Build, Buy or Rent Equation

For large organizations like SAS, knowing what is coming down the pipeline and doing the sums on the build, buy or rent equation is relatively easy. Hacy Tobias, currently general manager people and performance, for mining firm Ausenco, says she was the Asia Pacific human resource director for SAS for four years. The most effective organizations, she says, work hard to develop a multi-pronged approach to skills management. Since the skills shortage means they will never be able to rent or buy enough talent, such organizations grow their own whenever possible, often by putting development programs in place. For instance, Tobias points out it can take a year to learn SAS code, so it makes sense for that company to hire new people and grow them, and to work out ways to fast-track their development in order to have core competencies reside in the organization.

She urges organizations never to forget that while using contractors might often prove essential, their tendency to flit from job to job means they are prone to disengage four months into a six-month job as they look for the next opportunity. "What's the solution to that? I would only use contractors personally as a top-up in peak times," Tobias says. "Just as in the power industry you have base load and then you use gas for the peaks; with no disrespect to contractors, that's when I would be using them."

However, Accenture's Curtis points out that for many organizations the "build" part of the equation is often constrained by the availability of local talent at the right price point. "It used to be the case that the CIO could look at the capabilities in-house and say: 'Ideally, I would like to build ABC and buy XYZ'," Curtis says. "With extremely rare exceptions that is simply not available as a planning assumption these days. So the local availability of talent at the right price point or lack thereof, which is sort of a binary distribution, turns out to be the controlling element almost always, especially in developing or smaller economies.

"When there is talent available at whatever the right price point is, and that varies usually depending on the need and the nature of the role and the company, the decision tends to be around the need to maintain a long-term knowledge base or long-term skills base," he says.

Curtis advises organizations to distinguish between areas that are less volatile but where the value of the skill or the role lies largely in the longer term knowledge base, and areas where technologies are moving so rapidly that "almost every time you look around you see a new way of doing things which may be important to delivering value to the business". For instance, when it comes to legacy systems and legacy software, where documentation and other methods might be lacking and where having a history with the code base of the legacy applications, specific technologies and integration techniques and architecture are important, it makes sense to build that into the fabric of the skills base in the organization whenever possible. In the case of rapidly-evolving mobile technologies it is arguably better to rent or buy talent because of the number of companies offering expertise in the area, some of which boast a very large base of people with mastery in brand new technologies as part of their raison d'etre.