IT-as-a-service (ITaaS) is an operational model where the IT service provider delivers an information technology service to a business. That service could come from internal staff or from outside resources. The key is that this service is so seamless, the customer never really knows where it originates from.
To run IT as a service successfully, you need talent in service and talent in technology. Nowhere is this more apparent than in digital transformation and cloud-based IT, where most companies are making major investments. Unfortunately, the talent isn't always available.
In a 2017 CFO Research survey of 123 US mid-market company financial executives, almost half (49%) said the inability to attract and retain qualified technology talent was adversely affecting their businesses.
When these executives were asked about the strengths of their internal IT staffs, they said that 40 percent of their talent challenges were in finding the technical and service skill sets internally to do the projects IT was being asked to do. Another 36 percent said that their internal IT lacked strategic planning and vision, 34 percent said that internal IT lacked knowledge of the business, and 33 percent said that IT was lacking project management skills.
Solving this talent challenge isn't easy. To meet it, CIOs consider a variety of strategies that range from direct hiring, contracting, and renting to sharing talent. The most coveted IT skills are in digital transformation and advanced skills in cloud-based technologies.
The technical skills needed for digital transformation are not necessarily difficult for IT to provide; rather it's the set of soft or interpersonal skills that facilitate digital transformation that IT lacks. Digital transformation projects require significant interactions with users as they learn how to master new digitally based technologies, like document management.
Working in a collaborative and sharing service context doesn't come easy for many IT professionals, either. They may prefer to be engaged in the technical details of their work and might be protective when it comes to sharing their knowledge and skills.
Digital transformation and advanced cloud management techniques are areas that CIOs must address to ensure that their staff can meet technical and service needs. Here's a look at some of the talent acquisition strategies that companies are using.
In a 2016 Harvey Nash and KPMG survey of more than 3,000 IT leaders, 65 percent reported difficulty hiring IT talent and said it was hurting their businesses. Data science, security, and cloud computing talent were among the most difficult areas to recruit for. All of these skills bases are directly related to digital transformation and cloud technology.
Companies have to offer attractive compensation, positions, and career paths to successfully compete in these tough talent markets. They must also provide pleasant work cultures and working conditions. Many companies use talent management systems that help them forecast their staffing requirements and assist them in determining how they're going to fill talent acquisition and development needs -- whether it's through outside hiring or through internal cross-training of personnel -- so they can fill new roles.
Some companies also use the 'farm system' approach, where they partner with local colleges and universities. In this approach, companies serve on college and university advisory boards, assisting in the design of IT curriculum. More aggressive companies don't stop there: they provide senior staff to deliver lectures in classrooms on relevant topics and sponsor college-credit company internships for students. By interning students, the company gets to know young grads in advance of deciding whether to hire them. If a company does decide to make an offer, it is making it to a known quantity individual who has already formed professional relationships with staff. This improves the odds of a successful hire and provides a way to get new grads into productive IT roles faster.
"Our working relationship with Tongji University in Shanghai, China, focuses on moving forward with some of basic System z mainframe skills development, and this is done by correlating course content with on-the-job internship and permanent employment requirements," said Wei (Martin) Jiang, manager of DB2 for z/OS Development at IBM's China Software Development Laboratory-Information Management. "By actively cooperating and exchanging ideas with the university, we feel that this benefits both Tongji and ourselves. We are delighted that the university has already initiated a series of actions to implement the educational concepts we have discussed."
Contracting is another approach IT takes to solve talent shortfalls in digital transformation and cloud-based work.
There are websites where you can seek IT contractors, but the best avenue for securing high-caliber tech contractor talent is through word of mouth or by contacting contractors you have already worked with. For one thing, you already know the type and level of work the contractor can provide. A second reason is cultural. The contractor has likely already demonstrated that they work well with your team.
When you employ a contractor, you pay top dollar for services and expect that the individual will be highly self-sufficient, with no learning curves. Accordingly, agreements with contractors should be structured to allow you an easy out at the beginning of an engagement if you discover that they aren't measuring up.
Companies also use the contractor approach when they need to fill an important position, like data scientist, but haven't been able to push it through as a permanent hire in their budgets. In such cases, they might hire a contract data scientist and decide to offer permanent employment later if the contractor's work is excellent and the budget opens up. This happened to an acquaintance of mine who was consulting on IT to a major league baseball team. The team liked his work so much that it offered him a permanent position.
Although the terms 'renting' and 'contracting' are sometimes used interchangeably, they are not the same. When you rent, you are using more of a permanent outsourcing approach than when you contract. Companies rent call centers (and call center agents). In IT, they might even opt to rent help desk staff who provide service and support for digital transformation.
Renting is more broadly utilized in advanced cloud technology. Software-as-a-service (SaaS), platform-as-a-service (PaaS), and other cloud-based offerings are rented via subscription or per-use prices. The understanding is that you will be using the cloud resource for the long term.
One of the most popular cloud-based rental services for IT is in application development and testing because the cloud-based vendor furnishes the hardware and systems and you don't have to buy them.
Resource sharing is another approach to talent acquisition that can be used effectively in both digital transformation and the cloud. It's most often used by smaller companies, especially in the not-for-profit sector.
Here's how it works in the credit union world:
Four small credit unions can't afford their own IT departments and specialists, so they band together to fund an IT budget and hire the ITers they need. They fund cost and resource-share data center and personnel expenses, which are facilitated because they all use the same systems. IT becomes a service center, as it now has four 'customers' whose needs it must serve. The challenge for the CIOs is to make sure that the individuals assigned to the cloud service have service and support skills that can match their technical skills. Sometimes this is easier said than done.
"We made the transition to a cloud-based service for multiple financial institutions several years ago, and one of the cultural changes we had to make in IT was a move to a service culture," one CIO acquaintance told me. "We experienced casualties along the way. Three of my top technical staff opted to find employment elsewhere because they didn't want to do the customer service."
No single talent acquisition strategy fits all companies, and most companies today use a combination of talent acquisition techniques to get their digital transformation and cloud work done.
That isn't likely to change soon.
Defining a clear vision of what you expect your workers to do -- and a vision of where they can go and grow -- helps enormously, whether they are permanent employees, contractors, or rental vendors. So does showing them that you care about their welfare/partnership, that you are committed to service in your culture, and that you appreciate the efforts they make for your company.