Differentiated Management of IT Service Workers: Applying Segmentation Theory

Introduction

Information Technology (IT) work performed in organizations has been steadily transformed over recent decades by the specialist managerial approach of IT service management (ITSM) (Trusson et al., 2018). This form of ‘servitization’ has typically been applied to organizational IT functions (Conger, 2010) via ‘best practices’ that have remained compatible with those ‘best practices’ commonly associated with IT project management (ITPM) (Hughes et al., 2019). Central to this compatibility is the drive to manage efficiently across a system development lifecycle. ITSM ‘best practices’ extend this beyond development and implementation to ongoing operations of the services enabled by the delivered IT systems (Tarhanidis, 2011). The techniques of ITPM and ITSM often overlap since functioning organizational IT systems typically require maintenance and enhancements via processes of change, problem and incident management. These may entail control being asserted by IT project managers and/or IT service managers.

The embracing of a ‘service’ management (over a technology management) mindset has implications for the management of IT workers. While the literature has noted the importance of applying focus on such workers when implementing an IT servitization strategy (Blumberg et al., 2019), it has not addressed how that might be aligned with Human Resource Management (HRM) strategy to optimize people performance. By collecting data that throws light on the IT work that is performed in servitized IT functions, this study addresses this gap in the literature. It does so by drawing on segmentation theory to (re-)consider how IT managers might manage their servitized staff with greater flexibility, in order to optimize performance. Taking the perspective of Newell et al. (2002, p. 69), that IT workers, as knowledge workers, “represent an investment for the business“, this paper explores how they might be segmented so that the return on investment in their labour might be optimized. As such the study addresses the following research question:

• RQ1: How might IT workers in the servitized IT function be usefully segmented so that flexible people management practices might be employed to optimize performance?

The starting point for this study is an assumption that, if more targeted people management practices were implemented with the objective of optimising the development and engagement of IT service workers, then competitive advantage should result (Hawk et al., 2012) via “incremental… improvements in service quality, operational efficiency and business continuity” (Cannon, 2011, p. 7). The objective of the article is to present the segmentation of IT workers operating in servitized IT functions into distinct groupings for differentiated people management.

The paper is structured as follows. The next section is a literature review to frame the study. This section comprises three sub-sections that discuss the ‘service turn’ in organizational IT work and its relationship to ITPM, traditional approaches to managing IT workers, and segmentation theory. The qualitative research methods employed are then explained and justified. After this, the research findings are presented thematically leading to the assertion of a theoretical typology of IT service worker ‘segments’ that are identifiable within servitized IT functions. In the discussion section that follows this, the relevance of this schema is made clear. Drawing on the literature relating to good practice on managing different groups of workers (particularly knowledge workers and service workers), a segmented approach to flexibly managing IT workers working in servitized IT functions is presented as an empirically founded framework. The paper concludes by articulating the contribution the study makes to the practitioner-oriented academic literature relating to the management of IT workers.