Constructing Your IS Model
To begin, recognize that every organization has a model today. The model may not be formally recognized as such, but we all have a "method" of going about the acquisition, motivation and retention of technical Information Systems resources. The model may have the trilogy of executive, technical and HR management involved in full or part, and may currently be producing adequate talent for the IS organization or may be in disarray, causing consistent and numerous staff openings. Whatever form the model takes, you had better be prepared for more change and high-demand stress. Information Week recently reported that more than 191,000 IS jobs are vacant in large and medium-sized companies in the USA. This survey did not include small or non-profit companies. There is one vacancy for every ten current IS workers. And, demand will double for IS professionals over the next five years!
The message is clear - formalize your model internally and begin refining the processes to your culture. There is no time to waste if the challenge is to be met successfully. How is this accomplished? Consider a seven-step approach to establishing your model for exemplary results:
1. Executive, technical leaders and HR management should jointly review the business initiatives of the company as projected for the next year or more. Agreement should be reached on objectives of IS in supporting these initiatives. Review planned new development, ongoing support and maintenance, current projects in process, current and required manpower, existing skills and anticipated skill set needs. This will require a detailed preliminary assessment by each entity within the IS technical management group. They may represent teams, projects, technology sectors, locations, etc. However, all current and future needs and resources must be accounted for with as much supporting business justification as possible. Determine shortfall and surplus conditions for manpower or skill sets, and the time frames that are applicable.
2. Examine the current IS organization and identify the Core Group - the must-keep individuals who aspire to leadership roles. Identify the marginal and less desired people who probably will not be around three years from now. Define who are the core individuals in strategic roles and plan skill-development and staged soft-skills enhancement programs for them. Plan to move the future managers into leadership positions over resource groups in the future one, two and three years. Situate the individuals with minimum future into pure technical responsibilities or plan them out. Do not allow them to put the organization in a vulnerable negative multiplier position down the road. This effort needs HR’s full attention on the front-end.
3. Review trends that have been occurring in your company's IS culture. Key in on strengths, weaknesses (be critical), turnover ratios by group, hiring patterns for success or failure, technical training and the monies being invested for true ROI, demonstrated performance to manage contract resources, and retention rates of staff. Examine who is being retained - the best or the marginal talent? Examine secession patterns - who and why people are promoted and the results. Compare overall IS organizational status with competitors, if possible. Procure external data (DataQuest, Gartner, others) to scrutinize any specific trends that could be a direct factor with the current staff or anticipated plans, i.e., offshore resources, flex hours, casual environment and telecommuting.
4. Review the current overall approach to contract consultant management. Following the Core Group strategy, permanent employees will be in the directing roles and contractors in supplemental roles. Are contract consultants acquired for a specific technical purpose, and is that spelled out in terms of expected results and terms? Establish an extension policy - ensure that extensions are appropriate and not just convenient. Also, build an internal communications method for informing core project leaders that a highly regarded consultant's term will be ending soon (1-2 months) and describe their specific skills. Planning will enable the organization to retain top contract talent. Retention of these skills with knowledge of your culture is almost as critical as retaining core permanent contributors. There is nothing wrong with retaining a good contract consultant for several years if the utilization of the resource is planned. One Fortune 50 organization averages more than 1.5 years per consultant because it selects and re-deploys well, and it knows the true value of high-demand technical skills. Its plan works well! It also holds each core leader very accountable for results and ROI. Accountability makes the core leader forget about the issue of contract or permanent and focus on results, deadlines and meeting the plan set out by the company. After all, that is the issue and one really takes care of the other.
One fallacy emanating from the past is the argument of valuing contract consultant expenditures. For example, some would say a consultant costs $60+/- per hour x 2,000 hours per year, or $120,000. Obviously, they would say, a permanent person should be hired who would just cost around $55,000. This is old-world thinking and will not win in our current state of market. Consider that most contract engagements average six months, so in the course of a year that will represent two or three projects, and possibly with one or more (different) core managers. Perhaps, the project is longer and will be 18 months. In any event, the expenditure is temporary and the service provided by the individual fulfills a specific need in a timely fashion - and that is the point. To "straight-line" cost unjustifiably is a false economy. Determine where resources are needed for core and hire permanent, and staff contract for supplemental technical needs. Do not let this get hazy or become a gray area. Then, manage the two different types of people and mindsets accordingly.
5. The model should reflect the current organization, as well as needs and plans for the future. Determine what percentage of the total resources are permanent vs. contract. Peg that number - it becomes the company guideline. Is it an 80/20% model? Perhaps 70/30% in year one, 75/25% and 60/40% in years Two and Three, respectively. The model contains associated company processes for skill acquisition, resource management (permanent and contract) and retention. The model should take into account where the company plans more or less future investment; strategic moves, such as acquisitions or divestitures; and overall IS resource deployment. Now, instead of just an IS department, you have an IS resource with the muscle to enable the life-support actions of the company. The model serves as a new way of looking at IS internally, bringing IS in tandem with the strategic direction of the company and forcing an ongoing, global critique of overall IS performance. This new view needs strong support from the top. "This is how we do business and how we run the business" should be the message from the CEO and CIO. They should be happy because the business can deliver system results, maximum flexibility and respond immediately with new technology, when appropriate. The IS department is now positioned truly to assist in profit generation - not just be viewed as a mega cost center.
6. Seek and build true partnerships with vendors who can staff the permanent and contract needs. Ask the vendors for help in laying out the rules, then ensure that everyone lives by them - including the client organization. Make the goal to have partners who will deliver the best talent in an expeditious manner and with integrity. The goal is not the largest discount - you get what you pay for. However, volume in permanent and volume/term with contract are important considerations to a vendor. By selecting a few partners, some economies may be realized. Always evaluate your partners on a regular and predictable schedule. Make changes only when lack of performance dictates - but be decisive.
7. Work the model for continuous improvement. Every associated process will need constant scrutiny for ways to make it work better for all: executives, technical leaders, HR, the user community, contract consultants, perhaps purchasing, and others. All must understand the purpose and the benefits - "this is how we do business." Solicit all participants in the model for their ideas for improvement on an ongoing basis. Then the model will begin, over time, to gain internal ownership. Bring the vendor partners in quarterly for updates on anticipated technical trends and potential skill needs. Publish performance trends so that each partner knows the answer to, "How am I doing?" - there should be no surprises. A good principle on which to build and work the model is from Stephen Covey's habit, "begin with an end in mind."
This seven-step approach may change the entire look and the personality of the IS organization. Over time, the new approach will instill a feeling of corporate self-esteem and ultimately contribute more profit. The IS department will feel a sense of being mobilized to "get the company where it is trying to go." The feeling of purpose and strategic importance is difficult to articulate but everyone within knows of its existence. This model, if built and cultivated, will work successfully. We have seen the success occur in organizations who are savvy to the changing landscape of corporate America. Remember that a "model" always exists; the key is - what will be the state of each company's individual model? The IS paradigm has changed. Those who ignore the development of their IS staffing model will find it increasingly difficult to deliver the technical infrastructure that firm-wide success will demand. Those who look ahead and plan for the continued wave of technical change will be the leaders of the future. Failing to plan is more like planning to fail.
About the Author
William "Bill" Gower is a founder of MATRIX Resources, Inc., an Information Technology placement firm serving the Atlanta, Dallas and Phoenix markets. His IT industry experience spans 30 years, including positions with IBM and Comshare, Inc. He has been counseling permanent and contract IT professionals since 1981. He can be reached at Bill_Gower@MatrixResources.com |