How Supply Chain Principles Can Better Manage Expertise
Cover Story
By Harold Blake   
Sunday, 15 May 2005
smc Companies that succeed in the long term need to adapt to market trends or it is likely they will fall behind. IBM learned this first-hand in the early 1990s, when it ignored what its customers and what the market were telling the organization. Thankfully, IBM’s turnaround has been a well-documented success.
Companies that succeed in the long term need to adapt to market trends or it is likely they will fall behind. IBM learned this first-hand in the early 1990s, when it ignored what its customers and what the market were telling the organization. Thankfully, IBM’s turnaround has been a well-documented success.
Companies that succeed in the long term need to adapt to market trends or it is likely they will fall behind. IBM learned this first-hand in the early 1990s, when it ignored what its customers and what the market were telling the organization. Thankfully, IBM’s turnaround has been a well-documented success.

Fundamentally, a broad shift at IBM has been underway for more than a decade, toward a business model based not on product sales, but on the delivery of comprehensive solutions to clients' problems. Those solutions are provided by people – people with expertise in both technology and in how it can be applied to particular business processes and to a particular industry's needs.

The unconventional thought here is how to apply supply chain principles to better manage and deploy expertise. Yet, the concept of “supply chain” may no longer adequately describe what is going on. This isn't a “chain,” but an expertise-based web or network. And it's about having a more disciplined approach that will match work demands with skilled resources.

If your company is like most, resource deployment is done manually by using e-mail, the telephone, clipboards and spreadsheets managed by project managers. But it is important to create a single, common view of a company's entire knowledge base with tools that can routinely and instantaneously match those employee skills to the pending projects.

An example of this is in practice today is the airline industry. In addition to planes, fuel, cargo and luggage, airlines have to assemble teams of pilots, flight attendants and maintenance personnel, and get them to the right place at the right time. Each employee has a skill level that is critical to the success of the flight. For example, you wouldn't want to put four brand-new flight attendants on the same flight. The same principles could be used for global law offices or accounting firms, where each employee has an area of expertise that can complete the puzzle for any given situation.

Making It Work
It sounds reasonable in theory, but in practice it's not without its challenges. For example, companies typically don't use the same terminology or language to describe a job function. There is no right or wrong answer, but these little nuances will provide obstacles in implementing an expertise-based network.

Another issue affects how labor pools are organized. Many businesses lack a universal governance model that categorizes labor pools by full time, part time, subcontractor and joint venture. This is essential in knowing what tasks employees can be assigned for a given opportunity. You don't want to sign up a part-time employee for a job that is going to take six months to complete, when a full-timer can do it in three.

The characteristics that make us human also pose a challenge. The one principal difference between getting the right person vs. the right product to the right place at the right time is that people transform themselves. Let's say on a flight home from a business trip I teach myself Java programming. This is a marketable skill, and it will be important for me to keep my profile updated as I learn these new skills.

People also don't like to travel constantly, so there is a cost structure that needs to be maintained. And, you are dealing with biology – people get fatigued and homesick. But by using the right algorithms, you could take these factors into account to ensure that you are most effectively utilizing your resources. Consider these steps before you start:

• Deploy a common and consistent skills taxonomy end-to-end to assess skills and talent across internal, external and sub-contracted personnel.
• Provide a single platform for comparing resource alternatives, to streamline the process for finding and procuring the most appropriate resource.
• Educate and communicate. It is essential in helping your employees understand the value and benefits.

In January 2004, IBM launched the Workforce Management Initiative. Comprised of three components, including an internal job bank, by the end of 2005, IBM will have a common expertise taxonomy to request, identify, assess and fulfill resource needs.

The Workforce Management Initiative will enable IBM to increase profitability and create a flexible resource pool, and allow it to adapt to changing business conditions and market needs in a much more efficient and structured manner. Already well underway, this past year it has reduced the cost of its services business by more than $2.4 billion and has increased the visibility of resource deployment, resulting in a 3 to 5 percent improvement in utilization.

Customers have thousands of options and in the on-demand era, advantage will flow to companies that can rapidly adapt to market and business realities – if you don't, your competitors will.

Harold Blake is director of work force optimization for the IBM integrated supply chain. For more information, contact csciacca@us. ibm.com.
 
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