At first glance, it's hard to see why the retirement of
New Jersey teacher Kathleen Casey-Kirschling last October should be
of interest to the IT profession, or even why such a seemingly
innocuous event should have made both national and international
news.
But Kathleen was born just past midnight on January 1 1946, and
is widely regarded as the first of the US's post-war
baby boomer
generation. For the US government, the most pressing concern is how
it can support the 80 million individuals due to follow Kathy into
retirement and claiming social security benefits in the coming
years.
For business, the challenge is different, but just as profound.
As experienced staff and management start to leave the workforce, a
skills crisis looks set to ensue, exaccerbated by falling birth
rates. And nowhere is this likely to be felt as strongly as in the
IT industry. The largest number of baby boomers were born between
1946 and 1964, so the first impact will be felt over the next few
years, becoming much more severe over the next five to ten.
Tom Kucharvy, a senior vice-president at Ovum, explains: "The
first big change will be a shortage of senior IT people. But
another big problem is the dramatic decline in Generation Y adults
[born between 1981 and 1995] who are moving into IT."
According to a recent survey for
cwjobs.co.uk by
Salary Services,
this scenario is already being reflected in wage hikes for junior
staff as the number of permanent IT jobs advertised grows and the
number of suitable candidates dwindles.
And the situation is set to worsen, in part because the
high-tech sector is no longer considered as lucrative and rewarding
as it once was, and therefore
fewer students are opting for IT-based degrees.
"These days there just aren't as many high-tech companies to act
as employers and a lot of influences were shaped during the
dot.com
bust. Job security isn't what it used to be and more and more
entry-level jobs are going offshore, so IT isn't seen as such an
attractive proposition anymore," Kucharvy explains.
Senior personnel
But as the availability of senior personnel begins to wane as
well, major change will become inevitable. Brinley Platts,
executive chairman of the
CIOdevelopment.com
consultancy, clarifies the dynamics. "The majority of CIOs in the
FTSE 100 will retire over the
next five or six years as they're well-paid and are approaching
their 50s. So right across the senior echelons, we're going to lose
a lot of skills. But they're not going to be easy to replace and
those coming through now will have a lot more choice, because
experienced, high-calibre people are going to be more scarce."
This move from a buyers' to a sellers' market will have several
repercussions. The first is that retirees are likely to find
themselves being offered interesting incentives to stay on longer -
on a part-time or more flexible basis.
Another is that the role of executive advisor will become more
mainstream than is currently the case. So IT directors that have
chosen to retire will be given the opportunity to come back as
consultants operating under one-to-two-year contracts in order to
mentor less experienced colleagues or undertake specific activities
such as business transformation, perhaps in industries that they
have not worked in previously.
A third implication is that IT directors are going to have to
undertake succession planning more carefully than ever before,
meaning that they will need to be much more proactive in
identifying the next generation of IT management from both within
the company and outside in order to bring them on. But because of
the demographic decline of the traditional recruitment pool -
white, middle-class, and male - it also means that they will be
forced to expand their profile of suitable candidates.
"In the future, we might face a world that is very short in all
kinds of resources and that will promote breakthroughs. Lip service
tends to be paid to women and ethnic minorities now, but the CIO
profile is going to have to broaden out. It's a fact of life," says
Platts.
Even though IT is currently considered "a very hostile" work
environment by many women, making it more female-friendly is going
to become particularly important, according to
Diane
Morello, a vice-president and Gartner fellow.
Lack of experience
Yet another repercussion of the lack of experienced and
available senior IT management, however, will be a growth in
non-technical executives with knowledge of multiple disciplines
being brought in to head up the technology function.
This will not only necessitate more organisations putting
effective training programmes in place to develop and mentor people
from different parts of the business in this role - and likewise
those moving into more junior IT positions - but it will also lead
to a progressive blurring between the two areas.
Marc Dowd, principal of the CIO Group at
Forrester
Research, takes this logic a step further, however. He
indicates that there is already a shift towards replacing chief
information officers with chief operating officers and he believes
that the trend will only continue.
"CIOs will either become much more business-focused and almost
interchangeable with the COO role if they have enough business
acumen, or they'll be replaced by a COO with some understanding of
technology," he says.
But having some understanding of technology is and will remain
crucial, warns Graham Quint, IT manager at
Tewkesbury Borough
Council. "There has to be some understanding of the
implications of introducing this or that technology into the
business. IT experts are there to ensure that people don't walk
down a technology cul-de-sac or open up a can of worms. A little
knowledge can be a dangerous thing and that's not going to change,"
he says.
Nonetheless, the entry of more non-technical staff into the IT
sector will inevitably be forced by two key factors - demographics
and the progressive requirement that IT moves closer to the
business. This means that IT heads, whether they have a technology
background or not, will increasingly need to have both a deep
comprehension of business requirements and be able to come up with
innovative technical solutions to business problems.
Lateralthinking
The latter proposition, however, implies being able to
think
laterally. "A lot of it is just about re-purposing someone
else's ideas from other environments and applying them to your
own," says Dowd. "So we'll see the creation of more innovation
teams that look at technology in the widest sense to see how it can
be used in the business to help move it forward."
Quint likewise agrees that delivering pertinent services will
become more about strategy and ideas and less about the technology
per se. "It's like buying a car. They all get you from A to B in
some way, but a farmer wouldn't buy a hatchback as it wouldn't meet
his particular requirements - he'd buy a 4x4 instead. So really
it's about being clear what you want to achieve and delivering it
in the most effective way, while also managing the risk," he
says.
As a result, he believes that not only will IT take on an
increasingly strategic role, but it will also become more and more
embedded in the business so that "you're working not just at the
technical level, but more and more at the information management
level". To do this, however, will require a major rethink of how
the IT function is structured and organised.
A key challenge here, however, is that such a shift may have to
take place against the backdrop of a growing split between front
office and back office IT, with the latter will be progressively
outsourced.
Kucharvy explains: "There'll be a need for an IT function for a
long time, but I think IT teams will increasingly be moved into
business units. The head of IT will have dotted line responsibility
for them, but they'll report directly into line of business
executives to ensure that front-end systems really address business
needs."
Standards-based technology
The two areas will be connected using standards-based technology
such as web services, he believes, but the fall in available
numbers of IT personnel will mean that it becomes increasingly
difficult to justify and afford large in-house teams to manage
back-end infrastructure.
This accelerated adoption of outsourcing models will, however,
both help enterprises to cope with the onshore staffing shortfall
and to revamp their legacy systems, which will become simply too
expensive to maintain and support into the long-term - particularly
as baby boomers with Cobol and other mainframe expertise start
leaving the workforce too.
"I don't think organisations will have any alternative. They'll
have to go through modernisation programmes and migrate to things
like
SOA architectures, standardised software and programming models
and automated hands-off policy-based management tools. For many
outsourcers, this is their focus and they have a lot more skills in
doing it than existing IT organisations, although there are
exceptions," says Kucharvy.
But this situation will also see vendors start to embed existing
deep technological knowledge into their products in order to
simplify them and make them easier to use. This, in turn, will
lower requirements for staff to have that deep technical knowledge
themselves, but will instead push them into more business-facing
roles such as business analysis.
"Career prospects for techies with poor communications skills
won't be that great in the future. CIOs going into the baby boom
retirement era will have to look carefully at people coming through
the ranks to evaluate their social skills as they're going to
become increasingly important. And if staff don't have them, it'll
have to be a case of helping them on their way," Dowd says.
But the same theory also applies to IT directors. As they
progressively become relationship managers rather than technical
experts or even vendor and service provider contract managers, the
need for softer relationship-building and influencing skills will
come to the fore.
"Even only 10 or 15 years ago, we had technology barons running
IT departments and while the current generation has moved on from
there, the next generation will first and foremost be business
technologists and analysts with a lot of soft skills. They may love
technology, but they won't waste time doing IT. Instead, they'll
focus on how they can use it to support business processes,"
concludes Platts.