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(2003). Video games in education. International Journal of Intelligent Simulations and Gaming, 2(1), 49-62. Stoll, C. (1999). +LJKWHFKKHUHWLF²UHÀHFWLRQVRI a computer contrarian. New York: First Anchor Books. Taylor, J., Rodden, T., Anderson, A., Sharples, M., Luckin, R., Conole, G., & Siraj-Blatchford, J. (2004). An e-learning research agenda. Engineer- ing and Physical Sciences Research Council. Timms, D. (2001). eLearning—back to the future. Lund Keynote. Retrieved November 14, 2005 from http://www.odeluce.stir.ac.uk/docs/Lund- Keynote.pdf This work was previously published in Social Implications and Challenges of E-Business, edited by F. Li, pp. 42-56, copyright 2007 by Information Science Reference (an imprint of IGI Global). 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 RIDGYDQFHGWHFKQRORJ\LVFRQ¿UPLQJWKDWWDOHQW is the most valuable asset in today’s organizations. In this context, competency management (CM) software automation practices become the most YDOXDEOHEXVLQHVVDSSURDFKWRGH¿QHPHDVXUH 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 JHQHUDWHGE\WKLVUHODWLYHO\UHFHQWDQGVLJQL¿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- VRQDOLQIRUPDWLRQVXFKDVFRPSHQVDWLRQEHQH¿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 RSHUDWLRQVWKXVJHQHUDWLQJDGGLWLRQDOHI¿FLHQF\ SURFHVVÀRZVDUHKDQGOHGOLNH³DXWRPDWHGWUDQVDF- 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´+5IXQFWLRQV7ZRQHZGLPHQVLRQV DUHLQWURGXFHG7KH¿UVWWRFRQVLGHULVWKDWDQHZ role appears for HR: that of strategic asset (talent) management. The second is that HR becomes just another component in the organisation, like ¿QDQFLDOPDQDJHPHQWVXSSO\FKDLQPDQDJHPHQW 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 GHYHORSVLWVHOIEHFRPLQJWKHLQWHJUDWLQJ³JOXH´ 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 DWWLWXGHVUHTXLUHGLQSHRSOHWRSHUIRUPDVSHFL¿F WDVNLQDQ HI¿FLHQWZD\6DJL9HOD&0 is a comprehensive HR process that starts by GH¿QLQJWKHUHTXLUHGRUJDQL]DWLRQDOFRPSHWHQ- cies, assigns them to employees, observes them through behaviour, asses them according to an RUJDQL]DWLRQ¶VGH¿QHGYDOXHVDQGSHUPDQHQWO\ 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 UHÀHFWVWKLVEXVLQHVVUHDOLW\7KHUHLVQRWMXVWD 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 WKHH[WHQWSODFHGXSRQGH¿QHG&0GHSOR\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, EXWWKHXVHRIVXFKWRROVVLJQL¿FDQWO\LPSURYHV &0UHODWHGSURFHVVHI¿FLHQF\XVHRISDSHUDQG 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¿FDQWUHWXUQRQLQYHVWPHQW52,LQODUJH 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 SUHVHQWHGIROORZHGE\IXWXUHWUHQGVDQG¿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 HYDOXDWLRQVDUHZLGHVSUHDGLQVFLHQWL¿FOLWHUDWXUH (Benson & Standing, 2001; Friss, Azpiazu, & Silva, 2004; Kamara, Anumbad, & Carrillo, 2002; Rollet, 2003), but technical literature on CM is V W L O OVF DU F HD Q GGH GLF DW HG W RV 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 YDULRXVVLJQL¿FDQWPeople-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- VKLSVEHWZHHQWKH¿YH3HRSOH&00HYROXWLRQDU\ 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- OXWLRQVDLPHG WRVDWLVI\ VSHFL¿FVLQJOHPDUNHW demands. In addition to the above situation, the amount of in-house developments and custom-made LPSOHPHQWDWLRQVROXWLRQVLQWKLV¿HOGIDUH[FHHGV H[SHFWHG¿JXUHVFRPSDUHGWRRWKHUW\SHVRIVXS- SRUWDSSOLFDWLRQVVXFKDV¿QDQFLDOVEXVLQHVV 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 ULVNYHUVXVH[SHFWHGEHQH¿WVvalue: Just OLNH D SXUH ¿QDQFLDO LQYHVWPHQW ,Q ,7SURMHFW 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? 3HUFHLYHGUHODWLRQVKLSVGH¿QLQJWKH,7GRPDLQ its platform, and architecture. IT assets and projects are categorized as shown in Figure 3. 7KHUXQJURZWUDQVIRUPFODVVL¿FDWLRQGH¿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 SURFHHGLHEHWKH¿UVWWRGHOLYHUDSURGXFW 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¿UVWIRFXVRQWKHHPSOR\HHWUDQVDFWLRQDO domain. Traditionally, payroll and basic employee administration services have been considered the primary, core HR organization’s service. Mistakes LQWKLVDUHDGRKDYHDFOHDU³GLVVDWLVI\LQJ´HIIHFW thus damaging HR internal image. And particu- larly in medium- to large-size organizations, some VSHFL¿FSURFHVVLQJGLI¿FXOWLHVOHGWRSURPSW,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, JURVVWRQHWSHUPDQHQWFDOFXODWLRQVDQG¿QDOO\ banking reconcilement and automated interfaces requirements. 3D\UROO WKHUHIRUH UDSLGO\ EHFDPH WKH ¿UVW FRUH³run the business” type of investment in HR PDQDJHPHQWSDUDOOHOWRRWKHUEDVLFEDFNRI¿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- WLRQDQGEHQH¿WVRUWLPHPDQDJHPHQWW\SLFDOO\ non-discretionary enhancements, low business risks, and KLJKEHQH¿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. ,7SRUWIROLRFODVVL¿FDWLRQH[DPSOH Risk Business Value Alto Bajo Bajo Alto 0 1 2 3 4 5 6 7 012345678 RTB GTB 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 SURFHVVJHQHUDWHGGXULQJWKHODVW¿YH\HDUVWKDW 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¿QHGFRPSHWHQFLHVIRUVRPHW\SHRI MREV DQG KDYH D ZHOOGH¿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.). &0VROXWLRQVDUHPRVWO\³ grow the business” DQGWRDOHVVHUH[WHQW³ 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 &KDPEHUVVDLGLQ$XJXVWWKDW³the 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 (http://www.centra.com/education/ resources/index.asp,%0¶V/RWXV³ZZZ 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). (OHDUQLQJVROXWLRQV¿WLQWRWKH³grow 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 - PXQLFDWLRQLQWHJUDWHGWRROVGULYHQWR³DXWRPDWH´ 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 IVH U Y LF H 0 6 6 Z R UN ÀR Z DQ G H[S HU W ¿QGHUV/HW¶VVKRUWO\GHVFULEHWKHP 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 DUHSURYHQEHQH¿WVLQXVLQJWKLVWRROW\SLFDOO\ integrated within HR ERP application. (663RUWDOVROXWLRQVDUHLQWKH³ 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 . 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/ ),. 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. 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