Skills shortage: Global phenomenon, SA problem

The impact of the skills shortage in the local ICT industry is increasing daily as skilled technicians, programmers, systems analysts and other specialists leave the country.

Mike Leeuwen, a director of PM Tech, the IT consulting, software development, systems implementation and support services group, looks at the problem and suggests appropriate solutions.

The Information Technology Association of America (ITAA), one of the leading associations of IT managers in the US, reports that more than 500 000 available jobs will not be filled this year (2003) because of a shortage of IT workers.

The skills shortage in the information and communications technology (ICT) industry is a worldwide phenomenon. However, its impact on South African businesses is that much greater as we have the added problem of the "brain drain" with which to contend.

Even in an economic climate that has seen many thousands of layoffs and the down-sizing of IT companies, there are still shortages.

Central to the problem is the fact that, in SA, the available workforce is under-skilled. Even trained ICT workers lack appropriate skills sets. This is true of many of the so-called Oracle, SQL, Java and Windows NT experts in our market.

As a result, while there may be "bodies" available, IT managers cannot find enough "talent" to complete all of the projects scheduled by their companies. There is a general slow down in implementations and the efficiency of `big business` in this country is being negatively influenced.

As long as there remains a significant gap between the available pool of skills and the needs of IT departments, outsourcing may be the best alternative for companies that want to ramp up the delivery of new IT solutions to their end-users.

Many organisations - particularly non-technology companies seeking to expand their IT capabilities - should be looking to outsource at least some of their project load.

In particular, the outsourcing of niche skills, leading-edge technology and resources is often the only route companies can take to meet their business goals.

This may mean bringing in systems integrators and third-party services that can write applications and code on an outsourced basis.

Outsourcing also represents a very real opportunity for the application service provider (ASP) market.

ASPs offer the ability to deliver tailored applications as subscription services, eliminating the need for highly skilled internal programming staff. With the proper services to back it up, an ASP today might rightly claim that its services are more advantageous than ever.

However, companies should not view outsourcing as a business process that has been forced upon them, but should consider outsourcing as a business philosophy.

It is argued that if a company wants to save money through the adoption of an outsourcing model, it should begin by treating its internal organisational divisions as outsource groups.

Internal divisions will then compete with outside firms for projects. The heat of competition will produce increased efficiencies in areas such as design, cost control, implementation time and technological innovation - from both camps.

An internal group, focused on such competition would, no doubt, highly resent it at first, but the outcome of the process would be a more focused and effective organisation.

A key milestone in the local outsourcing market will come with the arrival of the second fixed-line telephone operator.

At this time South African businesses will get a wider variety of options when looking to outsource their IT infrastructures, and communications bandwidth is bound to become more affordable.

Then organisations will be able to take a serious look at their IT infrastructures and outsource those aspects of the business that can benefit from off-site professional management.

For example, companies will use data management services in the same way they would use telephone services. The computer would become a device within the organisation and the data centre - the equivalent of a telephone exchange - would reside elsewhere.

The off-site data centre environment would be larger, more secure, and companies would not need to even own the software systems that run their business.

Just as telephone users pay only for the number of calls they make, and a fixed monthly rental, a similar model could evolve for data management.

Systems integrators are also set to benefit. In the last few years, many of the largest integrators have become so enamoured with `big bang` projects, such as business process re-engineering, that they have neglected basic services, such as helping a company with a single programming project.

As many companies shy away from huge, enterprise-wide IT efforts, outsourcing companies should look to provide smaller, quicker assistance with projects that can deliver a fast return on investment.

The key factor to consider when weighing the advantages and disadvantages of the "do-it-yourself" route is cost.

For example, many companies look at the fee structure of an outsourcing vendor and come to the conclusion that they will save money by providing their own labour.

This may be true in IT departments that already have the skills to undertake a particular project - but many projects require new skills.

Training staff to acceptable levels will be costly and time-consuming and will often work out to be more expensive than the outsourced option.

In addition, many first-time projects result in errors and on-going administrative issues that might not occur if the project was implemented by an experienced team.

Some companies highlight only the cost of installation when evaluating an outsourcing project, but the highest costs are often associated with change management and troubleshooting that must take place after the new systems are in place.

These administrative costs may eventually exceed the cost savings achieved by using in-house staff during the implementation phase.

With this in mind, it is safe to say that only the very time- and business-critical elements of IT should stay in-house. These include applications that are custom-developed to service very specific business needs.