Answer 1). Many IT managers focus solely on mastering new tech skills to increase their value to their employers -- a strategy that makes perfect sense, but only up to a point. Once a manager reaches that point, he is viewed as only technically proficient and being perceived as unskilled in business planning and learning how to communicate and collaborate well with customers, coworkers, and service providers. Having a balance of these "hard" technology skills and "soft" business and people skills, you can go a long way toward insulating your career from recessionary woes.
Here are the five essential business skills that an IT managers should possessSkill 1: Financial skills
IT Professionals need to focus on financial outcomes by setting realistic and measurable goals and objectives, estimating and budgeting the projects more realistically and by learning methods for tracking and reporting progress. They must be aware of organisational metrics used to track financial performance-and how those metrics are applied throughout the organization, including their own projects. A significant part of being "business savvy" is understanding basic financial principles and applying sound metrics to track and report performance.
Skill 2: Build strong working relationships
Establishing and maintaining good work relationships is the key to a positive workplace.
Effective businesses encourage the development of positive relationships between managers and employees as well as amongst coworkers. All businesses can foster positive workplace relationships by creating a strong mission statement and an upbeat team-based environment.
Strengthen workplace relationships by setting clear expectations, practicing constant communication and offering timely responses to both positive workplace behavior and employee issues or concerns. Managers should "actively create a sense of community Š making agreements, norms and rules of behavior explicit," he said. "Try to create trust between people. Once that's in place you can do the work." One advantage to building trust among employees is that it helps them to feel comfortable going to one another to tap one another's strengths, It's just as important for a manager to have a strong relationship with employees when their performance is lacking.

Skill 1: Leadership
While a person may be successful in a first-line supervision job, that success may not translate to middle and top management. IT managers needs excellent conceptual skills and the ability to see the big picture. Leaders are visionaries and have the ability to inspire and infect the entire organization with that vision. IT Manager should be able to Attract, retain, motivate, coach and develop team

members for high performance and set proper goals for their employees so as the employees can have a set focus for their goals.
Skill 4: Negotiation skills

The negotiation techniques are primarily for sales, but apply also to other negotiations, such as debt negotiation, contracts negotiating, buying negotiations, salary and employment contracts negotiations, and to an extent all other negotiating situations. Negotiation is vital for an organization's overall effectiveness. Organizational effectiveness is a product of activities within a system - internal and external. Negotiation is critical to establishing the internal system
(structure, people, functions, plans, measures, etc), and the organization's relationship to the external system (markets, suppliers, technology, etc). Negotiation is also critical to optimising the performance of activities internally and externally (principally through communication, by people). IT manager should possess good negotiation skills as it can easily add to sales revenues, which arguably goes straight to the bottom line as incremental profit. Good purchasing negotiation can easily save alot of the cost of bought in products and services, which again arguably goes straight to the bottom line as extra profit. Good negotiation by managers in dealing with staff can easily reduce staff turnover by 5-10%, which reduces recruitment and training costs by at least the same
%, as well as improving quality, consistency and competitive advantage, which for many companies is the difference between ultimate success and failure. Good negotiation by executives with regulatory and planning authorities enables opening new markets, developing new technologies, and the choice of where the business operates and is based, all of which individually can make the difference between a business succeeding or failing.

Other skills are Human Resource, Legal, Marketing and Governance
One of them is left...needs to be asked

Answer 2). According to Porter, the nature of competition in IT industry is personified in the following five forces:
i.
ii. iii. iv.
v.

Risk of New Entrants
Threat of substitute product/services
Bargaining power of suppliers
Bargaining power of buyers
Rivalry Between Existing Firms

FIGURE: Porter’s Five Forces model
The five forces mentioned above are very significant from point of view of strategy formulation.
The potential of these forces differs from industry to industry. These forces jointly determine the profitability of industry because they shape the prices which can be charged, the costs which can be borne, and the investment required to compete in the industry. Before making strategic decisions, the managers should use the five forces framework to determine the competitive structure of industry.
Let’s discuss the five factors of Porter’s model in detail:
1. Risk of New Entrants: Potential competitors refer to the firms which are not currently competing in the industry but have the potential to do so if given a choice. Entry of new players increases the industry capacity, begins a competition for market share and lowers the current costs. The threat of entry by potential competitors is partially a function of extent of barriers to entry. The various barriers to entry are Economies of scale
 Brand loyalty
 Government Regulation
 Customer Switching Costs

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

2.

3.

4.

5.

Absolute Cost Advantage
Ease in distribution
Strong Capital base
Rivalry Between Existing Firms: Rivalry refers to the competitive struggle for market share between firms in an industry. Extreme rivalry among established firms poses a strong threat to profitability. The strength of rivalry among established firms within an industry is a function of following factors:
 Extent of exit barriers
 Amount of fixed cost
 Competitive structure of industry
 Presence of global customers
 Absence of switching costs
 Growth Rate of industry
 Demand conditions
Bargaining Power of Buyers: Buyers refer to the customers who finally consume the product or the firms who distribute the industry’s product to the final consumers.
Bargaining power of buyers refer to the potential of buyers to bargain down the prices charged by the firms in the industry or to increase the firms cost in the industry by demanding better quality and service of product. Strong buyers can extract profits out of an industry by lowering the prices and increasing the costs. They purchase in large quantities. They have full information about the product and the market. They emphasize upon quality products. They pose credible threat of backward integration. In this way, they are regarded as a threat.
Bargaining Power of Suppliers: Suppliers refer to the firms that provide inputs to the industry. Bargaining power of the suppliers refer to the potential of the suppliers to increase the prices of inputs( labour, raw materials, services, etc) or the costs of industry in other ways. Strong suppliers can extract profits out of an industry by increasing costs of firms in the industry. Suppliers products have a few substitutes. Strong suppliers’ products are unique. They have high switching cost. Their product is an important input to buyer’s product. They pose credible threat of forward integration. Buyers are not significant to strong suppliers. In this way, they are regarded as a threat.
Threat of Substitute products: Substitute products refer to the products having ability of satisfying customers needs effectively. Substitutes pose a ceiling (upper limit) on the potential returns of an industry by putting a setting a limit on the price that firms can charge for their product in an industry. Lesser the number of close substitutes a product has, greater is the opportunity for the firms in industry to raise their product prices and earn greater profits (other things being equal).

The power of Porter’s five forces varies from industry to industry. Whatever be the industry, these five forces influence the profitability as they affect the prices, the costs, and the capital investment essential for survival and competition in industry. This five forces model also help in making strategic decisions as it is used by the managers to determine industry’s competitive structure.