IT professionals need to become more business focused,
as the trend to offshore outsourcing of basic IT skills continues,
a government-sponsored study has concluded.
Research by Ovum for the Department of Trade & Industry
suggests that the number of people employed in software and IT
services in the UK will drop by 15,000 – equivalent to 6% of the
current workforce – by the end of 2008.
The bulk of the reductions will be among programmers, call
centre and helpdesk staff, corporate administration, and other
lower level technical roles.
Employers will increasingly demand IT staff with the
higher-level business skills needed to translate technology into
successful business projects. This will mean that both employers
and IT specialists will need to take steps to update their
skills.
“Our message to the companies is you need to ensure you have the
skills and workforce development in place to develop those key
skills,” said Phil Codling, senior analyst and service manager at
Ovum.
Individuals will increasingly need to specialise in niche
vertical sectors, such as insurance or investment banking, and will
have to take steps to ensure they work on more customer facing
projects, said Codling.
But action needs to be taken now to ensure that employers have
the programme managers and business architects they will need over
the next decade.
The report raises concerns over the falling numbers of students
opting for computing and mathematics at university, and a fall in
investment in training by employers.
The UK needs to urgently address the training deficit, and
potentially use tax incentives to encourage formal staff
development. There should also be incentives for employers to
retrain UK staff whose jobs are outsourced offshore, the report
said.
“If you do not have the quality of people coming in at the base
of the industry, going through development, on-the-job learning and
formalised training, in 10 years’ time where are our top business
architects and programme managers in the UK going to come from?”
said Codling.
He advised IT professionals working in the supplier industry to
become much more business focused. “It is a question of making sure
you get involved in projects where you are closer to customers,
translating customer requirements and solutions,” he said.
Although wages for IT staff in India are increasing, Ovum
predicted that offshore outsourcing would continue to expand beyond
2008, with at least 70% of today’s software and IT services roles
having the potential to be outsourced offshore.
“Even with the double-digit wage inflation being seen in India,
there is still a very attractive cost gap. A lot of the cost of
offshoring is in the additional management overhead required and in
other expenses, rather than wages,” said Codling.
“I would not necessarily say we will need far fewer IT
professionals in the future, but a different type of
workforce.”
Outsourcing by sector
Financial services
Major use of offshore outsourcing. Investment banks are leading the
move.
Life sciences and biotechnology
A lot of potential to offshore, but building own offshore services
is preferred.
Utilities and telecoms
Expected to be the next sector to take up offshore outsourcing.
Growth could exceed that of financial services.
Public sector
Small projects, but no large take-up.
Source: Ovum/DTI
Read article: A third of firms will not train
staff
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