Essays / Part I The following article is the first in a six-part series, written by Tom Coyner, President of Soft Landing Korea Ltd.... Ed. The Korean information systems (IS) industry is unique. It mainly consists of specialists often found within very large customer organizations, largely staffed by generalists. Like anywhere, there are both good and bad points that together dish up challenges. At the risk of stereotyping, I will try to describe the lie of the land in the IS industry from the perspective of a software vendor. Characteristics of Modern Korea There is a national compulsion to be Number One. Also, Koreans rightly pride themselves on their IS knowledge and skills, with one of the highest number of information specialists per capita in the world. These IS professionals often find themselves working for companies driven in part by a desire to have the latest, the best, and thereby be the most competitive. Korea remains and perhaps is becoming even more nationalist than ever. Out of national pride, there is a strong temptation to do it on their own - without foreign assistance. I have labeled this mentality as "IS Juche" after the North Korean economic-political theory of being independent of outside dependencies. Like Juche of the North, IS Juche has a strong emotional appeal but sometimes comes up lacking when it comes to selecting and implementing the ideal or even appropriate solution. Korean organizations tend to be factionalized around strong personalities who compete within the organization for position, power and survival. This in turns creates silos of information that are often more political than technical. These personality-centered power structures create an aura of uniqueness - even when there is little substantial differentiation with the external competition. Korea impresses foreigners daily with a society seemingly always in a hurry. Without question, Korea has one of the most competitive societies in the world. Koreans are among the best educated in the sciences - at the expense of liberal arts where rote learning is less applicable. All of this leads Koreans to be early - often first - adapters, but often slipshod in implementation. This approach to often reckless adoption can be traced to what I call the "Pak-sa (or Ph.D.) Mentality" that has been a part of the Korean consciousness for many years. That is, there is a traditional reluctance to admit inadequate knowledge in this highly competitive environment. It is no wonder that South Korea has the highest per capita Ph.Ds in the world. In any event, Koreans are wellknown to be quick to study - and quick to proclaim mastery of a subject matter. Once a new pak-sa appears to have mastered a new subject within his or her organization, that person often becomes highly resistant to outside advice and intervention. "It's Technical" Organizations routinely go through reorganizations formally once a year and often more frequently, depending on business conditions. General managers as they approach middle age can expect dealing with the "promote or out" paradigm. For the survivors, the higher one climbs, the more likely for a lateral transfer. As a result, most supervising executives of IS have an inadequate understanding of their subordinates' work beyond general management considerations. IS departments are perhaps the most extreme since they are often the sole technology centers of the company and beyond the comprehension of most executives. Yet IS executives do share common major political considerations with their peers: headcount, budget size, operational impact on the overall organization, etc. Meanwhile, the true IS professionals work in relatively isolated supervision and are content that their supervisors are largely ignorant of what they are doing. Price, Price, Price Operations are usually price driven - rarely value or even genuine ROI managed. It is not that individual managers are unaware or unconcerned, but often large organizations are staffed by ageing general managers quietly desperate to display their importance to the overall company by demonstrating that they will tangibly and visibly lower costs - i.e., increase their value to the company. As a result, vendors normally compete on function and price - often in the "order taking" capacity rather than selling. This is inherent to the traditional approach of selling in Korea. So the vendors are ultimately responsible in part for the preoccupation of price over value. The finance and purchasing departments are generally ill-equipped to evaluate technology acquisitions and consequently push for the cheapest option. Consequently, there is a strong temptation to beat down the vendors' prices or to grow the scale of a project beyond vendor profitability as a way, once again, to prove to others in the company either they are superior managers of vendors, or to cover the fact they too narrowly defined the project in order to reduce the price. Often the beginning of the end for many new vendors is getting their first contracts with a large client. Often these start-up firms go bankrupt due to the associated costs from project creep. In the end, their demise results in the lack of external support, thus causing IS departments to justify expansion in head count to create internal support of acquired, now unsupported, technology. In time, some companies conclude that it may make more sense to hire more engineers to reinvent the wheel since vendors cannot be trusted to adequately support their needs. Self-made Steam Shovels Due to a combination of "IS Juche," "pak-sa mentality," and "we are unique," there is a strong tendency among large Korean companies to build a steam shovel rather than buy a somewhat expensive trowel. Building their own solutions often results in a strong pride in selfdevelopment that also incidentally brings along job security. Only the architects and builders really understand the nature of these homegrown systems and often only they understand how these systems integrate with other systems. The net results within many large Korean companies are very large - and inefficient - systems that may require extraordinary resources to maintain. Moving on to the Next Generation There is a trend with many large companies to have their IS departments request every four or five years the overall haul of mission critical systems. Officially, the rationale is the company needs the latest technology to remain competitive. Actually, too often the IS departments have created through internal development software houses of cards. Given the ongoing pressures to make changes in the software as business and other demands dictate, often modifications are undocumented, resulting in "spaghetti" code that requires extensive regression testing to ensure that new changes will not bring the systems down. Because of face of the company pak-sa, next generation systems must comply in functionality and sometimes in design with prior systems - no matter how illogical or inefficient. This practice has resulted in what many regard as "Korean-style" systems that are often mistaken by employees as a reflection of "our company's unique way" of doing business. What Does the IS Industry Teach About Korean Business Most IS departments and businesses operate with relatively large numbers of people working extraordinarily hard for extraordinarily long hours. Yet, this too is changing. As the Korean economy opens up to world-class competition and as the economy has its periodic business slow downs, Korean companies have been reevaluating their hiring strategies and are keener than ever for increased efficiencies. Given this, Korean companies are looking more aggressively for new ideas and sometimes new technologies from abroad. The open question is how fast each company will move forward, given each organization's traditions and culture.