enhances ethicalbehavior, and thus the extent to which IS can be perceived as being more of aprofession. Figure 3 discloses those factors along with HR professionals corresponding perceptions. In general, HR professionals felt that certificationprovides their organizations with at least some benefit for each of the professionals also perceived substantial (substantial was selected as amodifier to communicate the notion that all of the findings are noticeably beyondthe some benefit, ., 5 demarcation) organizational certification benefitsarising from enhanced IT staff credibility (); enhanced competitive advan-tage (); level of service (); consistency of service provided ();Figure 3: HR s Perceived Organizational Benefits of Certified StaffEthical to sell a bigger/broader attract/retain to vendor info/supportHigher level of BenefitSomeghly Beneficial BeneHifitCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 221higher, improved ability to attract and retain staff (); and ability to sellbigger/broader solution (). With regard to ethical conduct, a benefit score of suggests that HR professionals perceive certification as offeringsome benefit in regards to employee ethical conduct. It may be that HRprofessionals perceive that certification activates adherence to an implicit codeof ethics and thus accommodates the perception that the IS profession takeson more profession-like characteristics. Explicit certification-related sanc-tions for unethical behavior would likely strengthen these 3: Determine the employee benefits of IT certification from theperspective of the HR 3 was measured by a set of nine benefit factors drawn fromCompTIA s 2001 Training and Certification Study (CompTIA, 2001). Figure 4discloses those factors along with HR professionals corresponding percep-tions. In general, HR professionals felt that certification would provide theiremployees with at least some benefit for each of the factors. HR professionalsalso perceived substantial (as previously operationalized) employee certifica-tion benefits arising from their enhanced credibility (), preparation for newposition within the current organization (), compensation (), mobilityFigure 4: HR s perceived employee benefits of certificationAccess priority for certification for a new BenefitSome BenefitHighly BeneficialCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
222 Anderson, Barrett & Schwager(), preparing for other certification tests (), and meeting a jobrequirement ().Objective 4: Determine the relative credibility of IT certification as comparedto other certifications in business and industry from the perspective of theHR 4 was examined with three questions that compared the credibilityof IT certification to Accounting, Human Resource, and other industry certifi-cations (., CFP, Series 7, APICS, etc.). Figure 5 reveals that HR profes-sionals view IT certification as having slightly more credibility than those from other industry certifications and their own HR certifications, and roughlyequal credibility with the Accounting profession s CPA certification. Thisfinding is consistent with the findings associated with prior objectives, reflectsHR professionals perceptions that certification helps organizations (if certifiedemployees stay) and employees that certify, and thus makes a meaningfulcontribution to the perception that information systems is a 5: IS Certification Credibility, Compared to Other CertificationsOther Industry Cert (CFP, 7, APICS)HR Cert (PHR/SPHR) Cert (CPA)1234567Equally CredibleMore CredibleLess CredibleCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 223Objective 5: Determine whether HR professionals prefer theory-based edu-cation or application-based education, and whether certification shouldbe part of an IS 5 was evaluated by asking respondents to state the extent to whichthey agreed with two statements:1) A Bachelor s Degree curriculum in Information Systems that producesbreadth of knowledge (., a theoretical foundation) is more valuable thana Bachelor s curriculum that produces depth of knowledge (., technicalor applied skills). 2) Certification courses should be part of the Bachelor s Degree curricu-lum. As noted in Figure 6, HR professionals were very nearly neutral (., ) withregard to Question 1, suggesting that there ought to be a balance betweentheoretical and technical and applied components in IS curriculums. Withregard to Question 2, HR professionals metric (., somewhat agree)seems to indicate that certification may be a meaningful way of introducingdepth to the curriculum and thus striking that 6: Certification in a Four-Year Degree over epthCert part of BS in AgreeStrongly DisagreeCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
224 Anderson, Barrett & SchwagerConclusionThis exploratory study yields a number of interesting insights into HR profes-sionals information systems certification perceptions and the implicationsthose perceptions have for IS curriculums. Based on the findings of this study,we can conclude that certification, education, and experience are imperfectsubstitutes for each other. Thus, each component exerts its own unique,positive influence on HR professionals perception formation. In addition, thereseems to be a joint or halo effect conferred upon a balanced candidate. Therelative weights of the three dimensions in an HR professional s hiring decisionfor a job candidate with a Bachelor s Degree seems to be 40% education, 20%certification, and 40% experience, with education and experience receivingapproximately equal weights, and certification receiving half of the weight ofeducation or experience. In light of their neutrality towards the task of declaringeither a theory-based or a technical/application-based IS curriculum mostdesirable, HR professionals seem to be suggesting that there ought to be abalance between theoretical and technical and applied components in can also conclude that HR professionals are willing to associate substantialpositive organizational benefits with certification, specifically: enhanced IT staffcredibility, competitive advantage, level of service, and consistency of serviceprovided. HR professionals also associate substantial employee benefits withcertifications, specifically: enhanced credibility, preparation for new positionwithin the current organization, compensation, mobility, preparing for othercertification tests, and meeting a job requirement. Finally, HR professionalsview IT certification as having about the same level of credibility as certifica-tions from other business service ResearchExploratory research is valuable as a preliminary procedure for constructdefinition and hypothesis development. This study, as an initial exploratoryattempt to understand the value creation system and value drivers of IScertification on HR professionals hiring decisions, has found value as the firststep in constructing the conceptual framework for future research on the valueCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 225Figure 7: Framework for Future Degree40% Degree s s DegreeHR Manager s Hiring Decision20%CertificationWillingness to Pay Staff Credibility(WTP) Advantage Level of of Staff s Neutral vsProprietary40%Experienceof IS certifications. A next step is to develop and test hypotheses using ameasurable construct such as customer willingness to pursue (WTP), as seenin Figure 7. The use of willingness to pursue, in place of the willingness to payconstruct, is used in this model because of the HR professional s gatekeeperrole in the process. Once the HR professional has determined the merits of theindividual applicant, the applicant will be pursued via other research possibilities include looking as the influence of a Master sDegree and internships upon the value of IS certification, the influence ofoutsourcing either the HR or the IS function on the value of certification, andthe influence of HR professional education in reference to the differing levelsand type of IS certifications on the value of *An early draft of this chapter was presented at the Americas Confer-ence on Information Systems, AMCIS, Dallas, Texas, August ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
226 Anderson, Barrett & SchwagerReferencesAdelman, C. (2001). The medieval guild in cyberclothes: International dimen-sions of industry certification in information technology. Tertiary Educa-tion and Management, 7(3), (2000). IT credential to help CPAs make business sense out oftechnology. Journal of Accountancy, (July), , ., & Brackner, . (2001). Certification. Strategic Finance,(September) , . (2001). Certification, is it worth the price? Library Journal,(February), , R., Mauldin, S., & Fischer, . (2001). The CFE designation inperspective. The CPA Journal, (April), , . (2001). Information technology certification: Is this yourmission? Information and Technology, Learning, and PerformanceJournal, 18(2), , D. (2001). Is certification in your future? HR Magazine, (June), . (2001, November 15). 2001 Training & Certification online at: , . (2001). Certification corner: Certification statistics and demo-graphics. Cost Engineering, 43(8), , K., & Salea, . Market research: Data suggest demand for globalbusiness credential skills. Journal of Accountancy, (September), , . (2001). Global challenges call for more CMAs and Finance, (June), , . (1999). Certification improvement thanks to peer review. CostEngineering, 41(4), , B. (2002). A brief history of HRCI. HR Magazine, (March 14).Available online at: Administration and Management Association. (2002, March 12).Certified Public Library Administrator (CPLA) Certification Pro-gram Overview. Available online at: ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 227Linderman, ., & Schiano, . (2001). Information ethics in a responsibil-ity vacuum. The Data Base for Advances in Information Systems,32(1), , ., Noe, ., & Premeaux, . (1999). Human resourcethmanagement (4 ed.). Upper Saddle River, NJ: , ., & Bland, . (2001). The value of professional certificationsin academe. Atlantic Economic Journal, 29(1), , D. (2001). Certification mystification. Link-Up, 18(5), , ., & McCoy, R. (2000). Why certification in information systems?Information and Technology, Learning, and Performance Journal,18(1), , ., & Reichardt, E. (2001). IMA 2000 salary guide. StrategicFinance, (June), , G., & Nagle, T. (2002). How much are customers willing to pay?Marketing Research, (Winter), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
228 Anderson, Barrett & SchwagerAppendix A: The SurveyInformation SURVEY Systems Certification This survey is part of a study concerning the benefits of information systems (IS) certification and the implications those benefits have for curriculum design. Please respond to all applicable questions. Your individual responses will be completely anonymous, treated confidentially, and used in summary form only. Thank you for your support. Balancing Trade-offs in the Hiring of an InformationSystems ProfessionalFor questions 1 through 3, please indicate the relative weights that you woulduse to make a hiring decision for an IS professional:1. Scenario 1: Candidate has an Associates Degree from a Community College/Vo-TechEducation _____% + Certification _____% + Experience _____% = 100%2. Scenario 2: Candidate has a Bachelor s Degree from a UniversityEducation _____% + Certification _____% + Experience _____% = 100%3. Scenario 3: Candidate has no degree but several years of _____% + Certification _____% + Experience _____% = 100%Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 229Organizational Benefits of Certified StaffFor questions 1 through 10, please indicate the extent to which you feel eachof the designated items is an organizational benefit of certification using thefollowing scale:No Some Highly Benefit Benefit Beneficial 1. Increased productivity/tasks completed quicker................................................... 1 2 3 4 5 6 7 2. Competitive advantage......................................................................................... 1 2 3 4 5 6 7 3. Higher level of service.......................................................................................... 1 2 3 4 5 6 7 4. Access to vendor information/support.................................................................. 1 2 3 4 5 6 7 5. Helps attract/retain staff....................................................................................... 1 2 3 4 5 6 7 6. Lower costs.......................................................................................................... 1 2 3 4 5 6 7 7. Ability to sell a bigger/broader solution................................................................. 1 2 3 4 5 6 7 8. Credibility............................................................................................................. 1 2 3 4 5 6 7 9. Consistency.......................................................................................................... 1 2 3 4 5 6 7 10. Ethical conduct................................................................................................... 1 2 3 4 5 6 7 Employee Benefits of CertificationFor questions 1 through 9, please indicate the extent to which you feel each ofthe designated items is an employee benefit of certification using the followingscale:No Some Highly Benefit Benefit Beneficial 1. Increase compensation........................................................................................ 1 2 3 4 5 6 7 2. Increase productivity............................................................................................ 1 2 3 4 5 6 7 3. Job security.......................................................................................................... 1 2 3 4 5 6 7 4. Prepare for a new position/responsibility.............................................................. 1 2 3 4 5 6 7 5. Switch jobs........................................................................................................... 1 2 3 4 5 6 7 6. Increase credibility............................................................................................... 1 2 3 4 5 6 7 7. Prepare for certification test................................................................................. 1 2 3 4 5 6 7 8. Job requirement................................................................................................... 1 2 3 4 5 6 7 9. Access priority support......................................................................................... 1 2 3 4 5 6 7 Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
230 Anderson, Barrett & SchwagerCertification CredibilityFor questions 1 through 3, please indicate the extent to which you feelinformation systems certification has comparable credibility to the designatedcertifications using the following scale:Less Equally More Credible Credible Credible 1. Accounting certifications: ex. CPA (Certified Public Accountant)......................... 1 2 3 4 5 6 7 2. HR certifications: ex. PHR/SPHR (Senior/Professional in Human Resources).... 1 2 3 4 5 6 7 3. Other industry certifications (CFP, Series 7, APICS, etc.).................................... 1 2 3 4 5 6 7 Certification in a Four-Year Degree ProgramFor questions 1 and 2, please indicate the extent to which you are in agreementwith the indicated proposition using the following scale:Strongly Neutral Strongly Disagree Agree 1. Certification courses should be part of the Bachelor s Degree curriculum in Information Systems .... 1 2 3 4 5 6 7 2. A Bachelor s Degree curriculum in Information Systems that produces breadth of knowledge (., a theoretical foundation) is more valuable than a Bachelor s curriculum that produces depth of knowledge (., technical or applied skills) ... 1 2 3 4 5 6 7 CommentsPlease provide any comments that you feel would be helpful to this ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
An Exploration of the Value of IS Certification 231Background many years have you served as a human resources professional? many years have you served in a human resources managementposition? is your current job title? many full-time employees currently work in your organization? of the following best describes your organization s primary busi-ness activity? Agriculture/Mining/Construction Information Systems Trade & Retail Transportation & Public Utilit Nondurable Manufacturing Government Health Care Other __________________ Durable Manufacturing Finance, Insurance, Real Estate Services Please check the box if you would like a summary of this Thank You for your time and assistance! study and then fill out the personal information table below. Personal Information (please fill this section out only if you would like a summary of this study): Name: Address: Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
232 Goebel, Sheridan & MelocheChapter XExtreme Interviewingto Find Team OrientedProgrammers*Clement James Goebel, IIIMenlo Innovations LLC, USARichard SheridanMenlo Innovations LLC, USAThomas MelocheMenlo Institute LLC, USAAbstractMany software development hires fail to add significantly to the team soverall productivity. The typical response is to increase the number ofinterviews and prepare an examination of sophisticated technical questionsfor the candidates. But what if your most important hiring goal was to findnew technical employees with good teaming skills? One organizationdecided to create an immersion interview experience that providedcandidates with the opportunity to demonstrate their teaming ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 233IntroductionHiring new employees is a challenging task. Most managers recognize theimportance of identifying the candidate s technical skills, but fail to effectivelyscreen for the soft skills that will allow them to successfully function as aneffective member of the team. Even talented individuals with the proper skillsmight not be a good fit if they have a difficult time fitting into the companyculture. Worse, hiring a permanent employee for a specific technical skill aloneis likely a mistake. If an employee is hired solely for his or her deep knowledgeof C++, what happens if the company later decides to focus on Java? Theemployee is almost always retained, but was selected primarily for a skill setthat is now irrelevant. How would you change your interview process if you feltthat teamwork was as important, or more important, than any specific technicalskill? This chapter describes how one company changed its interview processafter deciding that soft skills such as collaboration and teamwork were evenmore important than expertise with a particular technology or NeedIn 1999, the executive management team of Interface Systems Inc. decided toimprove their software development capability. Specifically, they wanted to putin place a process that would provide a more predictive planning improved planning also needed to accommodate rapidly changing require-ments, because Interface Systems was entering into emerging markets wherethe definition of a successful product was constantly evolving. Executivemanagement also recognized that in order to succeed, they needed more thana new set of forms and reports, they needed to fundamentally change the wayin which the technical team went about its business, and likewise they neededto change the team s culture. Improving project-planning skills while creatingan improved corporate culture were both accomplished, in large part, by fullyadopting the practices of extreme Interface Systems later decided to add new developers to the team, greatcare was taken to devise an interviewing process that would communicate thecorporate culture to the candidates while at the same time allowing thecandidates to demonstrate their teamwork ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
234 Goebel, Sheridan & MelocheKey Practices of Extreme ProgrammingFor developers who have not been exposed to the practices of extremeprogramming, the culture shock can be profound. In an extreme programmingenvironment, collaboration is increased by having all of the developers work inone room without any barriers such as cube walls to separate them. Thiscollaboration is further enhanced by another practice called paired-program-ming, in which a pair of programmers sits together in front of one computer,working together. As work is completed on a project, the individuals frequentlychange partners to form new pairs. This rotation of partners helps promotecontinuous dissemination of knowledge throughout the team while discouragingroutines from developing within a particular pair that may result in negativebehaviors (Thompson, 2000, p. 105).In addition to close collaboration, extreme programming strictly schedulesdeveloper activities. These developer activities are defined by reviewing theuser-definable behaviors of the software system. Then, effective projectmanagement requires decomposing of the overall project outcomes into smallertasks that typically represent no more than a few days of effort (ProjectManagement Institute, 2000, p. 59). In extreme programming, each of thesesmall tasks is described on an index card, known as a story card (see AppendixA for examples). These story cards are used to create a schedule that quicklycompletes a working but incomplete system and then incrementally addsfunctionality. Developers work on the tasks in the exact order that they arescheduled (Beck, 2000, p. 85). This is important because the softwaredevelopment schedule in extreme programming is driven by delivering themaximum amount of business value as early as possible, unlike the standardsoftware development plan which is focused on making the developers feelefficient. For many programmers, this level of project scheduling rigor initiallyappears to be micro-management. However, most teams soon appreciate howthe well-coordinated efforts produce tangible results at regular intervalsthroughout a project, typically resulting in praise from both managers andcustomers Hiring MandateAs the team at Interface Systems gained competence in using the extremeprogramming practices, management developed greater confidence in theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 235accuracy of the team s estimates. The team s improved ability to predictsoftware schedules, along with an expanding list of new features driven by theneeds of an emerging market, led the executives to conclude that they neededa way to double the productive output of the team. This conclusion promptedexecutive management to expand the development team from 12 developers to24 as quickly as possible. Normally, the hiring process of reviewing resumes,interviewing candidates, and negotiating offers could easily take a month foreach successful hire. In this case the goal was to hire 12 developers, and to havethem all on board and contributing in less than 90 ChallengesDoubling the size of the existing development team was not meant to merelyincrease body count, but instead needed to quickly increase the team sproductive output. New team members needed to understand the team sproduct and technology tools, but more importantly they needed to becomfortable adopting the extreme programming practices and collaborativeteamwork that had become central to the team s software development processes, as adopted, required that new teammembers value a high level of interaction with other team members. It was alsoimportant to select candidates that would embrace the goals of the processinstead of merely moving through the steps of the process on their way to apaycheck. While teamwork is a term that most job applicants are familiar with,most of them have spent the majority of their careers being rewarded forindividual achievement or effort. Central to Interfaces new philosophy was thegreater value placed on team achievement rather than individual efficiency. Sotherefore it was vital to communicate to prospective new hires that all teammembers were expected to subordinate individual goals to team goals, andmore importantly for the interview process, observe an applicants behaviorwhen faced with this Participation in the Hiring ProcessBecause the existing team would be working very closely with new hires, usingpractices such as paired-programming, their participation was central to theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
236 Goebel, Sheridan & Melocheselection effort. The management team also felt that by having the existing teamselect the candidates, the existing team members would have a stronger stakein helping the new hires assimilate into the team recognizing the need for team participation, the management team wasconcerned that unguided selection would have left the current team membersselecting candidates based upon traditional hiring criteria such as specifictechnical skills. This concern is also known as the halo effect, which is thetendency to attribute positive traits to someone with whom you have somethingin common. This leads to hiring people most like yourself (Anonymous, 1992).Because the new team practices allowed talented developers to quickly addnew skills to their repertoire, the need for skills-based selection was lessimportant. Instead, the goal became to add new team members with a varietyof backgrounds and skills to extend the overall experience of the the key selection criteria was that the candidates were interested inusing the company s new practices, wanted to work closely with peers onassigned tasks, and had an ability and aptitude to learn new that the candidates could demonstrate teamwork during the interview, theinterview process was designed to represent an immersion in the team spractices. Therefore candidates would pair with other candidates andcollaboratively work through exercises that mimicked the daily work done PoolThe first task was developing a pool of candidates. The HR manager and acontracted recruiter took on the job of finding at least four candidates for eachof the 12 positions. They advertised in newspapers, attended job fairs, andsolicited candidates from other recruiters and current team members. Theirinitial screening was focused not on technical skills, but simply on contacting thecandidates and determining their ability to communicate clearly. They wereinstructed to look for energy, enthusiasm, and curiosity. As candidates wereoffered the opportunity to participate in the interview process, an HR represen-tative described the unusual format to them over the phone. Because this searchoccurred during a period of almost no unemployment in the informationtechnology industry, the process of identifying 50 candidates took six ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 237Interview FormatTraditional interviewing happens when a candidate arrives at the appointedtime and then meets with a series of potential peers and/or managers that engagein an open discussion after reviewing the candidate s resume. This interviewingprocess tends to provide an inconsistent interviewing experience and mostlikely creates biased results. Strategies that have been identified for reducingbias include: ask exactly the same questions of every candidate, limit access toresumes and other ancillary information, use multiple interviewers, and train theinterviewers (Campion, Campion, & Palmer, 1997).Several options were explored in a close collaboration between the softwaredevelopment management team and the human resources department. Underconsiderable time pressure, the following format was decided upon. All 50candidates were invited to a first interview on a Saturday. The goal of the firstinterview was to identify candidates with good communication and teamworkskills. No comparisons of technical skills or experience would be done at thistime; this would instead be an immersion exercise designed to allow candidatesto demonstrate their teaming skills. The top candidates would be invited backfor a second interview the following week, then job offers would be extendedby Friday of that same week. The candidates would be interviewed and offersextended in only one interviews were constructed around a series of interactive exercises so thateach candidate would have a similar and comparable experience. Theseinteractive exercises were devised to simulate key activities in the team s newprocess. In this manner the candidates would become better informed about theteam, while at the same time the team could gain insight into each candidate sskills and First InterviewOn Friday, the day before the first interview, 12 volunteers from the existingteam were assembled to learn and practice the interviewing process. Thevolunteers worked through the exercises that the candidates would be askedto perform so that they would be familiar with the exercises. The team thenreviewed the goal of the first interview: identification of candidates with goodteamwork and interpersonal ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
238 Goebel, Sheridan & MelocheFigure 1: Seating AreaEach of the 50 candidates had been assigned to one of two groups for theSaturday interview. As they assembled, they were given name badges. Theywere then directed to a seating area inside of a large warehouse (Figure 1).This warehouse was known as the Java Factory, a nickname based upon itsearlier function as the warehouse where printers were assembled on anassembly line, and its new role as the open collaborative workspace of asoftware team working in Java. This was probably the first in a sequence of redflags that helped candidates understand that this was not a typical workenvironment. As the candidates assembled, they were provided with dough-nuts, coffee, and to the Java FactoryAfter assembling, the candidates were introduced to the company, the team,and the extreme programming practices by the VP of Product Development ina 45-minute PowerPoint presentation. In this presentation, special attentionwas given to the fact that programming at Interface Systems was done usingpaired-programming, and that formal unit testing of code was required of allprogrammers. Questions were answered in a short question-and-answersession, and then the HR representative provided the more traditional 15-minute presentation on company benefits. Then the VP of Product Develop-ment described how the remainder of the day would be spent in three 30-minuteCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 239exercises designed to reinforce the development processes outlined in thepresentation and that the evaluation on who to bring back for second interviewswould be based upon demonstrated First ExerciseWhile the candidates were seated in the large group, it was explained that theywould be provided with a set of software development tasks, presented asextreme programming story cards, that they would then estimate. Each candi-date would be paired with another candidate, and together they would have 20minutes to estimate 32 story cards for a fictitious product. Each pair ofcandidates would be provided with a packet of pre-written story cards and ablank multiple-choice answer sheet on which they could record their pair would be seated with a developer from Interface Systems who couldanswer any of their questions. In the final stage of instructions, the candidateswere reminded that they were not being evaluated as to their programmingtalents, but rather their ability to think critically, ask good questions, and mostimportantly on their ability to make their partner look order to get everyone into position for the first exercise, candidates wereassigned a random number between 1 and 12, and then were asked to moveto a table with that number on it. Each table then had two candidates and oneinterviewer, along with all of the materials required for the exercise. Thisexercise quickly identified individuals who were unable or unwilling to help theirpartners participate. It also quickly identified individuals who could help drawon the experience of their partner to make better decisions. During the 20minutes, the room was very noisy, again providing a good demonstration of ourworking environment, and the energy level was high. At the end of the 20-minute period, candidates were brought back to a central seating area forinstruction on the second exercise, while interviewers made quick notes aboutthe interactions that they observed between Second ExerciseDuring the instructions for the second exercise, it was explained to thecandidates that they would answer a set of questions that were similar to moretraditional interviews. To further reinforce the standard practices of the JavaCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
240 Goebel, Sheridan & MelocheFactory, they would be assigned a new partner for this exercise, and they wouldneed to work with that partner to answer the questions together as a team. Onceagain it was reinforced that candidates were not being evaluated on thetechnical merits of their answers, but instead on their ability to collaborate withtheir partner to synthesize a single answer that combined their were then assigned a new partner and were seated with a newinterviewer. Each interviewer had the same list of questions and would look tofacilitate a dialog between the candidates. Most of the questions were format-ted as to require an odd number of responses to further reinforce thatcandidates should not simply split the workload in half. What are the three most effective practices that you have seen used todeliver successful software projects? Describe the most challenging bug that you helped someone else fix? What are five useful metrics in knowing when a method or subroutine istoo long?Again, after 20 minutes the candidates were once again recalled to a commonseating area. At this point the candidates were served lunch. Additionalvolunteers from the company served pizza and other options to the candidateswhile answering questions about the Third ExerciseAt the conclusion of lunch, the candidates were assembled for instructionsregarding the third and final exercise of the day. In this exercise the candidateswould be paired once again with a new partner and a new interviewer. This timethe pair would fulfill the role of product manager and build a softwaredevelopment schedule. Each product manager pair would receive a set of storycards and be asked to organize those tasks into a three-phase release planwithout exceeding a pre-established budget. The same story cards that wereused in the estimating exercise were reused, but the estimates were standard-ized for all of the teams. Again the selection criteria for being invited back fora second interview were shared with the candidates. Those candidates that bestdemonstrated critical thinking and teamwork skills would be invited back fora second interview. In other words, make your partner look good and yourchances ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 241In this exercise the interviewers simply answered any questions that thecandidates had about the process or the intended market for the product beingplanned. In addition to providing a third opportunity for candidates to demon-strate their skills, this exercise like the two prior exercises reinforced thepresentation on what daily life in the Java Factory would be like. At the end ofthe 20-minute session, candidates were invited to one final question-and-answer session with the VP of Product Development, and the interviewersagain made notes about interaction skills they had witnessed. The candidateswere thanked for their participation. The VP also offered to send a free copyof Kent Beck s Extreme Programming Explained to candidates who sent anemail describing how the interview experience had been for them. Thecandidates were then sent of Candidates for Second InterviewsBecause we ran two back-to-back sessions like this, each of the 12 interview-ers had watched 12 candidates work through various exercises during the day,and three different interviewers interviewed each candidate. At the end of theday, we reviewed each of the almost 50 candidates. As each candidate wasreviewed, interviewers were asked if they had any positive comments regardingthe person s interaction skills. Very quickly the team was able to sort candi-dates into three groups: poor teamwork skills, adequate teamwork skills, andstrong teamwork skills. The 15 with the strongest teamwork skills were invitedback for second the end of the day, the management team and the HR representativesreviewed the results. Perhaps most remarkable was the ability for 12 interview-ers to quickly agree on relative rankings for each of the InterviewsSecond interviews were scheduled during normal working hours during theweek that followed the first interviews. Second interviews were also builtaround three first activity was for the candidate to sit down with a pair of developers fromInterface and estimate a new set of stories. The threesome would estimate theCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
242 Goebel, Sheridan & Melochestories together at a more deliberate pace than in the first interview. Theestimates would also be based upon the technology that was most familiar tothe candidate. This allowed the interview team to assess the candidate sexperience level without quizzing him or her on technical trivia. This wasimportant given our concerns about interview consistency. Strictly scripting astandard set of questions would not allow us to explore each candidate sstrengths, while allowing the interviewers to create their own questions on thefly causes liability second activity was for the candidate to sit with a different pair ofdevelopers from Interface who were actually programming. After only a coupleof interviews, the team quickly learned to immediately place the candidate infront of the keyboard. This gave the candidate real-world experience withpaired-programming, as well as the opportunity to watch the rest of the teamworking in their native third activity was a one-on-one meeting with the VP of Product Develop-ment. The VP would ask some of the traditional questions about the candidate sbackground, so that the candidate would know that we had actually receivedtheir resume. He would then further probe their experience in the interviewprocess to date and their interest in the extreme programming practices. Thosecandidates that had obtained a copy of the book on their own and read it wereconsidered promising, as well as candidates who were concerned that extremeprogramming did not solve all software development problems, but were stillclearly compelled to learn more about the 2: Java Factory Work EnvironmentCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 243The Decision ProcessOn Friday, after the second interviews had been completed, all of the availableteam members were assembled. Each candidate s name was listed on awhiteboard along with his or her relative experience level within the members were then asked to speak up for candidates that should beadded to the first the discussions reverted into which candidate had the strongesttechnical skill sets. The team was reminded that it was a goal to hire new teammembers with the broadest diversity in both skills and experience, and that thefocus should be on how well the potential team members would adapt to theextreme programming practices and the team s new value set. The VP ofProduct Development then helped to refocus the discussion by summarizingwith a new question: Which of the candidates would you like to do paired-programming with? At that point the ranking was quickly arrived at and the VPdecided to make offers to the top eight of the eight candidates accepted of New Hires into the TeamOver the next four weeks, the seven new team members arrived. New teammembers were immediately assigned a partner on the morning they arrived andset to work on the stories for which their partner was already integration of new employees into this environment is almost impossible toimagine. New employees were writing production code on their first day atwork. This was true even if they had never used the development environmentbefore and even if they had never used the Java language before. The supportof paired-programming and knowing at least seven other team members fromthe interviewing cycle provided a strong support network. The open andcollaborative environment provided visible access to role models who demon-strated that interrupting others was not only tolerated, but also was an integration of new employees was so quick and so complete that when newhires were asked to participate in a second round of hiring, only 30 days afterCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
244 Goebel, Sheridan & Melochethe first, candidates could not tell the new employees from the old timerswithout ResultsThe company hired 14 developers within two months using this process. Therewas only one new hire lost to attrition during the life of the team. In almost anycontext, the results were stunning. It was the context of the times that made theresults almost unbelievable. All of the hires were completed between Februaryand June of 2000, one of the most difficult hiring periods in the history of ourindustry. They also occurred in the Midwest, where the propensity to changejobs is far lower than in other regions and typically results in fewer qualifiedcandidates. Finally, they occurred at a time when extreme programming,paired-programming, and collaborative work environments were not part ofanyone s of the candidates wrote glowing emails thanking the VP of ProductDevelopment for the opportunity to experience what for them was a uniqueinterview. Even the receptionist and the HR representatives were amazed athow many candidates were strongly affected by the interview and madesignificant efforts to further communicate their desire to join the team. While theteam s work was technically interesting, it was not more so than many otheropportunities in the region. Clearly, this process and the development practicestouched basic needs for a large number of people. We believe that the interviewprocess effectively communicated a culture of interdependent teamwork, andthat this message was communicated in a manner that allowed candidates to seehow they could successfully transition into our environment if they wereselected to join the most hiring processes, the close collaborative nature of the extremeprogramming practices made integration of new hires simply a part of thenormal work process, rather than an unpleasant distraction for otherwiseproductive employees. Perhaps the most telling example of the success wasthat after just six weeks, a new hire was familiar enough with the culture andskilled enough in the practices to be a mentor to new employees just joining theteam. It was a joy to manage and work with such a ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 245Screening for Technical SkillsAt Interface Systems, new product development focused on Java and Webtechnologies. Most of the 14 candidates that were hired did not have anycommercial experience with Java. During the estimation session in the secondinterview, the project elements, or story cards, were estimated based upon thetechnology most comfortable for the candidate. This made the candidate the defacto expert and allowed the interviewers to quickly gauge the limitations of thecandidate s professional experiences. While there was a small efficiencypenalty to pay for adding new developers who did not know Java s syntax oridioms, there were offsetting benefits. The team s broader set of expertise oftenmade it easier to incorporate new technologies as quickly as the Web worldcontinues to invent them. And the broader experience base often allowed theteam to consider a problem from several different most interesting of all were the two candidates who were hired withoutprofessional software development experience, yet performed well in each ofthe interviews. Both were music majors who had taught themselves computerprogramming, and both hoped to find entry-level positions. In both cases, webelieve a standard interviewing process would have screened out thesecandidates because of their weak and non-relevant resumes. But this interview-ing process selected these two candidates over other more skilled entry-levelcandidates, and actually ranked them higher than more experienced candi-dates. Both of these new hires became valuable contributors on the team, andtheir technical skills grew quickly. It proved to us that the speed with which anentry-level contributor can be grown within an organization is less related to theinitial level of technical knowledge that they bring to the table and more relatedto their ability to interact well with their peers, their desire to learn, and theaccessibility of the company Second Generation Repeats theProcessSince these events occurred, none of the authors have had the opportunity touse this interviewing format again. The human resources department consid-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
246 Goebel, Sheridan & Melocheered the original experience so successful that they facilitated interviewing foranother technical department professional services using the same pro-cess, even though the other department did not use the extreme programmingpractices. The professional services department provided contracted pro-gramming services to customers using traditional software development tech-niques. This team added six new team members using a very similar interviewingformat. This hiring effort was also considered more successful than the typicalserial interviews with question-and-answer development of this process was far from rigorous. We have not attemptedto demonstrate through experiments that this format is better or more predictivethan others. Nor have we continued to research parallel experiences with otherimmersion interview techniques. Nonetheless, all three authors look forward tousing this process in the future. We believe that it provided a very effectivetechnique to identify candidates that would integrate well into a team while atthe same time broadening the team s capabilities and experience ImplicationsWhen some managers are introduced to extreme programming, they oftenmarvel at the notion of two programmers working together at one without fail they ask, What happens if a pair of programmers fight? This is a reasonable question, because it is obvious that if two programmers areinvolved in an unproductive conflict, overall team effectiveness will , if two programmers are involved in a respectful and productiveconflict, then useful information is being shared between the parties that willincrease overall team effectiveness. So what do we do when programmersfight? If the discourse appears to be respectful and productive, then wecontinue working, pleased that important information is being shared betweenappropriate parties. If either party is failing to be respectful or the efforts fail tobecome productive, then we encourage peers to step in and help facilitate, oras members of the management team, we step in to help facilitate and coach exploring the scenario of arguments within a paired-programming envi-ronment, we then always make it a point to return the favor and ask the inquirerabout what happens in their environment when two programmers fight. Com-Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 247mon answers often include building buffers between the two individuals so thatthe conflict has less of an impact on team performance. At this point it pays topersist in the questioning and ask how well that worked out when all of theteam s work was integrated at the end of the project. Often we are treated tomanagers rolling their eyes and telling us war stories about how the individualsin conflict still managed to make a mess of things and how large problems cameto light at the end of the project. These stories are excellent examples aboutconfusing a lack of open debate with harmony. Isolating programmers withopposing points of view simply promotes a false harmony and often hidesgrowing problems until it is too late to fix software development practices promoted by extreme programming makeit obvious that teamwork is an essential ingredient for successful softwaredevelopment projects. But teams that do not use extreme programming willsuffer just as much as a team using extreme programming when individual teammembers do not work well with their teammates. It might just not be as obviousduring the early stages of the project. So the next time you are adding new teammembers, you need to decide if it is an adequate test of a candidate s teamworkskills to ask them if they are a team player. Or is it instead an appropriateinvestment of resources to devise an interview that will allow the candidate todemonstrate the skills that you value the most?Endnote*An earlier version of this chapter was developed as a white paper forthe Menlo Institute and was published on the Menlo Institute swebsite at . (1992). Personal bias can threaten interview process. (Humanresource measurements: Perspectives on testing and hiring procedures forthe HR professional). HR Magazine, 37(9), ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
248 Goebel, Sheridan & MelocheBeck, K. (2000). Extreme programming explained: Embrace , MA: , K., & Fowler, M. (2001). Planning extreme programming. Reading,MA: , ., Campion, ., & Palmer, . (1997). A review of structurein the selection interview. Personnel Psychology, 50(3), Management Institute. (2000). A guide to the project managementfibody of knowledge (PMBOK) (2000 ed.). Newtown Square, PA:Project Management , L. (2000). Making the team. Upper Saddle River, NJ: AFormal project management breaks projects into smaller units that can beestimated, assigned, and tested for completeness. These smaller units are calledwork packages (Project Management Institute, 2000, p. 209). In extremeprogramming, work packages are captured on index cards and called userstories (Beck & Fowler, 2001, p. 45). This appendix presents three samplestory cards for a fictional project. The goal of this project is to build a websitefor planning weddings. Two dozen story cards for this fictional project wereused for the exercises in the first interviews. At the top of each story card is theproject code, Wed, a tracking number, and a story title. A description of thedesired outcome for this work package follows. At the bottom of the card arethe initials of the card s author. Extreme programming does not stipulate thisformat, but this format is representative of how many extreme programmingteams capture their user stories, or story ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Extreme Interviewing to Find Team Oriented Programmers 249Exhibit 1: Sample Story Card Exhibit 2: Sample Story CardCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
250 Goebel, Sheridan & MelocheExhibit 3: Sample Story CardCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
About the Authors 251About the AuthorsMakoto Nakayama is Assistant Professor at the School of ComputerScience, Telecommunications, and Information Systems at DePaul University(USA). He holds a PhD from the University of California, Los Angeles and anMBA from University of Texas at Austin. Prior to moving into academe, heserved as a product marketing manager at Novell Japan. He also worked onbusiness planning and operating system developments at Yokogawa ElectricCorporation in Tokyo. His current research interests are in IT use in marketingchannels and IT skills portfolio management. His papers have appeared inInformation & Management, Journal of Information Technology, andproceedings of national Sutcliffe is Assistant Professor at the School of Computer Science,Telecommunications, and Information Systems at DePaul University (USA).She holds a PhD as well as an MBA from the University of California, LosAngeles. With extensive experience in industry, Dr. Sutcliffe has been aconsultant for many Fortune 500 firms in evaluating IT needs, IT implementa-tions, and IT strategies. She has worked as systems developer on mainframeand client/server systems as well. Her current research interests are in IT-enabled organizational change, IT leadership behavior, and IT skills portfoliomanagement. Her papers have appeared in Information & Management andproceedings of national conferences.* * * * * * *Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
252 About the AuthorsJohn E. Anderson is an Assistant Professor of MIS in the Department ofDecision Sciences at East Carolina University (USA). He earned his PhD atUtah State University, and his MBA and BA at the University of Utah. Hisresearch and writing interests center on organizational cognition, IS leadership,and IS innovation management. His writings have been published in the Journalof Computer Information Systems. Prior to joining the East CarolinaUniversity faculty, he taught information systems courses at Penn State Harris-burg, Appalachian State University, and Northeastern State Barrett is a Professor of Accounting in the School of Business at DixieState College of Utah (USA). He earned his PhD at Virginia Tech, his MBAat Indiana University, Bloomington, and his BS at Utah State University. Hisresearch and writing interests center on tax policy and tax pedagogy. Hiswritings have been published in the National Tax Journal, Journal ofAccounting Literature, Tax Notes, Exempt Organization Tax Review, andTeaching & Learning at Appalachian. Prior to joining the Dixie State faculty,he taught information systems courses at Southern Utah University and taxcourses at Appalachian State S. Chan is an Associate Professor and directs the Center for E-CommerceResearch in the School of Computer Science, Telecommunications, andInformation Systems at DePaul University (USA). She is the founding directorof DePaul University s pioneering master s and baccalaureate programs in e-commerce technology. As a former CIO at DePaul, she developed its six-campus IT infrastructure. Her research focuses on e-business strategies,enterprise applications and transformation, e-commerce curriculum, and mo-bile commerce. The Mobile Commerce Research Lab that she co-leads studiesusability and development issues concerning wireless applications. She earneda PhD in Instructional Technology from Syracuse James Goebel, III, co-founder of Menlo Innovations in Ann Arbor,Michigan (USA), has practiced object-oriented software technology for morethan a decade as a developer, architect, project manager, and mentor. Hiswork in commercial software development has spanned several domains,including bio-informatics, medical imaging, vehicle monitoring, test generation,and online bill presentment. He led the year-long change process that dramati-cally improved Interface Systems product development process. TheseCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
About the Authors 253changes included converting the programming team to extreme programmingpractices and establishing a human interaction design team. Mr. Goebel iscurrently a full-time member of an extreme programming (XP) team that is usingfiXP developer practices within the framework of a Rational Unified Processproject. In addition to acting as a mentor and change agent for softwaredevelopment organizations, he is a certified Project Management Professional(PMP), a Licensed Residential Builder, and is completing his MBA at EasternMichigan her career, Elizabeth Lahey champions lifelong skill developmentfor information and communication technology (ICT) professionals. In the1980s, she directed training and skill-building activities for McDonald sCorporation s ICT staff. There she pioneered re-skilling from mainframes toPCs and Web environments. She implemented a comprehensive solution tohire, train, and retain critical ICT workers. In the 1990s, Ms. Lahey becamea management consultant in the ICT human resources area. She specialized instrategic business implications of rapidly changing technology on the skilldevelopment needs of the ICT professional. In this capacity she consulted withFortune 500 companies across the Midwest. Since 2000, her work hasfocused on two key projects: (1) She designed, implemented, and managed thefi launch of the TechCareer Compasswebsite at whichoffers a comprehensive solution directly from the ICT industry aimed atbridging skills portfolio gaps. (2) She also manages a government-fundednational effort to standardize skills portfolios for first-line ICT workers. writes for ICT industry publications, speaks at ICT skills conferences,and is widely quoted on ICT skills issues. She holds degrees from Northwest-ern and the University of Illinois. Her professional honors include: McDonald sWoman of the Year, McDonald s ICT Coach of the Year, andComputerworld s Top 20 ICT Training Meloche is President of the Menlo Institute LLC (USA)and afounding member of Menlo Associates LLC. His passion is software develop-ment best practices and building successful software teams. Before foundingThe Menlo Institute, Mr. Meloche was the Director of Engineering at AppNet,Inc. For more than seven years, he helped lead a consulting staff that grew from30 people to over 240 people with total revenue of over $100 million. As aresult, he is intimately familiar with the real problems that befall real softwaredevelopment projects. He also knows how to rectify them. During his tenure,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
254 About the Authorshis delivery organization had a remarkable 100% successful delivery . Meloche regularly provides training to those interested in improving theirdevelopment processes. Past customers include General Motors, GeneralElectric, 3M, Ford Motor Company, Ford Credit, DaimlerChrysler, CumminsEngine, Sun Microsystems, Edward Jones, and AAA of Michigan. He has aBCE in Computer Engineering from the University of Michigan, and especiallyenjoys providing training back to his alma mater. He has taught classes andprovided mentoring for both the University of Michigan Law and A. Mirza is the Chairman of the IS Department at King SaudUniversity, Saudi Arabia. During the 2002/2003 academic-year, he wasawarded a senior Fulbright scholarship for conducting research at DePaulUniversity. His current research interests include e-business IT skills require-ments definition, e-business transformation, and e-commerce curriculum de-velopment. Dr. Mirza has wide industry experiences in application develop-ment. He attained his PhD in Computer Science from the Illinois Institute ofTechnology in 1995 and his MS in Operations Research from George H. Schwager is an Assistant Professor of MIS in the Department ofDecision Sciences at East Carolina University (USA). He earned his PhD atAuburn University, his MBA at Florida Atlantic University, and his BA inBusiness Administration from Palm Beach Atlantic College. His researchfocuses on e-commerce portals and Internet-mediated relationships. Hisresearch has been published in the Journal of Computer InformationSystems and the Journal of Information Systems Education. Prior to joiningthe East Carolina University faculty, he taught information systems courses atAppalachian State the former VP of Development at Interface Systems, Richard Sheridansponsored a dramatic change to the extreme programming model as he grewhis department from 14 to 36 developers. Mr. Sheridan previously worked forfour years as the Vice President of Product Development at Interface Systems/Tumbleweed Communications. Interface Systems Extreme ProgrammingTeam and Java Factory were his creations and his latest accomplishments in a20-year career in the software product development industry. Over the years,Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
About the Authors 255he has worked on and led the development of a variety of software products,including CAD/CAM, data communications, encryption, mainframe-basedprinting, and Web-based electronic document delivery solutions. An excellentspeaker and presenter, he readily shares his knowledge of software successpractices from real-world experience. Tens of thousands of products createdby Mr. Sheridan s teams are still in use by customers Strauss has a BS in Mathematics from SUNY at Stony Brook and anMBA in Finance from New York University. Mr. Strauss has spent 20 yearsas an IT consultant building and designing dozens of IT applications. He hasspent the last eight years in the IT skill assessment industry working forBookman Testing Services (USA) and its premier assessment product,TeckChek. Mr. Strauss has served TeckChek as a Product Manager and mostrecently as the Director of Assessment Consulting, working with TeckChek sclients to help them incorporate skills testing into their overall skills Takeda is an Associate Professor in the Graduate School of Environ-ment and Information Sciences at the Yokohama National University (Japan).She has researched the inter-organizational and cross-functional collaborationusing electronic media such as impacts of 3-D CAD on the product develop-ment process, collaboration between IT vendors and users when implementinginformation systems, and disclosure of technical information on open networksin order to promote innovation. Her articles have appeared in numerousjournals, including the Journal of the Japan Society of Management Infor-mation, Hitotsubashi Business Review, Keio Business Forum, and Organi-zational Science. She was a visiting scholar at Stanford University. She holdsa BA in Experimental Psychology from Kyoto University, and an MBA and aPhD from Keio Business J. Wong-MingJi is an Assistant Professor in the Department ofManagement at Eastern Michigan University (USA). She completed a PhD inStrategic Management from the University of Massachusetts, Amherst. Herresearch interests include strategic alliances, organization development andchange, learning and technological innovations, and international managementof global strategies. She has published in Organization Development Journaland Organization, as well as presented at numerous conferences such as thoseCopyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
256 About the Authorsof the Academy of Management, Strategic Management Society, and NorthAmerican Case Research Association, along with serving as a board memberof two non-profit organizations. She has taught strategic management, organi-zation development, research methods, leadership, entrepreneurship, andteams. Recently, Dr. Wong-MingJi helped launch a Master s of ScienceDegree in Information Systems between the College of Business at EMU andOsmania University in Heyderabad, ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Index 257Indexchief e-commerce officer (CeCO) 62Achief knowledge officer (CKO) 68academic and employability (A&E)cognitive demands 6skills 130cognitive phase 6academic programs 53collaboration 52,233Academy for Advanced InformationCompTIA (Computing TechnologyTechnology Professionals 162Industry Association) 137adapting sub-topics 113connective organizational capabilitiesadaptive questioning 111183adaptive testing 112coordinator 151adult learning theory 84core competencies 14andragogy 89credibility of IT certification 222application service providers (ASPs) 55critical sourcing 42application-based education 223critical work functions (CWFs)assessment 104, 111128,140assessment score (AS) 40criticality (C) 40associative phase 6criticality score 40autonomous phase 6custom training content 121customer relationship managementB(CRM) 55customized systems 151B2B e-commerce 53business intelligence (BI) 55DCdatabase management systems(DBMSs) 63candidate pool 236decision support systems (DSSs) 63case study 84deliverable descriptor 39certification 210delivery 5certification exam 111difficulty score (D) 40certification tools 111changing landscape 68Echief algorithm officer (CAO) 68chief e-business officer (CeBO) 62,68e-business 52, 54Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
258 Indexe-business environment 52industry value chains 53e-business needs 53industry-wide collaboration 53e-business organization 52information and communicationse-business project implementation 65technology (ICT) 81,126e-business transformation 54information systems (IS) 211e-business webs 52information technology (IT) 53e-procurement (EP) 55Information Technology Association ofeducation 210America (ITAA) 2, 137employee benefits with certificationsInternet strategies 53211interview process 233employment 126IS vendors 151enterprise application integration (EAI)IT 5355IT outsourcing 177enterprise applications 54IT personnel 53enterprise resource planning (ERP) 55IT professionals 2,27experience 210IT-skill dilemma 151extreme programming 233IT skill gap analysis 105IT skills 2,27,52,68, 151GIT skills acquisitions 69IT skills management 54,103global competition 172IT skills portfolio 27global Internet network 132IT skills portfolio management 31,52government involvement 126IT skills requirement 53government policy 132IT-skill standards 161governmental skill development 127JHJapanese companies 150high assessment score 42Japanese firms 151hiring 104, 105, 233Japanese IS vendors 150hiring process 123job 12HR centralizing 192job concentrations 130HRIS 177human capital 177Khuman capital portfolios 177, 180human capital theory 9key activities (KAs) 129,140human resource (HR) 8,88,211knowledge, skills, and abilities (KSAs)human resource information systems8, 29(HRIS) 177Lhuman resource management 27human resource professional 210learning management systems (LMSs)human resources 4,53104local area networks (LANs) 160Ilocal contracting 192ICT professionals 84MICT skill standards project 146industrial and occupational (IO) psy-management of IT skills 14chologists 144Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
Index 259mass validation survey 146SMoore s Law 131sector skills development agencymulti-mission capability 27, 30(SSDA) 2multiple correct answers 114skill 5,6Nskill analysis 106skill classifications 7National Skill Standards Act 135skill food chain 130National Skill Standards Board (NSSB)skill gap 126,136135skill mismatch 83non-staffing vendors 194skill standards 127NWCET (Northwest Center for Emergingskills issues 126Technologies) 137skills management 11skills management tool 111Oskills retention 63occupational and technical knowledgeskills search 120and skills (OTKSs) 130Society for Human Resource Manage-organization man 82ment (SHRM) 211organizational benefits with certificationsoft skills 233211software development 233organizational capability 184staffing firm 194organizational improvisation 186stars 36organizational learning 184,186strategic alliances 184strategic business goals 37Pstrategic business units (SBUs) 36strategic goals 37people-centered organization 27, 29strategic human resource managementperformance indicators (PIs) 129,140(SHRM) 5,11,28portfolio 31strategic IT goals 38portfolio management 27sub-topic skills 106productivity rates 126subject matter experts (SMEs) 140profession 211supply chain integration 54project identifier 39supply chain management (SCM) 55,project staffing 104, 105177project team building 119systems integration 186project s difficulty 39proper assessment tool 111Tpurchasing HRIS 193task performance 5,7Rtask-oriented perspective 7team participation 236rational organizational capabilities 181teamwork 233relational contracting 185, 186teamwork skills 233resource needed score (RC) 40TechCareer Compass (TCC) websiterisk level score (R) 40146technical skills 233technology 131Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
260 Indextelecommunications legislation 132testing 106theory-based education 223training 104, 105training and certification 212transformation 52UUnivacs 29Vvoluntary partnerships 136Wweighted answers 115work-based learning 27, 31Workforce Investment Advisory Board(WIAB) 100writes code 129Copyright ' 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenpermission of Idea Group Inc. is prohibited.
