Decoding The Value Of Core-Competency
The fundamental operating principles have remained relatively unchanged. Decoding the core-competencies in knowledge-based economies notably in IT Industry; where it is broadly characterized by projects and the competencies reside within the distinctive knowledge and abilities of the people; perhaps has never been more central.
The industrial revolution largely epitomized core-competencies for higher economic value. With constantly changing economic environment and technological innovation, core-competencies are even harder to build and institutionalize; thoughtlessly, its true importance wouldn’t be understood. This demands companies to rethink people strategies, human resource development, and workforce management.
The oddity of core-competencies is arguably the most extensively discussed topic among both the classical and contemporary management thinkers and between the business circles. A lot has been written on what it takes to get it right. The characteristics for consideration include culture, people, technology, process, product, and service etcetera.
Though core-competencies are not standalone management fad or theorist’s celebrated concept; but a continuous effort of excellence and innovation built into business strategy, planned, and practiced in every part of the business since the industrial revolution.
It can as well be articulated that the core-competencies are not an anti-thesis to diversification; but it of course is a subject matter of a different kind.
There are businesses as Information Technology where core-competency is even the hardest to build and sustain because of the nature of its operations. It is prominently resource based and people intensive industry where IT outsourcing has become a leading practice with flexible organizational structure which centers on both face-to-face and virtual operational models.
There is a growing predisposition with empirical substantiation of structural changes in these knowledge-based industries. The generic concerns of the contemporary management practitioners in IT industry regarding projects essentially have been to staff the right resources.
In many domains of design, implementation, development, and knowledge intensive activities of project the competencies are not necessarily contained within a company’s thresholds but instead reside within the instinctive knowledge and practices of professionals and the resources.
It is the mobility of human capital and its integral knowledge that forms the creation of flexible project organization; by implication, project based companies in general experience reasonable risks of either non-availability of the right people or the dearth of resources.
Understandably, each project has its own conclusive objective, plan, timeline, and budget and at the end of the project, team is parted and the resources are moved on to different projects. Therefore, core-competencies are not retained within the project and the notion of sustainable competitive advantage and value creation loses its meaning.
Human resources are certainly the largest component of an IT company and obviously the composition of the project resources and movement of competencies changes the dynamics of project’s success and or failure. Establishing trust, mutual understanding, and promoting a culture of togetherness envisioned to be strategic and foremost thought for economic resiliency.
To ascertain exactly where the critical threshold is to more thoroughly understand the underlying causes of value leakage in IT Industry; is to accurately understand the variety of IT functions with differential objectives in all of its relevant variables; is to truly understand the relative maturity level under different business scenarios across the value chain.
The internal capabilities including those related to — strategy, governance, planning, implementation, and operations — to effectively and efficiently manage all aspects of projects and its contributors are strategic and it is also the hardest part to get it right. Observations denote that they varied considerably among the facets characterized. The following illustrative model (See Figure 1) is a no-nonsense straightforward representation of distinctive elements.
The capabilities and human resources’ competencies largely define the products and services a company provides. The maturity level of variables and the merit of the best practices are directly proportional to the strength of its internal capabilities. Companies need to audit these elements frequently and find out the potential areas of improvement, training, and competency development; thereafter take preventive and corrective actions where it matters the most.
For instance, if the engagement model is ad-hoc and that most of the projects across the organization follow superficial practices and often find it hard to realize the potential of human resources for value delivery; it makes sense then to work towards establishing a disciplined methodology and a code of conduct that delineates processes and steps in managing and delivering on promises across the life cycle of the project.
Any effort of this nature requires discipline in strategic planning and implementation with an integrated, efficient, and effective model of value delivery; and the right people.
Yet, the observations of conventional practices show that the project-based companies in IT industry cannot accumulate core-competencies and that the core-competencies are represented by the human and social capital of the project. Therefore, each project becomes a learning experience for its resources and for their respective companies.
The core-competencies are valuable as they provide competitive advantage and generate better economic value. However, it is the availability and fulfillment of the right human resources to create an economic value; therefore it is about the preparedness and ability of the company to build sustainable competencies.
With the constantly changing economic ecosystem; valuable and efficient workforce will be even more important to the continued success; not only for the projects but also the companies. Given finite resources, determining the right answers to the questions routinely face; which competencies to develop, technology to focus, and the capabilities to prioritize, invest, and support is quite a task.
This demands developing, and supporting diverse, and highly qualified workforce with the right competencies. Generally, it is the forte of human capital management — recruitment and retention, training and personality, leadership and accountability — and providing a stable and balancing environment with greater transparency empowering employees to create productive, trustworthy, and safe workplace. A great culture enables people to deliver their best work.
In a nutshell, human resources and capabilities are at the foundation of core-competency and economic value. Note that having the right people, resources, and workforce on-board and providing an environment that supports their aspirations and individual growth is of distinctive differentiation for the company.