Organizational competence in harnessing IS/IT GP Dhillon, PhD Virginia Commonwealth University

The skills challenge ... questions often asked ... How many specialists do we need to employ and in which areas? How many of the specialist skills should be pooled? What is the impact of outsourcing? We have oversupply but often cannot get the right staff. How come? What will be the profile of IT staff who can have a long term career with the organization? Can we define clear targets for our training program?

The external drivers Environmental forces: globalization localization Motives: resource pooling risk sharing utilizing relative advantage reducing supply chain uncertainty increase resource utilization IS/IT role in reducing transaction costs transaction risks IS/IT role in making collaboration physically possible Co-operative strategy & co-operative information systems

The internal drivers for change Changing view of roles and responsibilities Changing technology Changes in service provision Roles issues Skills

Some dominant management theories since 1960s Management by objective Theory X and Theory Y T - Groups Management Science Matrix Management Diversification Conglomerates Optimal Investment Portfolios The Systems Approach The Managerial Grid Econometric Models Long - Range Strategic Planning S - Curves and Product Life Cycles Zero - Based Budgeting Portfolio Matrix Experience Curves PIMS Centralized Corporate Strategy Limits of Growth Intuitive/Analytic Management Searching for Excellence One - Minute Management Management by Walking Around (MBWA) Restructuring Entrepreneurship Competitive Strategies Theory Z Quality Circles Strategic Alliances Global Rationalization Total Quality Management Core Competencies Self Directed Teams Benchmarking Just in Time Cycle Reduction Time Delayering/Restructuring Horizontal Organizations Empowerment Reengineering (BPR) Agile Manufacturing Virtual Organizations

Competency lists

Organizational Competence Organizational competencies are concerned with the abilities of developing, managing, and deploying resources and relate to organizational outcomes Organizational competencies comprise personal skills and organizational processes that are affected by the culture of an organization An organization will need to have competencies in several areas (e.g. Marketing, Engineering, Human Resources, Information Systems) to achieve a given capability objective. Often these component competencies strongly interrelate, and indeed the ability to manage this interdependency is itself an organizational competence

Process of competence development COMPREHENSION (Components) DEFTNESS (Process) EMERGING COMPETENCE (Outcomes) RENT (Measure) COMPETITIVE ADVANTAGE (Capability)

The logic of developing competencies - a Individual skills Organizational competence Cost efficiency Value addition a measure of success * Knowledge based strategy * Exploitation occurs with value adding relationships * Supply of IT is about designing the infrastructure An idiosyncratic view on competencies An industrial organization economics “Internalized knowledge of an individual” view on competencies competence required for delivery

The logic of developing competencies - b Individual skills Organizational competence Cost efficiency Value addition a measure of success IT infrastructure System development Exploitation Business requirements competence required for delivery

Positioning Strategy Culture Supply Business requirements Exploitation infrastructure System development Exploitation Business requirements Culture Strategy Supply

Organizational Competencies Wheel Culture Exploitation Strategy Supply

Strategic use of IT and related competencies A key competence in relation to the strategic use of IT is to consider future options affecting the way an organization works, both internally and in relation to its customers

Competence in supplying IT It is important to set longer term planning and development standards that applications subsequently comply with IT must support new business processes but requirements analysis is a critical stage which needs to be undertaken by those close to the people, often in an iterative way In order for IT to deliver business strategy there has to be a clear understanding as to where IT needs to be tailor made and where packages can be used

Competence for exploiting IT Getting people to change their ways of working can be a complex task and a variety of approaches may be required to facilitate buy in. However all of the approaches require significant investment in time, cost and support Competencies for harnessing IT can be linked to improved organizational capability and measures relating to improvement should be developed

focused technological Culture Exploitation Strategy Supply Radical organizational change Individual effectiveness for change management Organizational resource application Short term planning skills competence Operational Reshaping Cost efficiency Value addition Corporate knowledge Idiosyncratic information Organizational economics Focused performance targets Individual skills competence Production/ Development Technological Planning Future direction & organizational standards Specialist standards & focused technological planning Ability to integrate & maintain Ability to build Individual skills Organizational competence

* Comprehension (skills & knowledge) * Process (how it can be Culture Exploitation Strategy Supply Are IT trends considered during scenario planning? Not considered Considered fully Do you review the significance of IT in radically improving the business processes? No business processes Process options modeled To what extent are IT impacts considered in relation to future staff skills and numbers? Insignificant Dominant role Radical organizational change Individual effectiveness for change management Organizational resource application Short term planning Individual skills Organizational competence Operational Reshaping - Scenario planning - Process modeling - Manpower planning - Managing infrastructure - Understanding customer perceptions - Evaluating resource utilization - Functional redesign - Personal/Team development - Negotiating skills - Setting specific targets - Supporting IT - Dealing with service level agreements Identify: * Comprehension (skills & knowledge) * Process (how it can be done - best practice) * Monitoring (effectiveness)

Idiosyncratic information Culture Exploitation Strategy Supply Cost efficiency Value addition Corporate knowledge Idiosyncratic information Organizational economics Focused performance targets Individual skills Organizational competence - Articulating value to business - Developing individual knowledge - Maintaining external recognition of contribution - Performing cost/benefit analysis - Monitoring performance - Automation - Investment appraisal methods - Contractualization of decision making - Maintaining economies of scale and scope - Ability to leverage expertise - Managing benefits - Evaluate and review strategic c choices

Specialist standards & focused technological planning Culture Exploitation Strategy Supply Specialist standards & focused technological planning Future direction & organizational standards - Defining specific work packages - Understanding development options - Clarity of work practices - Reviewing and understanding value addition - Setting planning control options - Understanding technology trends Technological Planning Ability to build Ability to integrate & maintain Production/ Development - Technical risk management - Technical performance management - Understanding of system development methodologies - Developing an ability to learn continuously - Skill development Individual skills Organizational competence