Posts Tagged ‘Outsourcing’

Next-Gen ICT Professionals in Australia

May 14, 2009

Last month I attended the ICT: Making the Connection Summit 2009 which discussed issues currently facing the ICT industry and the providers of ICT higher education.

Students enrolling in IT undergraduate courses within Australia have fallen constantly every year since 2001, from 10,560 enrollments (in 2001) to 5,059 enrollments (in 2007), representing a decline of 52% over 6 years.  Worse still, is the number of applicants into these degree places have fallen from 15,130 applicants (in 2001) to 5,146 applicants (in 2007), representing a decline of 66% over 6 years.  Compounding this is that half of these enrolments are from international students.  In general, this equates to both lower quantity and quality of IT graduates entering the workforce each year in Australia.

The employment of ICT professionals has increased from 190,200 (in 2001) to 224,000 (in 2007), representing an increase of 18% over 6 years whilst incorporating the dot com bubble burst period.  Therefore we have growing demand and shrinking supply.  Currently this imbalance is being met through migrant ICT skilled workers, and capping demand through outsourcing ICT overseas. 

Here are my thoughts on why students have lost interest in ICT as a career option:

1. Perception and Image

ICT is still incorrectly considered to be for geeks working in a basement – check out this stereotypical, but great sitcom called The IT Crowd.

2. Outsourcing and Importance

Australian organizations have been aggressively outsourcing aspects of their ICT overseas.  News of this outsourcing is published in the daily papers and incorrectly reinforces the perspective to the Australian community that ICT is unimportant.

3. R&D and Innovation

Australian organizations are great adopters of technology, but are not great inventors of technology.  This is where the most exciting news occurs within ICT and the wider community, and the source of this news is predominately coming from overseas based organizations.

4. Hype cycles

The dot com bubble burst and many ICT professionals were hurt both financially and emotionally.  Many of these ex-ICT professionals share their unfortunate experiences and indirectly influence future students to avoid the ICT industry.

4. Fragmented ICT associations

Australia has numerous and diverse ICT associations which is fantastic.  Unfortunately, it has the side effect of diluting the voice of the ICT community, which is necessary to influence both government policy and community perceptions.

5. High-profile ICT failures

Australia has experienced high-profile ICT failures within both government and industry, though I anticipate that industry conceals these more.  These failures, which are an indictment to ICT, do reduce the appeal of ICT.  People in general want to be associated with success, and the risk adverse culture within Australia does not tolerate failure.

6. Glass-ceiling

The top positions (CEO, Chairman, etc.) of organizations are dominated by those with a business or law degrees.  Too few ICT degree holders ascend to these positions and therefore the influence of ICT is diminished.  ICT should play a more strategic role in business which requires ICT expertise at the top positions.  This is a bit of a chicken and egg situation as it is sometimes difficult to get momentum where like-minded appoint like-minded.

7. K12 curriculum

This is probably the biggest issue.  Computers are now ubiquitous in their usage and 70% of students with high IT ability believe they learn more at home than at school.  For instance, some students are taught Microsoft Excel for two years as part of their computing curriculum – to me, this is like learning how to use a calculator for Maths, or a dictionary for English.  There is confusion by educators between using tools and applying knowledge.  The subject of computing should be removed at the K12 levels and taught as part of other subjects.  For example, students can learn how to develop algorithms in Maths, how to design user interfaces in Art, or learn about the transformational impact of computers within society in History.  The application of computing in other subjects would allow students to appreciate the relevance and practicality of computing.  However, if K12 curriculum must include a computing subject then teach something that can both stimulate and excite students, like Lego Mindstorms or Microsoft Kodu.

There was recently a relevant article in CIO on How to attract Next-Gen IT Workers.  The article advices to use partnerships with schools to attract and shape youth for careers in ICT.  In a similar aspect, QSR International has just started partnering with the Monash University Faculty of IT with its Industry-Based Learning program to help develop the future generation of ICT professionals.

Innovation and Outsourcing

March 1, 2009

Every week I receive unsolicited emails from IT outsourcing companies, predominately from India, who all promote their software development and IT support services on the basis of cheaper labour, broader competencies, and extensive processes.  Yet at the same time, I continue to read about Satyam’s Meltdown.  Does this imply that the lower costs or extensive processes are merely a mirage?  Do we understand the true cost of IT outsourcing on our organisations over the longer term?

From my idealistic viewpoint, IT goals should be focused on innovation, quality, and agility foremost.  IT should be of strategic importance within an organisation, a joint partner in revenue generation that builds competitive advantage.  IT must understand the business environment and be an proactive contributor within the business – meaning it requires a culture of innovation and ownership.

Software development is fundamentally about innovation, creating value for the business and delighting end-users.  Innovation requires collaboration and exploration with an understanding of both users and technology.  Why would you outsource software development when the premise and driver of outsourcing is focused around cheaper cost rather than improved innovation?

I have previously outsourced IT support functions, and found that the outsourcer’s promises far exceeded their ability to deliver on them.  In effect, they hamstrung the business through conflicting cultures where they valued process over product, control over change, and contract over outcome.  In effect they missed the mark by a country mile.   Since back-sourcing the IT support function, we have achieved significantly better results (through improved quality and agility) without an associated increase in cost.

Where I have found outsourcing works best is when working with specialist companies, that have premium resources, niche competencies, and defined outcomes.  In the traditional sense this would be considered consulting services rather than outsourcing services.  Three specialist companies that I have used successfully and would recommend are Planit (test specialist), Readify (.NET specialist), and SDL (translation specialist).  In my experience, it is worth paying the premium for a specialist; rather than the discount for a jack of all trades.

It was interesting to read this month that the down economy fuels IT outsourcing with further drive to slash fixed costs and deliver services with smaller staff numbers.  According to Gartner’s annual survey of CIOs, their business priorities in 2009 are 1. Improving business processes; 2. Reducing enterprise costs; and 3. Improving enterprise workforce effectiveness.  This contrasts with their anticipated business priorities for 2012 of 1. Creating new products and services (innovation); 2. Improving business processes; and 3. Attracting and retaining new customers.  I wonder where this outsourcing trend will leave many companies when the economic outlook improves and the focus returns to innovation rather than cost.

To finish, I quote Peter Drucker (1909-2005), writer and management consultant

Innovation is the specific instrument of entrepreneurship.  The act that endows resources with a new capacity to create wealth.