Abstract
This case study invites students to discuss strategic value creation through the use of information technology (IT). It raises issues of business model innovation, IT strategy, digital platforms, ecosystems, business-IT alignment, and leadership. The key character in the case is the Chief Information Officer, Paul Danneels, who is ready to drive the strategic transformation of the VDAB, the Flemish Employment Agency, from a service provider to a labor market conductor. Starting from a firm understanding of the VDAB’s strategic choices, students should be able to discuss the positioning and role of the IT department as well as its views on value delivery.
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Notes
Belgium has four public employment services: one for the Flemish region, one for the Walloon region, one for the Brussels region, and one for the German-speaking community.
In an increasingly globalized labor market, the VDAB would need to be credible as a partner, not only in Flanders, but also in Europe, if not worldwide. The business model innovation at the VDAB was not an isolated initiative but fitted into a wider European context, in which it positioned itself as a frontrunner. During the Belgian presidency of the European Union (1st July 2010 through 30th December 2010), the VDAB was actively involved in drafting the PES 2020 Strategy Output Paper, presenting the common strategy for the future, endorsed by all European Public Employment Services. The strategy paper was approved in December 2011 and described the changes in the role and function of Public Employment Services that would be necessary in view of the implementation of the EU 2020 strategy, taking into account the contextual changes as well as the changes in the labor market and in the way public services providers would have to operate. The recommended business model and service delivery described in the paper implied a shift from labor market actor to labor market conductor, which was consistent with the strategic choices made at the VDAB.
The acronym VONK stands for V DAB o p n ieuwe k oers, or VDAB embarking on a new course. The Dutch word vonk means spark.
This budget does not include fixed VDAB personnel costs.
That is testing and the management of the development environment were also taken care of on a project level.
Scrum is an iterative and incremental agile software development method for managing software projects and product or application development. It emphasizes working principles such as co-location of team members, daily meetings, timeboxing, and incremental development.
ITSM: IT Service Management.
PDP stands for Personal Development Plan (in Dutch POP – Persoonlijk Ontwikkelings Plan). On 19th January 2009, the Flemish government and the social partners, that is the employer organizations and trade unions represented in the Flemish Socio-Economic Council, signed a new mission statement, Pact 2020, which defines a range of policy goals for 2020 for the Flanders region. In line with the European Lisbon Strategy objectives, the region wants to be among Europe’s top five regions in relation to innovation, employment, social cohesion, and sustainability. Pact 2020 stipulates that every citizen is entitled to a personal development plan to effectively facilitate and support lifelong and life-wide learning and to enhance inclusion in the labor market.
An index of competencies according to the French system ROME (R épertoire O pérationnel des M étiers et des E mplois).
A global survey, undertaken among C-level executives by a leading strategic management consultancy firm in April 2012, had identified consensus on the three key trends in digital business to be (1) big data and analytics, (2) digital marketing and social media tools, and (3) the use of new and flexible delivery platforms such as cloud computing and mobility.
Google Apps is a cloud-based messaging and collaboration platform. It includes web-based e-mail, calendars, document creation and sharing, and other applications (see Appendix E).
Cloud computing refers to both the applications delivered as services over the Internet and the hardware and systems software in the datacenters that provide those services. The services themselves have long been referred to as Software as a Service (SaaS). The datacenter hardware and software is what we will call a Cloud. When a Cloud is made available in a pay-as-you-go manner to the general public, we call it a Public Cloud; the service being sold is Utility Computing. Source: Armbrust et al. (2010).
This means they did not have to follow standard project processes and approval procedures.
Employability is the capability to move self-sufficiently within the labor market to realize potential through sustainable employment. For individuals, employability depends on (1) the knowledge, skills, and attitudes they possess, (2) the way they use those assets and (3) present them to employers, and (4) the context within which they seek work (e.g. personal circumstances and labor market environment). Source: Hillage and Pollard (1998).
References
Armbrust, M., Fox, A., Griffith, R., Joseph, A.D., Katz, R., Konwinski, A., Lee, G., Patterson, D., Rabkin, A., Stoica, I. and Zaharia, M . (2010). A View of Cloud Computing, Communications of the ACM 53 (4): 50–58.
Hillage, J. and Pollard, E . (1998). Employability: Developing a framework for policy analysis. Research Report RR85, Department for Education and Employment.
Acknowledgements
This case was made possible with the support of the Deloitte Chair of ‘Bringing IT to Board Level’ at Vlerick Business School. We also thank the Intercollegiate Centre for Management Science (ICM) for their support in writing this case.
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Appendices
Appendix A
Big VDAB?
On 2nd May 2012, the Human Rights League, together with non-profit organizations Werkwijzer (an independent employment service) and De Lege Portemonnees (Empty Wallets), organized a debate about privacy and freedom of job choice. Fons Leroy, CEO of the VDAB, debated with representatives from the Privacy Commission, academia, and trade unions.
Below is the poster announcing the debate: Figure A1.
English translation of poster announcing debate (original version in Dutch).Source: VDAB company documentation.
Appendix B
VDAB facts and figures
As at 31st December 2011, the VDAB had 4986 employees, with 17% working in Central Services, and the remaining 83% (counselors, account managers, and instructors) spread over the 68 training centers and 360 one-stop-job shops.
In 2011, the VDAB registered 409,910 job seekers. Just under half of these registered online; the others were registered by a counselor. The VDAB processed 307,423 vacancies, 84.3% of which were filled.
There were 5,124,815 contacts with companies (employers): 453,000 face-to-face, 1,129,463 via the call center, and 3,542,332 online consultations of résumés. The VDAB, together with its partners, organized 73,238 coaching programs and 19,115 mediation programs for job seekers. 58,496 individuals (job seekers and working professionals) completed a training course at the VDAB or one of its partners, representing a total of 14,418,085 h of training.
The total budget for 2012 was 547 million euros.
Source: VDAB 2011 Annual Report and company presentation.
Appendix C
The labor market ecosystem and its actors
The labor market is an ecosystem with many participants or actors, each with specific needs and priorities.
Individuals
Individuals participate in the labor market because they need a job and/or wish to improve their employability,Footnote 14 that is the capability to gain and retain employment, either paid or unpaid. Derived needs are training and development, validation of personal information (e.g. diplomas or certificates) and access to accurate, objective information about the labor market (e.g. macro-economic demand and the pattern and level of job openings, regulation and benefit rules, and employer recruitment and selection behavior).
Employers
The needs of employers can be summarized as the need for qualified, employable personnel, that is personnel with the right knowledge, skills, and attitudes for the jobs in question. Derived needs are training and development as well as access to accurate and objective information about the labor market in which they wish to participate.
Others
Other actors in the labor market ecosystem include private staffing and recruitment agencies, educational institutions such as schools, colleges, universities, and other training providers, the government (policymakers), as well as youth organizations and other community groups in the sociocultural sector. Indeed, social and cultural organizations play an increasingly important role in lifelong and life-wide learning. Individuals can go to officially accredited organizations for career and personal guidance. The challenge policymakers then face in supporting lifelong career path guidance for all citizens is to streamline the organizations that are accredited to assess people to certify their non-formal and informal learning.
The VDAB
The VDAB is a network organization in this ecosystem of different actors. As a service provider, it fills the gaps left by the market (e.g. by providing training for jobs on the shortage occupation list, or services for specific target groups such as low-skilled workers, disabled people, and older workers). As a conductor, the VDAB facilitates individuals in developing their ideal careers themselves as far as possible. It also stimulates and enables interaction with other stakeholders, ideally with minimum intervention.
Appendix D
See Figure D1.
IT Department – Organization May 2012. Source: VDAB company documentation.
Appendix E
Google Apps
See Figure E1
Google Apps - a suite of collaboration tools.Source: VDAB company documentation.
Google Apps is a suite of collaboration tools, combining several of Google’s messaging and collaboration applications.
For more information, see http://www.google.com/enterprise/apps/business/
Appendix F
Google Apps – Budgeted and actual cost savings
See Table F1.
Potential annual cost savings if e-mail and calendar are ‘moved to the cloud’ (i.e. migration of Groupwise to Google Apps): 150,000 euros (e).
Taking into account the necessary modifications to Groupwise, the potential cost savings of a migration to Google Apps would amount to 513,000 euros (f).
The actual cost savings proved to be even more significant (situation August 2012): the actual annual costs for Google Apps amounted to 215,000 euros (including extension to 6000 users):
See Table F2.
Moreover, additional annual cost savings of 650,000 euros were achieved by canceling the MS Office license maintenance (the VDAB would continue to use MS Office 2010 without upgrades).
Appendix G
Virtual job fair Portugal – screen shot of home page as it appeared on 10/11th May 2012.Source: VDAB company documentation.
On 10/11th May 2012, the Engineering Mobility days took place in Lisbon. This international job fair focused on IT and engineering profiles, and was organized by the Portuguese public employment service. The VDAB attended the event, together with a delegation of 22 Flemish companies. In addition, 11 Flemish employers participated in the virtual online job fair set up by the VDAB.
The online job fair functionality included the following:
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Each participating company was represented by its logo.
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Clicking on a logo would open the virtual booth of each company, where job seekers could browse the company’s vacancies, apply for specific jobs, and submit their résumé (linked to a specific job offer) directly to the company’s mailbox.
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All employers participating in the virtual job fair had created a Google+ page that was accessible via the Google+ icon at the top of their virtual booth page.
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Employers could schedule a meeting with the candidates of their choice. Selected candidates would receive an e-mail message with a link to the online chat module of Google+. All that was needed to participate in an online meeting was a Google account or a Gmail account.
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Viaene, S., Broeckx, S. How IT enables business model innovation at the VDAB. J Info Technol Teach Cases 3, 78–87 (2013). https://doi.org/10.1057/jittc.2013.6
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DOI: https://doi.org/10.1057/jittc.2013.6