1904
Doing International Business Online for the Small and Medium Enterprise
15
For example, PayPal’s User Agreement (No-
vember 2, 2006) states the steps necessary
dispute a charge. />cgi-bin/webscr?cmd=p/gen/ua/policy_buy-
er_complaint-outside (accessed December
9, 2006).
16
PayPal Transaction Fees for Cross-Border
Payments—United States, https://www.
paypal.com/us/cgi-bin/webscr (accessed
December 9, 2006).
17

(accessed December 9, 2006).
18
The party is not a person but normally
computer software.
19

20

21

22
The full case can be found at http://www.
ombuds.org/narrative1.html
23
/>aboutus.jsp, Retrieved December 9, 2006.
This work was previously published in Cyberlaw for Global E-business: Finance, Payments, and Dispute Resolution, edited

by T. Kubota, pp. 195-209, copyright 2008 by Information Science Reference (an imprint of IGI Global).
1905
Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 6.12
Competence of Information
Technology Professionals
in Internet-Based Ventures
Tobias Kollmann
University of Duisburg-Essen, Germany
Matthias Häsel
University of Duisburg-Essen, Germany
ABSTRACT
This chapter articulates the knowledge and
skills required by IT professionals in young
,QWHUQHWEDVHG¿UPV%XLOGLQJRQWKHJHQHUDO,7
governance principle of aligning business and
IT, it introduces an adequate competence model,
outlines its dimensions, and suggests a framework
for modeling the effects of factors internal and
H[WHUQDOWRWKH¿UPRQWKHYDOXHSURSRVLWLRQVRI
the different dimensions. The authors hope that
a comprehensive understanding of the role of IT-
related competence will assist founders not only
LQ¿QGLQJVXLWDEOHSDUWQHUVEXWDOVRLQDOLJQLQJ
e-business strategy and information technology
in Internet-based ventures.
INTRODUCTION
The growing relevance of information technol-
ogy (IT) and, in particular, the proliferation of
the Internet, has resulted in a new economic

dimension that is characterized by new possibili-
ties of creating value (Lumpkin & Dess, 2004).
The so-called Net Economy inevitably facilitates
various possibilities for developing innovative
business concepts and realizing them by founding
a new company (Kollmann, 2006; Kollmann &
Häsel, 2006). In newly found ventures, founder
FRPSHWHQFH UHSUHVHQWV D VLJQL¿FDQW SUHFHGLQJ
indicator for success (Baum, Locke & Smith,
2001; Chandler & Jansen, 1992). Internet-based
ventures are mostly established by heterogeneous
teams of founders incorporating knowledge and
1906
Competence of Information Technology Professionals in Internet-Based Ventures
skills from both the areas of business adminis-
tration and information technology (Kollmann,
2006; Kollmann & Häsel, 2007). In particular,
the founding team usually comprises at least one
partner with a business background and one IT
professional, as obtaining the required competence
from external market participants is oftentimes
XQIHDVLEOHGXHWRDODFNRI¿QDQFLDOUHVRXUFHV
From an IT governance perspective, the choices
regarding the acquisition, training and develop-
ment of the individual competencies required
to effectively manage and operate the IT infra-
structure are of particular interest (Henderson &
Venkatraman, 1999; Van Grembergen, De Haas &
Guldentops, 2004). In fact, one important element
of IT governance is the governance of human IT

resources, that is, the knowledge and skills held
E\ W KH , 7 H P S O R\ H H V RI W K H ¿ U P * R W WV F K D O N      
:HLOO5RVV$OWKRXJKWKHGH¿QLWLRQVRI
IT governance differ on some aspects, they are
all focused on the link between business and IT
(Van Grembergen et al., 2004). Within the Net
Economy, IT governance is more complex than
the traditional alignment of business and IT, as
IT is integrated into business activity and thus
the technological, managerial and organizational
LQÀXHQFHVRIHEXVLQHVVQHHGWREHXQGHUVWRRG
(Patel, 2004). Accordingly, to explain success-
ful venturing activities in the Net Economy, a
comprehensive understanding of the various
competencies involved is required. In practice,
a deeper competence understanding could assist
IRX QGH U VQRWRQ O\ L Q ¿ QG L QJ VX LW D EOHS D U W QH U V EXW
also in aligning e-business strategy and informa-
tion technology.
From a researcher’s perspective, the com-
petence of IT professionals in Internet-based
ventures is largely unexplored. Although entre-
preneurship scholars have intensively explored
the concept of competence among entrepreneurs
and its various dimensions (Chandler & Jansen,
1992; Chandler & Hanks, 1994; Man, 2002),
these competence concepts fail to describe the
YDULRXV¿HOGVRISURIHVVLRQDONQRZOHGJHUHTXLUHG
by IT professionals in Internet-based ventures.
In a broader context, information systems (IS)

literature has widely elaborated on IT/IS-related
competence concepts, including the skills and
knowledge required by IS professionals (Lee,
Trauth & Farwell, 1995), the business competence
of IT professionals (Bassellier & Benbasat, 2004),
the IT competence of business managers (Bassel-
lier, Benbasat & Reich, 2003), the competence of
CIOs (Earl & Feeny, 1994) as well as the core IS
capabilities on an organizational level (Feeny &
Willcocks, 1998). However, studies such as these
display on a more general approach of describing
IT/IS-related competence and fail in capturing
the particularities that IT professionals experi-
ence in Net Economy founding teams. In this
regard, a number of authors point out that there
is a lack of studies on the competencies that are
required in e-business environments (Matlay,
2004; Sgobbi, 2002).
Similarly, questions of IT governance in the
context of Internet-based ventures have not been
answered yet (Peterson, 2004). In particular,
despite the fact that Internet-based businesses
are highly dependent on information technology,
the value proposition of IT-related competencies
remains unclear. While the strategic role of the
CIO is widely recognized in IS literature (Hen-
derson & Venkatraman, 1999; Sambamurthy,
Bharadwaj & Grover, 2003), this is not the case
for IT professionals engaged in co-founding
Internet-based ventures. Human capital theory

suggests that the potential value contribution of
a partner depends on her competence to solve
the tasks and problems that are connected with
KHUMRESUR¿OH<RXQGW6QHOO'HDQ-U/HSDN
1996). In this connection, a matter of particular
interest is how business and IT people actually
contribute to value creation and how they perceive
the contribution of their distinct competencies, as
in practice – despite the fact that both business
and IT people contribute essential competence to
WKH¿UP.ROOPDQQ+lVHO±DQXQHTXDO
distribution of shares can be observed in many
1907
Competence of Information Technology Professionals in Internet-Based Ventures
Internet-based ventures. In this particular context,
a missing awareness of critical competencies may
lead to disturbances in venture performance if
partners perceive their individual remuneration
as inappropriate.
Despite its potential value for both academics
and practitioners, a detailed framework for explor-
LQJWKHUHOHYDQFHRIWKHYDULRXV¿HOGVRI,7UHODWHG
knowledge that make up the competence of IT
professionals in the Net Economy has not been
developed up to now. Building on the general IT
governance principle of aligning business and
IT (Henderson & Venkatraman, 1999; Luftman
& Brier, 1999), this chapter aims to establish the
WKHRUHWLFDOIRXQGDWLRQVUHTXLUHGWR¿OOWKLVJDS
W it h i n t h i s p a r t i c u l a r c on t e x t , t wo re s e a r c h qu e s -

tions are addressed:
1. What are the areas of knowledge and skills
that represent the required competence of IT
professionals in Internet-based ventures?
2. What are the factors that determine the value
of IT competence in the context of founding
Internet-based businesses?
0RUHVSHFL¿FDOO\WKLVFKDSWHUDUWLFXODWHVWKH
concept of IT-related competence in Internet-
based ventures, outlines its dimensions, and
suggests a framework for modeling the effects
RIIDFWRUVLQWHUQDODQGH[WHUQDOWRWKH¿UPRQ
the actual and perceived value propositions of
the different dimensions.
BACKGROUND
In an Internet-based venture, the IT professional
is usually responsible for implementing the Web
platform and may take the role of the CIO at a
later stage. In the classical sense, the CIO of a
¿UPLVUHVSRQVLEOHIRUWKHEXVLQHVVDQG,7YLVLRQ
the design of the IT architecture and the delivery
of IT services (Earl & Feeny, 1994; Feeny &
Willcocks, 1998). However, in an Internet-based
YHQWXUHWKDWJHQHUDWHVUHYHQXHDQGSUR¿WVWKURXJK
a Web-based platform independent from a physical
value chain (Amit & Zott, 2001; Lumpkin & Dess,
2004; Weiber & Kollmann, 1998), the role of the
CIO seems to be fairly different from its classi-
FDOGH¿QLWLRQDV,7UHODWHGLVVXHVRIVWUDWHJ\DUH
elevated from inward focused support functions

to critical success factors (Bauer, 2001). Instead
RIGHVLJQLQJWKH¿UPZLGH,7LQIUDVWUXFWXUHDQG
delivering internal IT services, the CIO is mainly
responsible for implementing, maintaining and
enhancing the venture’s Web platform, that is,
W K H W H FK Q R O R J L F D O E D VL V RI W K H ¿ U P¶VY D O X H F U H D W L R Q 
processes (Kollmann, 2006; Kollmann & Häsel,
2006). This unique position of IT professionals
in Internet-based ventures suggests that their role
demands a special set of knowledge and skills.
Basically, there are three alternatives to de-
velop a competence construct (Lee et al., 1995).
:KLOHD ¿UVWDSSURDFKLVWRHPSLULFDOO\GHULYH
perceived competence dimensions, a second way
LVWRGH¿QHWKHGLPHQVLRQVa priori using an exist-
ing theory. A third alternative is to semantically
classify a critical set of competencies utilizing
H[LVWLQJVWXGLHVWKDWKDYHLGHQWL¿HGDQGYHUL¿HG
respective dimensions. The majority of studies
use this third approach for reasons of validity and
simplicity (Lee et al., 1995). It is not appropriate
for exploring the competence of IT professionals
in Internet-based ventures, as there are a number
RIFRQWH[WXDOSDUWLFXODULWLHVVXFKDVVFDUH¿QDQFLDO
resources, small entrepreneurial teams (Koll-
mann, 2006), the need for practical experience
in developing Web-based systems (Murugesan,
Deshpande, Hansen & Ginige, 2001), and the
need for agility and proactiveness to cope with
the fast-paced environment of the Net Economy

(Bhandari, Bliemel, Harold & Hassanein, 2003;
Highsmith, 2002; Sharma & Gupta, 2004). In order
to avoid an intuitional and heuristic extension of
existing models, a theoretical frame of reference is
required to classify, adapt und extent the constitu-
tive dimensions describing the competence of IT
professionals in Internet-based ventures.
1908
Competence of Information Technology Professionals in Internet-Based Ventures
One may speak of competence only where there
H[ L VW V D Q D J U H H P H Q W R U ¿W E H W ZH H Q N QRZOH G J H D Q G 
a task (Von Krogh & Roos, 1995), that is, compe-
tence is based on knowledge, but manifests itself
RQO\LQDVSHFL¿FFRQWH[WHQDEOLQJDQLQGLYLGXDO
to adequately solve new problems in unknown
situations. Consequently, when developing com-
petence models, a multidimensional perspective
integrating the epistemological dimensions of
theoretical knowledge and practical experience
is required (Bassellier & Benbasat, 2004; Sgobbi,
2002). The majority of existing studies apply a
taxonomy proposed by Polanyi (1967), distin-
guishing between explicit and tacit knowledge.
While explicit knowledge may be verbalized, is
uniquely communicable and may thus be taught,
read and explained, tacit knowledge cannot be
fully verbalized (Polanyi, 1967) and enables an
individual to modify its actions as a result of the
experience gathered in prior actions. Moreover,
tacit knowledge covers cognitive aspects such as

vision and business acumen (Nonaka, 1994).
%HVLGHVGH¿QLQJFRPSHWHQFHRQDQHSLVWHPR-
ORJLFDOOHYHOFRPSHWHQFHPD\DOVREHGH¿QHGRQ
a functional or disciplinary level, differentiating
between professional and managerial know-
how (Sveiby & Lloyd, 1990). With respect to IT
professionals, scholars agree that specialized IT
knowledge must be accompanied by competen-
cies that are not directly related to IT or computer
science (Bassellier & Benbasat, 2004; Medlin,
Dave & Vannoy, 2001; Tang, Koh & Lee, 2001).
In particular, these non-IT competencies include
conceptual knowledge on the potential problem
solving areas and business knowledge, since the
development of information systems always has
to meet economic requirements (Bassellier &
Benbasat, 2004).
Competence of IT professionals may thus be
conceptualized as a dualism of IT and business
knowledge. On an epistemological level, both
areas apparently include both explicit and tacit
knowledge. However, it may be argued that many
problems that IT professionals are confronted
with cannot be solved by the mere existence of
functional or disciplinary (i.e., IT and business)
knowledge. These transdisciplinary problems
require knowledge on how to integrate disciplin-
ary knowledge (Horlick-Jones & Sime, 2004).
Transdisciplinary knowledge therefore enables
IT professionals to combine their functional

knowledge on instruments and methods, as it is
required in the respective context, facilitating a
³KLJKHURUGHUthinking about technical and mana-
gerial issues in a holistic manner” (Dalal, 1994, p.
26). The need for transdisciplinary competence is
UHÀHFWHGLQWKHFXUULFXODUHFRPPHQGDWLRQ
RI WKH $&0 FRQVLGHULQJ ³WHFKQRORJ\HQDEOHG
business development” (Gorgone, Davis, Valac-
ich, Topi, Feinstein & Longenecker, 2003, p. 13)
DVDQLQWHUVHFWLRQRIWKHGLVFLSOLQDU\¿HOGVWKDW
have been introduced in previous versions of the
ACM recommendation (Couger, Davis, Dologite,
Feinstein, Gorgone & Jenkins, 1995).
Besides the ACM recommendations, a number
of researchers underline the interplay of special-
ized IT knowledge and general business knowl-
e dg e. I n a n e a rly s t u dy, Ne ls on (1991) e x plo re s t he
knowledge and abilities required by IT personnel.
+HLGHQWL¿HVVL[GLPHQVLRQVRIFRPSHWHQFHWKDW
describe both organizational and IT knowledge,
but also highlights the transdisciplinary ability
to sense the potential of IT in an organizational
context. In a study surveying business managers,
IT managers and IT consultants, Lee et al. (1995)
¿QGWKDW,7SURIHVVLRQDOVQHHGWRXQGHUVWDQGWKH
business context and possess interpersonal and
management knowledge/skills. Moreover, they
need to possess technology management knowl-
HGJHZKLFKLV³FRQFHUQHGZLWKZKHUHDQGKRZ
to deploy information technologies effectively

DQG SUR¿WDEO\ IRU PHHWLQJ VWUDWHJLF EXVLQHVV
objectives” (Lee et al., 1995, p. 323). Similarly,
)DQJ/HHDQG.RK¿QGWKDWHQWU\OHYHO
IS professionals need to possess both techni-
cally-oriented and business-oriented knowledge
1909
Competence of Information Technology Professionals in Internet-Based Ventures
and skills, while the latter particularly includes
knowledge and visions on how to use technology
trends in a competitive environment.
In a survey of job advertisements for program-
mers, system analysts and IS managers Todd, Mc-
Keen, and Gallupe (1995) ascertain that all there
MRESUR¿OHVUHTXLUHWHFKQLFDONQRZOHGJHV\VWHPV
knowledge and business knowledge. Similarly,
Medlin et al. (2001) explore two technical and
two non-technical skill sets among IS students,
while Bailey and Stefaniak (2001) classify the
skills of programmers as technical, soft and busi-
ness concepts. The non-technical competence
of IT professionals is investigated in detail by
Bassellier & Benbasat (2004), who differentiate
EHWZHHQRUJDQL]DWLRQVSHFL¿FNQRZOHGJHDQGLQ-
terpersonal/management knowledge. The former
includes knowledge of IT-business integration that
enables IT professionals to understand synergies
and interdependencies between IT and business
activities. In line with this survey on the business
competence of IT professionals, Bassellier, Reich,
and Benbasat (2001) explore the IT competence

RIEXVLQHVVPDQDJHUVFRPSULVLQJ¿YHDUHDVRI
explicit IT knowledge as well as tacit knowledge
such as experience in IT projects and vision for
the role of IT.
IT COMPETENCIES IN THE
CONTEXT OF INTERNET-BASED
VENTURES
The literature review in the preceding section
reveals that the competence of IT professionals
invariably covers a technical/methodical and a
EXVLQHVVVRFLDOGLPHQVLRQ³7KHSHUFHSWLRQH[LVWV
that a successful IS professional blends techni-
cal knowledge with a sound understanding of
the business while commanding effective inter-
personal skills” (Todd et al., 1995, pp. 1-2). The
literature review also highlights the importance
of transdisciplinary knowledge that enables IT
professionals to integrate the technical/methodical
and business/social competence dimensions, that
is, effectively applying specialized knowledge
in a higher-order business context. However, the
competence models described in the existing
literature are not able to fully capture the role
of IT professionals in Internet-based ventures,
as young businesses in the Net Economy entail
a multitude of contextual particularities. These
particularities will be discussed in the following
sections in order to derive a competence model
for IT professionals in the Net Economy.
Contextual Particularities of Young

Businesses in the Net Economy
In the last years, the platforms of Internet-based
ventures have become complex software systems
that should be referred to as Web applications
rather than Websites (Ginige & Murugesan, 2001).
In the Net Economy, Web applications implement
the primary value creation activities of electronic
businesses, forming the basis of electronic prod-
ucts and important interfaces to customers and
cooperation partners (Kollmann, 2006; Kollmann
& Häsel, 2007). It is especially the development
of such interfaces that traditional IT governance
has not had to deal with (Patel, 2004). Web ap-
plications in the context of the Net Economy are
therefore considerably different from traditional
enterprise applications, which have a supporting
function with respect to value creation activities
and are mostly used for internal purposes. Conse-
quently, IT professionals are not required to act as
an internal service provider (Farwell, Kuramoto,
Lee, Trauth & Winslow, 1992), but take a central
role in product development, requiring sound
knowledge in the fundamental areas of computer
science, such as databases, programming, com-
puter graphics, analysis, and design as well as the
management of software projects (Taylor, 2006).
In contrast to traditional software projects, the
development of Web applications for electronic
1910
Competence of Information Technology Professionals in Internet-Based Ventures

businesses comprises a larger amount of standards,
technologies and development tools, resulting in
highly complex projects (Ginige & Murugesan,
2001; Taylor, England & Gresty, 2001). Moreover,
unlike established technologies, Web technologies
are characterized by a higher volatility (Reifer,
2002) that demands software developers to con-
tinuously upgrade their specialized IT knowledge
(Sgobbi, 2002; Taylor et al., 2001).
Besides technological particularities, the de-
velopment of electronic products entails several
managerial issues that indirectly affect the com-
petence requirements of IT professionals. Mostly,
these issues result from the aforementioned tech-
nological volatility, as new technologies enable
new business models as well as new forms of
collaboration and competition (Bhandari et al.,
2003). As the Web facilitates worldwide com-
parability, the implementation of new business
models is associated with a substantial pressure of
competition. Fierce competition also results from
low chances of differentiation, a higher geographi-
cal reach of the single market participants, lower
switching costs, lower entry barriers and new
substitutive products (Porter, 2001). In particular,
the turbulence of the Net Economy leads to the
fact that electronic products are characterized by
a very short time-to-market (Cash, Yoong & Huff,
2004). Consequently, the primary goal is not to
produce high-quality products at a low cost, but

rather launch high-quality products to the market
as quickly as possible (Reifer, 2002). In many
cases, there are radically new business models,
which are as a result of interaction with customers,
partners and competitors, not fully outlined until
the cause of the development project or even after
introducing the product to the market (Highsmith,
2002). As a result, electronic businesses need to
gather practical experiences and market feedback
as soon as possible in order to adapt their strategy.
This is supported by empirical studies showing
that product development processes in the Net
(FRQRP\VKRXOGIRFXV³RQJHWWLQJDQHDUO\DQG
E\GH¿QLWLRQLQFRPSOHWHYHUVLRQRIWKHSURGXFW
LQWRFXVWRPHUV¶KDQGVDW¿UVWRSSRUWXQLW\´0DF-
Cormack, Verganti & Iansiti, 2001, p. 144).
In the light of continuously changing market
UHTXLUHPHQWVÀH[LELOLW\DQGUDSLGUHVSRQVHDUH
the key to success in the Net Economy (Shi &
Daniels, 2003; Sharma & Gupta, 2004). Flex-
ibility can be considered at three dimensions that
include processes, products and people (Meso &
Jain, 2006). On the process level, software devel-
opment processes need to correspond to the fact
that Web applications change and grow rapidly
during their life cycle (Ginige & Murugesan 2001;
Highsmith, 2002). Processes need to facilitate a
continuous evolvement and maintenance of the
HOHFWURQLFSURGXFWUHVXOWLQJLQ³SHUSHWXDOEHWD´
(O’Reilly, 2005) products that are released early

and released often, treating users as co-develop-
ers. On the productOHYHOÀH[LELOLW\LVDVVRFLDWHG
with the extensibility, scalability, maintainability,
compatibility, interoperability, and security of
WKH:HEDSSOLFDWLRQ2QO\ÀH[LEOHV\VWHPDUFKL-
tectures can be adapted according to the volatile
requirements in a timely and cost-effective man-
ner (MacCormack et al., 2001; Shi & Daniels,
2003). On the peopleOHYHOÀH[LELOLW\FDOOVIRU,7
professionals that understand the interdependen-
cies between market and technology – and thus
are able to anticipate upcoming requirements and
transfer them into new products and functionali-
WLHV7KLVUHTXLUHVLQWHQVL¿HGLQWHUSHUVRQDOVNLOOV
as informal planning and incremental develop-
ment activities imply an effective interaction with
interdisciplinary teams consisting of both business
and IT people (Cash et al., 2004). In many Internet-
EDVHGYHQWXUHVKRZHYHUKROGLQJXSÀH[LELOLW\
PD\EHLPSHGHGE\DODFNRI¿QDQFLDOUHVRXUFHV
(Kollmann, 2006) that precludes an enlargement
of the team by hiring additional development
expertise. Consequently, both development proc-
esses and application architectures heavily rely
on the explicit and tacit knowledge of a small
group of developers, or even on the individual
development practices of a single IT professional
(Ginige & Murugesan, 2001). In the context of IT
1911
Competence of Information Technology Professionals in Internet-Based Ventures

governance, which focuses on transforming and
positioning IT for meeting future business chal-
OHQJHV3HWHUVRQWKHFRPSHWHQFHSUR¿OH
of the respective IT professional is thus critical
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products of a high quality.
A Competence Model for IT
Professionals in the Net Economy
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in the IS literature as well as the previously
discussed contextual particularities of Internet-
based ventures, three competence dimensions
may be derived, which include IT competence,
business competence and transdisciplinary
competence. According to their epistemological
and functional/disciplinary characteristics, these
dimensions may be further subdivided (see Figure
1). The resulting dimensions will be discussed in
the following paragraphs.
IT competence: The aforementioned complex-
ity and volatility of the knowledge required for
Web application development renders an in-depth
modelling of IT competence almost impossible.
However, explicit IT knowledge may be roughly
divided into two areas. One of these areas includes
knowledge on available technologies that the IT
professional may fall back on when implementing
the electronic platform. Technology knowledge
should be rather broad than deep (Cash et al.,

2004). Especially with respect to Web technolo-
gies, there exist a number of reusable standards and
components that IT professionals need to be aware
of (Bailey & Stefaniak, 2001). IT competence,
though, must also cover knowledge on the formal
methods and abstract concepts that the computer
science discipline provides independently from
concrete problems or technologies. This second
area of IT competence, which should be referred
to as conceptual knowledge, enables IT profes-
VLRQDOVWRGHVLJQÀH[LEOHVRIWZDUHDUFKLWHFWXUHV
and implement high-quality electronic products. A
taxonomy that differentiates between technology
knowledge and conceptual knowledge is able to
cover the explicit knowledge of the computer sci-
ence discipline in an acceptable manner. However,
Figure 1. Competence model for IT professionals in Internet-based ventures
Functional/disciplinary level
IT
competence
Business
competence
Tacit knowledgeExplicit knowledge
Epistemological level
Realization
competence
Technology
knowledge
Conceptual
knowledge

Interpersonal
competence
Business
management
knowledge
Entrepreneurial
competence
Net Economy competence
IT/Business
vision
Transdisciplinary competence
Functional/disciplinary level
IT
competence
Business
competence
Tacit knowledgeExplicit knowledge
Epistemological level
Realization
competence
Technology
knowledge
Conceptual
knowledge
Realization
competence
Technology
knowledge
Conceptual
knowledge

Interpersonal
competence
Business
management
knowledge
Entrepreneurial
competence
Interpersonal
competence
Business
management
knowledge
Entrepreneurial
competence
Net Economy competence
IT/Business
vision
Transdisciplinary competence
1912
Competence of Information Technology Professionals in Internet-Based Ventures
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since tacit knowledge is not included. The miss-
ing tacit part of IT competence results from the
practical use of Web technologies and computer
science concepts. Practical experience, though, is
always connected with the assimilation of further
explicit knowledge, such as how to access external
knowledge resources with the help of search en-
gines (Bassellier et al., 2001; Taylor et al., 2001).
As a third subdimension, realization competence

therefore enables IT professionals to apply their
own explicit IT knowledge by enhancing it with
both explicit and tacit experience components.
Business competence: Important enablers of
alignment of business and IT are that IT people
understand the business and demonstrate leader-
ship (Luftman & Brier, 1999). Rather than being
t e c h n i ca l e x p er t s , t h e y n e e d t o b e b u s i n e s s p r o b l e m
solvers (Venkatraman, 1999). Consequently, in or-
der to actively participate in formulating strategy
and processes of the venture as suggested by the
basic principles of IT governance, IT profession-
als need a sound understanding of the business.
Furthermore, business competence increases the
intention of IT professionals to collaboratively
work with their business partners (Bassellier &
Benbasat, 2004). As IT professionals in Internet-
based ventures need to implement entirely new
business processes, they need to understand the
respective operational use cases and have to be able
to interpret managerial problems (Lee et al., 1995;
Cash et al., 2004). Moreover, the software devel-
opment processes themselves have to match eco-
nomic requirements, which makes fundamental
business management knowledge indispensable
for IT professionals (Bassellier & Benbasat, 2004;
Todd et al., 1995). This knowledge is related to
the entrepreneurial competence which comprises
the IT professional’s experience in founding new
businesses, as well as explicit knowledge resulting

from entrepreneurship literature and/or teachings.
As a third subdimension, business competence
includes interpersonal competence, covering the
abovementioned communication and leadership
abilities (Bassellier & Benbasat, 2004), the abil-
ity to work with others, project management and
c u s t o m e r r e l a t i o n s s k i l l s ( L e e e t a l . , 19 9 5 ). Va r io u s
frictions in teams result from a lack of leadership
and unrealistic expectations, which are therefore
a major risk in Internet projects (Reifer, 2002). It
is thus crucial that IT professionals become expert
knowledge providers within their team and are
able to explain technical issues to their partners
(Cash et al., 2004).
Transdisciplinary competence: Alignment
in e-business environments requires business
visionaries that understand both the fundamen-
tal laws of the Net Economy and the technical
foundations driving success in this arena (Bauer,
2001). As the IT professional is responsible for
the technological aspects of the overall electronic
product, a solid Net Economy competence is
crucial. This competence dimension includes
explicit knowledge on electronic value creation
processes, electronic payment methods, legal
aspects of electronic business as well as existing
platforms and business models (Kollmann, 2006;
Taylor et al., 2001). Moreover, Net Economy
competence covers an experience component, i.e.
tacit knowledge on operational problem-solving

SURFHVVHVWKDWFDQ QRWEHFOD VVL¿HGDVHLWKHU,7RU
business-related. From a strategic perspective,
the IT professional needs to anticipate implica-
tions of external change and relate them to the
venture’s platform. This requires a holistic view
on market and technology trends, and the own
business and its Web application, incorporating
both critical and creative thinking (Cash et al.,
2004; Dalal, 1994; Fang et al., 2005; Tang et al.,
2001; ). The respective IT-Business vision is highly
characterized by tacit knowledge and enables the
IT professional to make intelligent decisions with
respect to the product development processes and
the architecture of the Web application. Modeling
this dimension is reasonable since IT governance
relies on the capability of all management team
1913
Competence of Information Technology Professionals in Internet-Based Ventures
members to formulate strategy and understand
the long-term interplay between business and IT
(Peterson, 2004).
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Propositions of the Competence
Dimensions
While in the preceding subsections the constitutive
dimensions of competence of IT professionals in
WKH1HW(FRQRP\KDYHEHHQLGHQWL¿HGWKHGLIIHU-
ent dimensions will now be analyzed in regard
to their relevance. The following paragraphs
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YDOXHSURSRVLWLRQRIVSHFL¿F,7UHODWHGVNLOOVDQG
knowledge areas in an Internet-based venture.
7ZRNLQGVRILQÀXHQFLQJIDFWRUVFDQEHLGHQWL¿HG
including factors that have an effect on the actual
value proposition of a competence dimension and
IDFWRUVWKDWLQÀXHQFHWKHperception of the value
proposition by the partners. The perceived value
proposition of a competence dimension results
from the founder’s interpretation of the actual
value proposition of that competence, that is, a
moderating effect of the respective factors can be
constituted (Figure 2). In order to understand to
what extent business and IT people contribute to
value creation and how they perceive the contribu-
tion of each other’s distinct competencies, both
NLQGVRILQÀXHQFLQJIDFWRUVQHHGWREHFRQVLG-
ered. In the following, supposable dependencies
will be exemplarily discussed for each kind of
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tions: ,PSRUWDQW IDFWRUV LQÀXHQFLQJWKHDFWXDO
relevance of the competence dimensions result
from the characteristics of a venture’s business
model and its electronic products, as these char-
acteristics directly affect the resource require-
ments of the software development process. On
the one hand, this includes the complexity of the
YH QW X UH¶VSO D W IR U P W K D W L V  W KH G H J U H H RI G LI ¿ F X OW \
in analysis, design and implementation of the
software (Zhang, Windsor & Pavur, 2003). Com-

plexity depends on functional requirements such
as interactive elements and personalized content
as well as non-functional requirements such as
performance, availability, usability, security or
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V(D,R)
Value proposition
of competence
dimension D
as perceived by
respondent R
Business model characteristics
(complexity, innovativeness)
Resource availability
(financial, personal)
IT/Business alignment
within the founding team
Respondent’s
functional role
Respondent’s
competence profile
Factors influencing
actual value propositions
Factors influencing
value perception (moderators)
Perceived value
propositions
IT/Business environment
(volatility)
Venture development phase

(size, age)
V(D,R)
Value proposition
of competence
dimension D
as perceived by
respondent R
Business model characteristics
(complexity, innovativeness)
Resource availability
(financial, personal)
IT/Business alignment
within the founding team
Respondent’s
functional role
Respondent’s
competence profile
Factors influencing
actual value propositions
Factors influencing
value perception (moderators)
Perceived value
propositions
IT/Business environment
(volatility)
Venture development phase
(size, age)