Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P100 pot

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Games-Based E-Learning
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925
Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 3.17
A Survey of Competency
Management Software
Information Systems in the
Framework of Human
Resources Management
Alfonso Urquiza
Francisco de Vitoria University, Spain
ABSTRACT
One of the greatest surprises of the Internet
economy is that far from replacing people, the use
RIDGYDQFHGWHFKQRORJ\LVFRQ¿UPLQJWKDWWDOHQW
is the most valuable asset in today’s organizations.
In this context, competency management (CM)
software automation practices become the most
YDOXDEOHEXVLQHVVDSSURDFKWRGH¿QHPHDVXUH
and manage talent needs, the human capital of

the organization.This chapter’s position is that
CM process automation in competitive, knowl-
edge-intensive e-business oriented organizations
requires that information technology (IT) address
software strategy in a comprehensive human
resources management (HRM) framework. Core
competency management-related applications
are deployed in current corporate e-business
transformation processes in association with the
use of innovative employee—facing relations
management technology and reengineering most
HR transactional domain type of applications
in place.The chapter shows the CM software
evolution from a previous fragmented market
situation to a much more integrated scenario
in which best-of-breed single-function oriented
products preferences are now swiftly moving to
the enterprise resource planning (ERP) type of
architecture.
INTRODUCTION
As the Internet age transforms the way people
work and live, organizations keep continuously
embracing the new opportunities and challenges
926
A Survey of Competency Management Software Information Systems
JHQHUDWHGE\WKLVUHODWLYHO\UHFHQWDQGVLJQL¿FDQW
change, introducing a new knowledge revolution
(Nordstrom & Ridderstrale, 2000).
Today’s economy is creating a new breed of
³LQWHOOLJHQW´ RUJDQL]DWLRQV ZKHUH D YHU\ KLJK

percentage of the total workforce is comprised
of knowledge workers. In this context, the ability
to effectively manage human capital investments
becomes essential to ensure business success.
Organizations gain real advantages by applying
Internet technology to the measurement and man-
agement of their talent needs, the human capital
of the organization.
The long transition from traditional “personnel
administration” activities to most recent “human
resources (HR) management,” has meant an evolu-
tion from a purely functional to a process-oriented
approach in which all those activities associated
with the management of employment and work
relations are included (Boxall & Purcel, 2003).
Traditionally, organizations of any size or
activity used to focus primary attention on auto-
mating payroll & basic administrative functions.
Other administrative-required functions (like
recruiting, training, etc.) were largely assumed
and performed in a non-automated way, thus
creating large staff departmental units in these
areas, non-associated with the organization’s
primary business.
IT solutions at the time were not designed to
manage knowledge assets; they were focused on
managing physical assets. Individual employees
and managers used to call upon HR to satisfy
different kinds of requests. Individual employees
typically required tracking and processing per-

VRQDOLQIRUPDWLRQVXFKDVFRPSHQVDWLRQEHQH¿WV
or other related data. Managers required HR to
provide information on recruitment or training
services.
In recent HR management, the new e-business
context has transformed and automated most HR
RSHUDWLRQVWKXVJHQHUDWLQJDGGLWLRQDOHI¿FLHQF\
SURFHVVÀRZVDUHKDQGOHGOLNH³DXWRPDWHGWUDQVDF-
tions” and self-service functions appear, simplify-
ing individual employee/manager relations within
the organisation, automating administrative tasks
and enhancing task-driven routines formerly
performed by HR departments.
In the new ³human capital” (HC) paradigm,
it is not just about modeling and automating
³WDFWLFDO´+5IXQFWLRQV7ZRQHZGLPHQVLRQV
DUHLQWURGXFHG7KH¿UVWWRFRQVLGHULVWKDWDQHZ
role appears for HR: that of strategic asset (talent)
management. The second is that HR becomes
just another component in the organisation, like
¿QDQFLDOPDQDJHPHQWVXSSO\FKDLQPDQDJHPHQW
customer relations management, or IT, all of them
driven to produce a product or service that gener-
ates value to the customer (Laudon, 2004).
It is in this new, comprehensive management
context where competency management fully
GHYHORSVLWVHOIEHFRPLQJWKHLQWHJUDWLQJ³JOXH´
element in HC management systems (Sagi-Vela,
2004), thus reshaping today’s and future HR
management implementation strategies.

In the context of this work, competence is
understood as the set of knowledge, skills, and
DWWLWXGHVUHTXLUHGLQSHRSOHWRSHUIRUPDVSHFL¿F
WDVNLQDQ HI¿FLHQWZD\6DJL9HOD&0
is a comprehensive HR process that starts by
GH¿QLQJWKHUHTXLUHGRUJDQL]DWLRQDOFRPSHWHQ-
cies, assigns them to employees, observes them
through behaviour, asses them according to an
RUJDQL]DWLRQ¶VGH¿QHGYDOXHVDQGSHUPDQHQWO\
improves them (Levy-Leboyer, 1997). Unlike in
traditional transaction-oriented HR practices, a
CM strategy should pursue the following goals:
• Support business objectives, providing in-
formation to acquire, maintain, LQÀXHQFH,
develop, and retain the right employees.
• Align people, processes, and technology
around shared values.
• Measure the strategic value of human capital
investments.
• Anticipate human capital changes.
• Learn from industry-best practices, leverag-
ing benchmark data.
927
A Survey of Competency Management Software Information Systems
In today’s knowledge-intensive organizations,
competency management is not viewed just like
a new function associated with a single job topic
(learning, employee career development, etc.),
nor is it an additional responsibility, to be added
to the traditional list of activities that the orga-

nization expects to be accomplished by the HR
department.
Experience shows that effective CM strate-
gies succeed most when all HR processes in
operation—not just a portion of them, like career
development, performance management, or learn-
ing, for example—are reviewed and aligned to
the talent management vision, accomplishing a
real e-business transformation in organization’s
processes. This remains true even in situations
where CM strategies are focused to a limited ex-
tent in overall taskforce, applied only to strategic
level of employees within the organization (i.e.,
managers), which happens very often, particularly
in large-size organizations.
The main objective pursued in this chapter
UHÀHFWVWKLVEXVLQHVVUHDOLW\7KHUHLVQRWMXVWD
simple, unique solution that automates CM pro-
cess in an organization. CM is not an IT vendor
product; it is a full comprehensive strategy that
transforms the HR management function from a
mere, although mature, administrative level to a
strategic business alignment role.
This chapter’s proposed detailed position is
that, when it comes to implementing a CM strategy
in a competitive, knowledge-intensive e-business-
oriented organization, IT components in the three
areas showed in Figure 1 should be addressed (to
WKHH[WHQWSODFHGXSRQGH¿QHG&0GHSOR\PHQW
requirements) or sometimes re-engineered as a

‘combined’ operation:
The transactional domain type of applications
are not obviously related to CM functionality, but
some processes in this area require small re-en-
gineering enhancements to work in a CM driven
e-business environment. Functions included in the
employee life cycle domain are driven to enhance
employee value, core in CM deployment. Em-
ployee-facing relations management technology
deployment usually exceeds the scope of HR,
EXWWKHXVHRIVXFKWRROVVLJQL¿FDQWO\LPSURYHV
&0UHODWHGSURFHVVHI¿FLHQF\XVHRISDSHUDQG
forms-oriented types of activities are replaced
by Web-based self service processes, generating
Figure 1. HC key components in CM deployment strategies
HR Basic Transactional Domain
Employee Life Cycle Management:Strategic CM-related Domain
Employee- facing, Relations Domain
Career Development E-LearningPerformance Mangt.Competency Mangt.
E-Recruiting
Workforce Planning
& Analytics
Compensation
Reporting Payroll Time Management
Employee
Self-Service
Portal Technology,
Expert Finder
Manager
Self-Service

Employee-facing, Relation Domain
Employee Life Cycle Management: Strategic CM-related Domain
HR Basic Transactional Domain
Career Development
Competency Mangt.
Performance Mangt.
E-Recruiting
Workforce Planning
E-Learning
Compensation
928
A Survey of Competency Management Software Information Systems
VLJQL¿FDQWUHWXUQRQLQYHVWPHQW52,LQODUJH
organizations and employee satisfaction in online
experience.
In order to fully understand this chapter’s busi-
ness-oriented perspective, the rest of this chapter
is structured as follows:
The next section shows the background in
which this work is based, followed by an analysis
of IT industry response to the CM evolutionary
organizational requirements. Then, a character-
ization of most relevant HR processes is presented,
depicting inter-process relations, and supporting
and clarifying the proposed comprehensive ap-
proach to CM implementations. Finally, today’s
commercial CM-related technology scenario is
SUHVHQWHGIROORZHGE\IXWXUHWUHQGVDQG¿QDO
conclusions uncovered in this survey.
BACKGROUND

Competency management is considered by some
authors (Sagi-Vela, 2004) as a complementary
methodology to other related HR management
practices, such as emotional intelligence or,
more often, knowledge management. Knowledge
management (KM) is a very close concept to
CM, and technical literature (Alle, 1997) tends
to generate some confusion when analysing KM
and CM management systems.
In the scope of this work, KM management
systems are those directed to capture, analyze,
apply, and re-use organizations’ know-how, with
the objective of performing higher-quality busi-
ness processes at a lower cost and generating a
competitive advantage. CM systems’ focus is
on employee life cycle, covering competency
requirement analysis (Lindgren & Stenmark,
2002) and other related HR management topics,
such as personnel selection and compensation
(Sagi-Vela, 2004).
Contributions on KM designs and product
HYDOXDWLRQVDUHZLGHVSUHDGLQVFLHQWL¿FOLWHUDWXUH
(Benson & Standing, 2001; Friss, Azpiazu, &
Silva, 2004; Kamara, Anumbad, & Carrillo, 2002;
Rollet, 2003), but technical literature on CM is
V W L O OVF DU F HD Q GGH GLF DW HG W RV S HF L ¿F D UH DV  VXF K D V
organizations adjustment to CM (Lindgren, 2005)
or competency development (Hardless, 2005).
In addition to above, the software capability
maturity model initiatives (CMM I, 2002) have

been complemented by the Software Engineering
Institute with the people capability maturity model
3HRSOH&00&XUWLV+HÀH\0LOOHU
as the foundation for a model of best practices
in managing an organization’s workforce. And
Figure 2. The process areas in people CMM
929
A Survey of Competency Management Software Information Systems
competency management is obviously present in
YDULRXVVLJQL¿FDQWPeople-CMM process areas:
In this context, a CM software information
systems survey in the framework of a comprehen-
sive HR management process scenario might be
of great value in further CM software research,
for example, investigating compliance relation-
VKLSVEHWZHHQWKH¿YH3HRSOH&00HYROXWLRQDU\
maturity levels with CM market products research
and development.
COMPETENCY MANAGEMENT AND
THE SOFTWARE INDUSTRY
Today’s SW products and services marketplace in
the HR domain has been shaped in the last 25 years
by the business evolution described above.
It is no surprise to anyone that until the e-
business transformation with the arrival of the
Internet age during the late ’90s, HR businesses
have created a sort of IT industry
fragmented
market. There exist hundreds (if not thousands)
of different HR administration and management

solutions (payroll, learning, PM, CM, etc.) in
organizations around the globe. Some are global
market-oriented, other vertical cross-industry
oriented; most are local and country-driven so-
OXWLRQVDLPHG WRVDWLVI\ VSHFL¿FVLQJOHPDUNHW
demands.
In addition to the above situation, the amount
of in-house developments and custom-made
LPSOHPHQWDWLRQVROXWLRQVLQWKLV¿HOGIDUH[FHHGV
H[SHFWHG¿JXUHVFRPSDUHGWRRWKHUW\SHVRIVXS-
SRUWDSSOLFDWLRQVVXFKDV¿QDQFLDOVEXVLQHVV
analytics, and so forth.
But the above scenario is now changing very
fast today, and the e-business evolution is driv-
ing industry from the previous IT-fragmented
scenario to an extremely
concentrated one. The
vast majority of today’s large organizations (those
in which CM h
as the largest deployment potential)
are automating HR (or planning to do so) within
the scope of one out of three global, integrated
ERP products: SAP, PeopleSoft or Oracle
.
To better understand this evolution that is
reshaping the market in which CM software
progress takes place and is making many best of
breed stand-alone HCMS solutions disappear,
let’s apply a modern, innovative approach that is
useful to map organizations’ business require-

ments with information technology decisions.
The Meta Group Technology Analysts call it
portfolio management:
Independently of the economic environment,
a key challenge for IT professionals has been to
assess and permanently communicate the value
of IT investments to the business units.
Today’s advanced organizations don’t just
UHTXLUH D IXQFWLRQDO MXVWL¿FDWLRQ DQG D ³EXVL-
ness case” study to make a technology decision.
The portfolio management approach introduces
¿QDQFLDO LVVXHV WR DQ\ ,7 LQYHVWPHQW DV IRU
example:
Level of ULVNYHUVXVH[SHFWHGEHQH¿WVvalue: Just
OLNH D SXUH ¿QDQFLDO LQYHVWPHQW ,Q ,7SURMHFW
deployment time, magnitude of investment, and
so forth are taken into account.
Current fair value, at any time.
Expected life cycle: when will investment pay
off?
3HUFHLYHGUHODWLRQVKLSVGH¿QLQJWKH,7GRPDLQ
its platform, and architecture.
IT assets and projects are categorized as shown
in Figure 3.
7KHUXQJURZWUDQVIRUPFODVVL¿FDWLRQGH¿QHV
the primary goal for any IT project:
³Run the Business” investments are focused
to keep business operational (i.e., maintenance
contracts, utilities, etc.). Core spending is for
business-critical activities, like customer service,

930
A Survey of Competency Management Software Information Systems
sales ordering, and so forth. Non-discretionary
relates to organic growth in core IT assets (servers,
DBMS, etc.). Business risk is low and expected
reward usually medium to high.
³Grow the business” IT expenditure is ap-
plied to expand organization’s scope, in product
or services. Learning activities to develop new
skills fall in this category.
³Transform the business” initiatives are related
to opening new markets or issues having a major
impact on the current business model. Business
risks and expected rewards, in the last two cat-
egories, are both moderate to high. Organizations
sometimes afford the high risk (of unplanned
events) and expect also high reward in venture
initiatives, where speed is usually the way to
SURFHHGLHEHWKH¿UVWWRGHOLYHUDSURGXFW
The IT industry in most recent e-business
process transformations (that obviously ap-
plies to HR) drives SW product development &
projects investment decisions, analysing three
dimensions: investment business impact, cost
and performance expectations, and risk and op-
portunity appraisal.
There are many SW tools in the market to
analyse and manage IT portfolios: ProSight (
www.
prosight.com/solutions/software/

), Primavera
(
www.primavera.com/about/trillion.asp), Niku
(
www.niku.com/), and so forth. The example
in Figure 3 depicts a view of the different SW
implementations in place in an organization, as-
sociating the value and the risk dimension.
Now, if we apply portfolio management’s ap-
proach to HC management and CM, and clearly
understand IT’s decision-making process, current
technology scenario, and, also, expected trends
for the future, it will be much better understood.
For this purpose, we will analyse IT-phased
evolution, within the proposed HC framework in
which CM strategy develops in today’s advanced
organizations: the employee transactional, life
cycle management, and relations management
domains.
Figure 3. IT portfolio management methodology

3
© 2003 META Group, Inc., Stamford, CT-USA, +1 (203) 973-6700, metagroup.com
Risk
Transform
the
business
Risks
Value/Timing
Venture

Growth
Discretionary
Enhancements
Non-
Discretionary
Core
Run the

business
Grow the

business
Non-Discretionary IT

Costs
Discretionary
Projects
931
A Survey of Competency Management Software Information Systems
/HW¶V¿UVWIRFXVRQWKHHPSOR\HHWUDQVDFWLRQDO
domain. Traditionally, payroll and basic employee
administration services have been considered the
primary, core HR organization’s service. Mistakes
LQWKLVDUHDGRKDYHDFOHDU³GLVVDWLVI\LQJ´HIIHFW
thus damaging HR internal image. And particu-
larly in medium- to large-size organizations, some
VSHFL¿FSURFHVVLQJGLI¿FXOWLHVOHGWRSURPSW,7
automation: earning and deductions complexity
derived from different, concurrent labour agree-
ments to apply in single organizations, continu-

ous updates in country regulatory requirements,
JURVVWRQHWSHUPDQHQWFDOFXODWLRQVDQG¿QDOO\
banking reconcilement and automated interfaces
requirements.
3D\UROO WKHUHIRUH UDSLGO\ EHFDPH WKH ¿UVW
FRUH³run the business” type of investment in HR
PDQDJHPHQWSDUDOOHOWRRWKHUEDVLFEDFNRI¿FH
applications like accounting. Business risks were
low (processes are quite stable) and EHQH¿WV were
medium.
Other transaction-oriented processes fol-
lowed automation in a segregated manner, just
when business required the need due to growth,
changes in HR policy, merging events, and so
forth. Some of these processes were compensa-
WLRQDQGEHQH¿WVRUWLPHPDQDJHPHQWW\SLFDOO\
non-discretionary enhancements, low business
risks, and KLJKEHQH¿WV.
Initial market products’ scope was local, co-
existing with many made-to-measure solutions in
place. Outsourcing of services models began to
develop, particularly in the low- to medium-size
type of organizations.
Employee life cycle management is the primary
core domain for HC competency management
strategy deployment in any organization. Com-
petencies are created to manage organizations’
required talent across the employee life cycle:
Attract talent (e-recruiting) Î Assign talent
(workforce planning) Î,QÀXHQFH talent (perfor-

mance/compensation management) Î Develop-
ing talent (e-learning) and Î Retaining talent
(career & potential development).
Figure 4. ,7SRUWIROLRFODVVL¿FDWLRQH[DPSOH
Risk
Business Value
Alto
Bajo
Bajo
Alto
0
1
2
3
4
5
6
7
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RTB
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TTB
932
A Survey of Competency Management Software Information Systems
Although integrated solutions are the most
relevant implementation solutions in today’s IT
industry (see section “HC market applications:
The CM contribution”), stand-alone products are
also growing. We will shortly analyse performance
management and CM and E-Learning, these two

being the most relevant convergent solutions in
the CM market today.
a. Performance and competency manage
-
ment
Early non-integrated deployed performance
management (PM) systems were perceived by
employees as non-useful, time-wasting applica-
tions. It is not until the e-business transformation
SURFHVVJHQHUDWHGGXULQJWKHODVW¿YH\HDUVWKDW
organizations perceived real business impacts
in developing values and competencies, enhanc-
ing employees’ business alignment. Medium- to
large-size organizations started to create and track
measurable skills and competencies through the
deployment of advanced e-business-oriented PM
solutions. About 40% of large organizations have
DOUHDG\GH¿QHGFRPSHWHQFLHVIRUVRPHW\SHRI
MREV DQG  KDYH D ZHOOGH¿QHG HQWHUSULVH
wide set of competencies. And the IT market
today still has large expectations: 60% are still
non-automated, paper-based solutions, about 25%
in-house developments, and 10% product based
(PeopleSoft, SAP, Workscape, etc.).
&0VROXWLRQVDUHPRVWO\³
grow the business”
DQGWRDOHVVHUH[WHQW³
transform the business”
venture-type applications. Business risks and
reward are, typically, moderate to high.

b. E-learning
Early (1980s to mid 1990s) learning management
systems (LMS) were just tools driven to automate
instructor-led training activities. E-learning to-
day is somehow different. Cisco chairman John
&KDPEHUVVDLGLQ$XJXVWWKDW³the two great
equalizers in life are the Internet and education.”
More than 70 million people received education
over the Internet that year.
LMS’ most relevant change in the Internet
age is that employees now become themselves
responsible for their own learning requirements.
Training is delivered in a personalized way, thus
facilitating individual competency development
as required and planned by the organization.
IT’s e-learning products have a singularity
compared to the rest of HC applications related
to competency management implementations:
The LMS market is dominated by stand-alone
solutions. Platforms like Saba
(www.saba.
com/),Centra ( />resources/index.asp,%0¶V/RWXV³ZZZ
ibm.com/software/info/ ecatalog/es_ES/products/
N105931Y77809P74.html”),
and 70-plus more
represent today 95% of the total market, and just
5% (although growing) are tied to ERP-integrated
packages (i.e., SAP, PeopleSoft).
(OHDUQLQJVROXWLRQV¿WLQWRWKH³grow the
business” category. Business risks are moderate

and reward is, typically, moderate to high.
IT products in the employee relations manage-
ment domain don’t address or directly process
C M - r e l a t e d i n fo r m a t i o n . T h e y a r e v i e we d a s c om -
PXQLFDWLRQLQWHJUDWHGWRROVGULYHQWR³DXWRPDWH´
most (if not all) HC processes, as in other parallel
e-business environments. Typical applications
in this domain are employee self service (ESS),
P DQ D JHU VH O IVH U Y LF H 0 6 6 Z R UN ÀR Z DQ G H[S HU W
¿QGHUV/HW¶VVKRUWO\GHVFULEHWKHP
ESS are portal-driven solutions created to
ensure comprehensive and controlled employee
access to internal or external information and ap-
plications. Employee satisfaction and dramatic re-
duction in transaction cycle time over HC services
DUHSURYHQEHQH¿WVLQXVLQJWKLVWRROW\SLFDOO\
integrated within HR ERP application.
(663RUWDOVROXWLRQVDUHLQWKH³
grow the busi-
ness
” category. Business risks are moderate and
reward is, typically, moderate.
MSS technology and purpose is of the same
nature as ESS. The only difference is in the nature
933
A Survey of Competency Management Software Information Systems
of the type of applications that are relevant to this
type of employee’s role within the organization.
Managers require a single access point to infor-
mation, otherwise disseminated throughout the

organization. They manage people, budgets and
groups assigned responsibilities in an effective,
proactive way.
Figure 5. Generic structure of ESS portal implementation
24 October 2001 Copyright©2001 Iniciativa Terra Meta4you S.A. 6
?
Personal
Development
?
News & Events
?
Holidays
?
Shopping
?
Procurement
?
Markets
?
Resources
?
Bulletin
?
Projects
?
Knowledge
?
Career
Development
?

Metrics
?
E-Learning
?
Travel
?
Payroll
?
Competency Mngt.
?
Evaluation
?
Agenda
?
Comunications
?
Colaboration
?
Team Work
?
Knowledge Mng.
?
Interest Groups
La Solución
Figure 6. Example of a real ESS