Jubilee or no jubilee, UK computing cannot afford to look
backwards. In terms of innovation and competition, we lost our
place at the head of the queue long ago.
The Queen's golden jubilee celebrations are now well and truly
under way, possibly bringing a spot of light relief to the daily
grind for many.
But don't worry, I am not about to offer you a schmaltzy slow waltz
through the past 50 years of UK IT. I hereby declare
Behind
Closed Doors to be a jubilee-free zone.
This is not an act of fervent republicanism. It is simply that I
don't think we can afford the luxury of nostalgia in our industry.
We need to focus all of our attention squarely on today and the
future, rather than continually harping back to the so-called good
old days.
We need to wake up and smell the coffee if we want to have any sort
of computer industry left in this country.
For sure, 50 years ago the UK led the world in computing. In
November 1951, less than six months before the accession of the
queen, the world's first business computer application sputtered
into life on the Lyons Electronic Office (LEO) system and our
industry was born.
The pre-eminence of British computing rose meteorically for a
while, recognised in the famous 1964 declaration by Prime Minister
Harold Wilson of "the white heat of technology", until the present
day, where it has almost disappeared completely.
Let's face it, when it comes to computing, we are no longer a
serious player in our own backyard, let alone on the world stage.
Over the past 50 years our indigenous computer manufacturing base
has collapsed and it
 | | "When it comes to computing, we
are no longer a serious player in our own backyard, let alone on
the world stage" | | | | | |
| | Colin Beveridge | | |
|
|
seems likely that our systems development capability is now about
to follow suit.
The days of in-house programming teams have been numbered for a
long time, as companies have, naturally, sought to offload the risk
of bespoke software development and maintenance to specialist
providers.
For my own sake, I can't argue with that rationale because it makes
sound sense to me, in much the same way as most companies already
buy their fleets of cars, lorries and vans ready-made.
So why should our business-critical software be treated any
differently?
I have long believed that all major development projects would
gradually migrate from our internal computer departments towards
specialist software houses, taking the staff with them into centres
of excellence and expertise.
The economies of scale and consequent cost-benefit analysis are
extremely strong business drivers for such an approach. Eventually,
I can see all development work being bought in, rather than built
locally. Indeed, for many of us this proposition has already become
a "no-brainer" decision, a reality.
So far, so good, then. I am simply describing a future where the
workload shifts slightly, from the local engineers to software
"manufacturers".
This scenario clearly has parallels with the Industrial Revolution,
when great factories and mills aggregated the work previously
performed by a widely distributed, largely independent,
workforce.
For almost 200 years, these great, grimy industrial powerhouses
were the engine-room of a world-leading economy. I suppose the
present Government would hope that information technology could
help history to repeat itself and put us back on the top of the
pile.
Sorry guys, it's not going to happen.
Individually we can still cut the mustard, but collectively our
native power is steadily diminishing. Just look at our exposure to
the incipient Microsoft licensing changes and our apparent
impotence, despite prime-ministerial cosying-up to the Boss.
On the surface, we are seeing a consolidation of capability into
stronger service providers, delivering a portfolio of products
through outsource contracts. The ICT market is evolving and shaking
itself out, with some spectacular casualties along the way.
However, almost without exception, our major service providers are
global undertakings based overseas. Likewise, the vast majority of
products that we use, both hardware and software, are manufactured
elsewhere. So where is the real bottom-line value to our economy in
the long term?
Please don't get me wrong - I am not advocating a protectionist
policy. I am just trying to put an important issue on the table -
pragmatism. Quite simply, we have to realise that our world of
business computing is about to change, both rapidly and radically.
The first wave of change was driven by the widespread adoption of
outsourced services. Like most early stages in an evolutionary
process, this phase was more about reorganisation and
redistribution of effort than real revolution. Cost and effort were
simply displaced as staff transferred from one cap badge to
another, often without moving desks.
All in all, this may have been a sensible exercise despite
arguments that it has been a zero sum equation in some
situations.
But now the UK computing industry has reached a genuine turning
point.
On analysis, most IT activity has already matured to the point of
commoditisation so the next logical step in the maturity process is
for manufacturing demand to gravitate towards the lowest cost of
provision. In other words, where can we get the work done cheaper,
faster and without compromise on quality?
Just like our industrial manufacturing predecessors in the 1970s,
our systems development and application "factories" are,
increasingly, finding themselves faced by serious competition from
emergent computing economies, empowered by the twin engines of the
World Wide Web and cheap broadband communications.
For intangible products, such as software, digital distribution
across the Web has practically eliminated many of the difficulties
associated with transportation and shipping, so the calculation
very quickly boils down to comparative staff costs.
This was the principal lesson to be learned from earlier
manufacturing struggles and I believe that it will apply to the
software industry, only quicker.
I already know where I can rent an offshore turnkey software house
with 15 staff for just over £6,000 a month; or for the same money I
can get a 40-seat call centre. At those rates, it's going to be
impossible to prevent more and more of our development and support
work migrating offshore over the next five years.
Napoleon once dismissed Britain as a "nation of shopkeepers" and
lived many years to reflect on his contemptuous remark.
In computing terms, however, I think that we are now about to
become a nation of administrators, operators and maintenance
workers - all of which are essential roles but also command only
the lowest values, in revenue-earning terms, corporately and
individually.
Other countries will reap the rewards of our premium-rate computing
activities at a significant cost to the economy - unless we take a
leaf out of their book and get our act together at the national
level to remain competitive before it is too late.
Perhaps we need to write a credible business continuity plan for
the UK?
Can the UK catch up?
Or have we had our day as a great
power in IT?
Let us know with an e-mail >>.
CW360.com
reserves the right to edit and publish answers on the Web site.
Please state if your answer is not for publication.Colin Beveridge is an interim executive who has held
top-level roles in IT strategy, development services and support.
His travels along the blue-chip highway have taken him to a clutch
of leading corporations, including Shell, BP, ICI, DHL and
Powergen.