January 2011 Archives

IT professionals have your say about the state of outsourcing contracts

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Following the success a contribution of reader, Matt, who prepared a questionnaire to get the views from IT professionals about the alleged UK skills gap, I have decided to have a go.

So here is a questionnaire that hopes to get the views of IT professionals about the level of success of IT outsourcing contracts.

Whenever I talk to businesses about outsourcing contracts they are always positive. But we know there are often problems. Knowing what these problems are can help decision makers avoid them.

So this will give IT professionals an opportunity to paint a picture of IT outsourcing from within.

The previous questionnaire had 170 respondents and some very interesting comments.

This is a bit of a Google experiment by me but please take time to fill the questionnaire and I will report the results.

 

 

Infosys feels a sense of urgency at the WEF in Davos

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The World Economic Forum (WEF) blogger, who agreed to give us updates, has sent his third instalment.

 

BG Srinivas, European head at Infosys, kept us up to date with the event last year. On wednesday we featured his first post from the event this year. Yesterday he talked about Russia's president and his defiance against terrorism.

 

Today BG tells us about the urgency for global collaboration.

 

Thumbnail image for Thumbnail image for BG.JPGURGENT COLLABORATION NEEDED TO TACKLE GLOBAL PROBLEMS

 

 By BG Srinivas

"Davos has always been a forum where people come together to discuss social, political and economic issues, with the good intent of all attendees, to go away and embrace what was talked about. What's changed this year is the sense of urgency and realisation; that it is imperative for governments, businesses and people to collaborate to tackle the problems that society is facing - financial, terrorism, poverty, healthcare, and inclusive growth for example. All attendees have realised - be it business executives, politicians, economists or people in the social professions - that an insular and siloed approach doesn't work.

Yesterday, President Sarkozy in his speech stated "This is not a crisis in globalisation; this is a crisis of globalisation." And he went on to say that the only way for Europe and the Euro to survive the debt crisis is to stay united and collaborate, with the stronger economic nations, such as Germany and France joining forces and working closely with other European nations.

On Wednesday, President Dmitry Medvedev used the platform at Davos to address the tragedy of the Moscow airport bombing and made a strong stance that terrorism would not be tolerated:  "All our efforts to further develop the world economy will be for nothing if we fail to defeat terrorism, extremism and intolerance". Again, he talked about how nations can't work in isolation to combat terrorism, but they must collaborate as the act is a global issue versus a national one. 

Both formally and informally, the business community has been discussing how it is vital to create partnerships in the ecosystem to grow, innovate, and find new opportunities; be it with mature or growth markets. Greater collaboration will enable the emergence of new ideas.

The discussions at Davos have focused on the complex global world that we live in and governments, businesses and civic society must collaborate now to solve current issues and partner to innovate and build the future."

UK businesses have booted out hundreds of IT staff and offshored hundreds in last two year

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According to the survey of IT professionals I have been blogging about for the last week, the reality of offshoring's impact on the UK IT profession is clear.

The survey put together by reader, Matt, has revealed a great deal.

On Monday I blogged the results that showed that less than 20% of offshore IT workers in the UK have specialist skills, Tuesday revealed that 80% of IT professionals have had no real pay rise in five years and then wednesday showed results that revealed results that showed that Half of UK IT professionals have received no training in last five years.

Yesterday gave figures on the number of trainee IT graduates being taken on, and today I present the figures about the number of staff made redundant by businesses and the number of jobs sent offshore.

There is a strong correlation if you look at the graphs below.

The amount of businesses that have made over 100 IT workers redundant and offshored over 100 is similar.

The large slices of the pie charts are the number of businesses that have made between 0 and 10 IT staff redundant and offshored  between 0 and 10 IT jobs. Because we cannot differentiate between the businesses that have not offshored any IT jobs and those that have offshored between 1 and 10, I will ignore this stat.

But the number of businesses making over 100 IT workers redundant and offshoring over 100 are significant.

The survey asked: How many IT jobs has your organisation lost in the last 2 years?


And the survey said:

 

Jobs lost.jpg 

The survey asked: How many IT jobs has your organisation moved offshore in the last 2 years?


And the survey said:

jobs offshored.jpg

Russian president sends a message to terrorists at World Economic Forum in Davos

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The World Economic Forum (WEF) blogger, who agreed to give us updates, has sent his second instalment.

 

BG Srinivas, European head at Infosys, kept us up to date with the event last year. We yesterday featured his first post from the event this year.

 

Here is his latest blog post:


By BG Srinivas

"The last 24 hours at the WEF in Davos has presented plenty of opportunities for business leaders to present, discuss and debate the economic hot topics on the agenda.

Despite the tragic airport bombing in Moscow on Monday, Russian Federation President, Dmitry Medvedev, made it to the opening the WEF yesterday. He passionately believed that it was important for him to fly in and use the platform to deliver the message that we should not be daunted by terrorism and it will not be tolerated. He emphasised the need for nations to collaborate to prevent any future attacks.

The rest of his speech focused on the need to modernise the economy in the medium and long term through the increase of trade, innovation and technology. Medvedev, particularly stressed how technology opens up the world to transparent communication and plugs the knowledge gap, so measures should not be taken to prevent or restrict 'the open voice' of the internet. He also talked about growing trade through the ecosystem of Europe and how Russia will be striving to eliminate corruption and develop its socio-economical infrastructure through entrepreneurship.

I also attended workshops on economic sustainability and value chains, which discussed at length consumer preferences, how they want experiences over products, and the requirement to recycle and reuse to sustain the environment. Again, there was an emphasis on how technology will play a role in mobilising society, be it through communication or transport.
In more informal discussions with CEO's, there was greater optimism over the economy picking up and stabilising compared to last year. Many executives are keen to investigate new models for revenue generation, by investing in a partner ecosystem and by building upon the relationships between the developed and emerging markets, which will ultimately add value to the consumer." 

Less than half of UK businesses offer IT graduate trainee positions

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Here are more shocking results from the survey created by a reader of this blog. Light is being shed on the state of the UK IT profession.

A total of 170 IT professionals completed the survey.

On Monday I blogged the results that showed that less than 20% of offshore IT workers in the UK have specialist skills, Tuesday revealed that 80% of IT professionals have had no real pay rise in five years and then yesterday I showed results that revealed results that showed that Half of UK IT professionals have received no training in last five years.

Today we can see that less than half of UK businesses that rely on IT, have taken on graduate IT trainees in the last two years.

Add this to the results of a recent e-skills survey, which revealed that less people are studying IT, and there is a shocking indictment of IT skills and training in the UK.

Why is this? Are UK businesses pinning too much faith on offshore services or has the recession just meant their priorities lie elsewhere.

The survey asked IT professionals the question: How many UK/EU graduate trainees has your organisation taken on in the last 2 years?

And the survey said:

Graduate trainees.jpg

Optimism in Davos as World Economic Forum kicks off, says Infosys

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The World Economic Forum (WEF) blogger, who agreed to give us updates, has sent his first instalment.

 

BG Srinivas, European head at Infosys, kept us up to date with the event last year. We yesterday featured a preview of the WEF written by BG.

 

Here is his blog post:

 

Optimisim for balanced trading terms

 

By BG Srinivas

 

"The mood at this year's World Economic Forum is much more optimistic than it has been in the last two years, as the business community gears up to discuss how to achieve global economic growth in the future.

 

Key topics up for debate are:

 

-Globalisation 3.0 and the opportunities and challenges that this presents for the emerging and western markets;

-Digital media and how this can contribute to support the economy;

-How the western market will address the economic challenges it faces in the near term as it deals with debt and unemployment;

-How the western market can learn from past mistakes and what it should do to avoid a repeat of the financial crash.

 

These trends present more opportunities than challenges and are a catalyst to achieve a balance in business demand as mature markets look to leverage opportunities in the emerging markets. Technology will play a role in this as it will in managing macro-economic challenges such as addressing the shortage in natural resources; essentially it is an enabler to improve productivity to bridge the information gap.

 

Markets across the globe will increasingly look to countries experiencing rapid economic growth, such as China and India, to provide innovation hubs that offer businesses in western countries the opportunity to scale, tap into talent pools and reduce capital expenditure. Globalisation of the economy, through the use of technology enables greater collaboration to achieve balanced trading terms. As the economy continues to recover, collaboration will be key, as all will benefit from greater accessibility to goods, services at more competitive prices and innovation."

 

Also see this link for his four blog posts last year. 

Wipro fixes its European recruitment process as upsurge in applications revealed shortfall

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I had a quick catch-up with Wipro's European head, Jeffrey Heenan Jalil, yesterday.

We talked about a few things, such as the company's strong performance in Europe and its targeting of the UK public sector, which I will blog about separately.

But first I would like to mention what Wipro has done to improve its European recruitment processes. This blog highlighted problems with it last year.

When I met Heenan Jalil in May last year he told me about Wipro's desire to hire more staff local to where they operate. The reason for this is to improve communication with customers. By the end of 2010 it wanted 50% of staff serving European customers to be locals.

He also told me that the company was struggling to find the right staff in Europe. Lots of readers of this blog applied to Wipro and this coincided with a rush of applicants.

This kicked up a bit of a storm because all the people that applied found that they were stuck in the "to screen" stage of the online application for months. There were lots of conspiracy theories as a result.

I suggested in another blog post that Wipro will have to get its act together if it is to achieve its 50% target.

I am pleased to say that is exactly what Wipro did.

Heenan Jalil said following the problems last year the company has changed its recruitment system. It even brought a very senior recruitment executive from India to oversee the improvements. This executive has bags of experience at the Indian campuses. Wipro has also increased the number of recruitment staff involved in taking people on in Europe.

"We recognised that our system was not sufficient to keep up with the large number of applicants coming in," Heenan Jalil told me. "We have brought in a new head in charge of all aspects of recruitment."

Half of UK IT professionals have received no training in last five years

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Here are some more of the findings of the survey that a reader of this blog created. The aim of the survey was to shed light on whether there is an IT skills shortage in the UK or not.

Yesterday I blogged about how 80% of IT workers have had no real pay rise for five years.

Today I  reveal the results of the question about the training being provided by employers to IT staff.

Quite shockingly about 50% have had no training in the last 5 years.

The results support the conclusions of research from e-skills that found that in 2001 35% of IT & Telecoms professionals reported that they had received training in the last 13 weeks. But by 2009 this had dropped to 21%.

It appears that employers might be the ones creating the skills gap. It doesn't matter how good you are, if you don't keep your training up to date you will quickly become unskilled. Many IT professionals have taken responsibility for their own training to keep up. But many of these are freelancers who can sometimes put time aside to brush up. Permanent staff don't have time.

The survey asked the question: As UK employers have been complaining about "skills shortages" for years, one would also expect them to invest in developing the skills of their staff, so how much training has your employer provided for you in the last 5 years?

And the survey said:

 

Training recieved.jpg

Here are some of the comments left in the survey regarding training.

- "Lack of investment by UK companies in their own IT staff. I've worked in the industry as a technical consultant for over 20 years and I despair of the lack of good technical knowledge in many of my younger (under 30) colleagues. "

- "Personally, I think its becoming a self fulfilling prophecy. In-house promotion and training is virtually non existant; people move up the career ladder by moving from one employer to another. Hence, the employers accuse the employees/candidates of being disloyal and refuse to pay to train them and the employees see their loyalty as being only one way with nothing coming back, so when someone offers them something better, they leave."

- "As someone who spent 37 years gaining as broad a range of skills as possible - my last project involved data cubes linked to spreadsheets/datawarehouses - and who then found when dumped into the job market that those skills and experience effectively rendered me unemployable."

- "I am a hiring manager for a successful and growing IT services company. Most of our hires are non-UK but EU citizens. We find that they tend to have a better theoretical grounding in computer science, tend to have learned more from their industrial experience and tend to be better motivated than UK citizens." 

 

Six reasons why 2011 is an outsourcing service buyers market

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Outsourcing broker Burnt-Oak Partners thinks that 2011 could be a buyers market for outsourcing services as supplier revenues decline.

The company believes the fall could be as high as 5-6% in real terms.

Robert Morgan director of Burnt-Oak Partners gives six reasons why 2011 might be a buyers market for outsourcing.

Technological innovation - investment in new approaches and technology has a natural defined cost step reduction built into it. Virtualisation, applications on demand, pay only for what you use etc, have all taken root and will soak up client commodity services at large discounted rates

Existing contracts up for renew or termination - 2011 has an unusual number of outsourcing contracts coming to an end, whilst few will actually stop or change hands, savvy clients will use the times to bargain hard and end up paying significantly less either by going to competition or threatening to go to competition

Multi-sourcing is now seen as too expensive - large retained in-house functions to control the supply / demand interface has not led to better services or sustained cheaper pricing. A more educated approach being adopted by clients is towards the natural pairing of suppliers which results in less management being required, more efficient and effective services and cheaper combined service pricing

Fewer mega deals - are driving the tier one suppliers (IBM, HP) to "need" more mid-sized deals and the competition between tier one and tier two (Atos Origin, T-Systems) has become fierce, with price reduction the prime weapon of choice

Market consolidation - HP now have to prove that the EDS purchase has worked and against a large number of terminating contracts. More recently Atos Origin will need to show that the Siemens IT Solutions  (SIS) purchase will be worthwhile. Both HP and Atos need to achieve sales to prove their investment was sound. Savvy clients will exploit this by sign bargain basement priced deals

The up-turn in Governmental contracts led by the British government will not deliver until late 2011 and even then not in the volume analysts expect. Other European governments await the UK's initiative and leadership especially on shared services, but few governments will bring significant work parcels to market in 2011

Java developers in such demand that banks could use them as currency to repay the nation

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I have been blogging heavily about the UK IT skills shortage debate and I thought I would share some information a contact told me as a response.

 

As you know there are those that say the UK IT skills shortage is a myth used by businesses to justify bringing in cheap staff from low cost offshore locations. But there are those that claim there are real shortages of particular skills.

 

As a result a reader created a survey to answer the question. See some of the findings here.

 

Since reading the blog posts a contact told me that Java developers are in short supply in the UK.

 

He said most of them work for banks and the shortage has become so problematic that businesses are trying to borrow them from banks to fill gaps.

 

This could be a way for the banks to repay the nation for the support of recent years.

 

Are there any Java developers out there with a view? If so please comment.

 

Here are two comments from respondents to the skills shortage survey I mention above.

 

The first claims that even Java developers are not safe.

 

1 - "I am a Java developer and have just been made redundant after spending 10 years with an Investment Bank because 'my role has moved offshore'. Several colleagues were also made redundant for the same reason. There is no IT skills shortage in the UK, however many employers do not want to pay for these skills, they prefer instead to get cheaper less skilled resources from overseas."

 

In contrast the second is positive about the opportunities for Java developers.

 

2 - "As a Java/J2EE contractor (Senior Dev/Tech Lead level) in London I can only speak for myself but the IT industry appears very buoyant! Where I do see jobs going is mostly in the easily commoditised area like HelpDesk and Desktop Support. I have seen dev jobs go but there seems to be a natural pendulum of back of forth as work gets outsourced and then brought in again as they realise that it is not a silver bullet."

80% of IT professionals have had no real pay rise in five years

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A recent survey created by a reader of this blog has revealed the issues facing IT professionals in the UK.

Yesterday I blogged about the skills being brought into the UK from offshore and the fact that most were low level, according to the survey findings.

Today the findings I am revealing are how our 170 respondents' pay has changed in the last five years. The theory goes that if there is a skills shortage, those with skills will be in high demand and their pay will increase.

So the survey asked the question: UK employers have been complaining about "skills shortages" for years, one would expect this demand to be reflected in IT salaries, so has your salary increased significantly in real terms over the last 5 years (excluding promotions)?

And the survey said:

Pay.jpg

Only 20.5% of the respondents have had a pay rise in real terms. What are the reasons for this? Is it the recession, offshoring or the lack of training holding careers back?

But if the skills being brought in are low level shouldn't that be a sign that UK workers should skill-up. Mind you it sounds like many of the workers with low level skills are taking on more complex roles and having to be trained to do so.

Why Infosys is attending the World Economic Forum in Davos

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This week sees the annual World Economic Forum in Switzerland

 

Last year Infosys' head of Europe BG Srinivas agreed to do a blog from the World Economic Forum in Davos.

 

You can see all forur of his posts from the event last year, in this blog post.

 

BG gives us his thoughts on the eve of the event which brings together top business leaders, international political leaders, intellectuals and journalists to discuss issues facing the world.

 

ACHIEVING SUSTAINABILITY IN A COMPETITIVE GREEN WORLD 

 

By BG Srinivas

Thumbnail image for BG.JPG 

"The impending World Economic Forum meeting is striving to address the concerns of many businesses - achieving economic and political stability, whilst weaving through the interconnected complexities of trust and common value issues.  As western economies recover from the downturn and the emerging economies continue to grow at an exponential rate, it will be interesting to witness the debates on how the countries within the mature and emerging markets will collaborate to stabilise and grow the global economy.

 

Within this umbrella conversation, I'm motivated to hear the discussions on sustainability, global competition, and green initiatives.

 

Firstly, how will businesses across the globe continue to compete? We are seeing signs of protectionist measures, which in many ways will impede globalisation. There is trade-off between protecting jobs and leveraging the benefits of globalisation. In the last few years, we've seen organisations (particularly in the western world)  seeking alternative means of pushing up the top line, emerging markets do provide such an alternative, at the same time striving to manage operational costs, do more with less

 

This raises the question of sustainability. Can businesses continue to take this approach and grow their local economy in the long-term? The nature of this strategy is very short-term, with businesses focusing on what they can achieve each quarter. Surely, to sustain the economy, compete in it, grow it, one needs to  ensure conservation of natural resources, reduction of all associated costs for  businesses  and to do this business must look to the longer-term.

 

And for there to be a future, everybody must be committed to the green initiative. The debate is agreed in principal, but at the forum, I would like to hear how at a global level, the green initiative will pan out. Who will be funding the programmes required to reduce the carbon footprint, and how will the developed countries support emerging countries? And with this in mind, it will be useful to hear about the investment in technology that will need to be made to make this happen."

Less than 20% of offshore IT workers in the UK have specialist skills

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As promised I am going to reveal the findings of a survey created by a reader of this blog with the intention of discovering whether there is a UK IT skills shortage or not.

The alleged UK skills shortage is often cited by businesses when they bring workers to the UK from locations offshore such as India. But at the same time there are thousands of UK IT professionals out of work.

The survey, which got 170 respondents,  has revealed a great deal about the feelings of UK IT professionals and has provided a balanced view.

Because businesses cite the skills shortage as a reason to use offshore workers it is interesting to see what kind of skills the offshore staff in the UK actually have.

The survey asked this question: Do the onshored/offshore staff used by your organisation provide rare specialist skills, or do they mainly provide entry-level "cannon fodder" skills?

 

Here are the results:
Skills onshore-offshore.jpgHere is what some of the respondents said about this. They come in two broad groups.

1 - UK IT workers being replaced by cheaper less skilled workers:

- "There is no IT skills shortage in the UK, however many employers do not want to pay for these skills, they prefer instead to get cheaper less skilled resources from overseas.

- "I see no shortage of computing skills among the UK workforce. Rather, skilled British workers are being made redundant so that their tasks can be inadequately performed by unskilled workers (usually based overseas) at a fraction of both the cost and quality. This almost invariably results in a net increase in total cost for the business procuring the work."

- "In my area (Finance IT) there is no shortage of capable UK residents or EU workers to do the job. But for the past 10+ years, companies have been replacing UK workers with offshore or onshored Indian workers who lack the same skills and experience but, crucially, are 20-50% cheaper in gross terms."

- Regarding the quality of offshore staff - clearly if the main driver for offshoring is lower costs then it's no surprise that most are graduates with little prior industry experience.  In my experience, they pick up technical skills pretty quickly but are much slower in learning how to be an IT professional.  There is not the critical mass of more experienced colleagues showing them how to do the job."

-" I worked for major IT company for 20 years, for the last 5 there has been an acceleration in moving jobs overseas (to wherever is cheapest). "Mature" staff like myself were offered early retirement or loss of nearly half our pensions. 99% of jobs I could find internally (over a year long period of looking) were in China/India/Singapore.

Effectively we had a highly skilled UK workforce that is quickly being replaced with cheaper trainees (in this country) who are "let go" after they develop any costly skills while the Far East takes on the jobs that would otherwise pay well.

If I am still working in IT in a few years it will be as a self employed consultant / contractor. There should be no shortage of this sort of job as the third world people (while some are very skilled) are so overworked they quickly move on and use unskilled labour."

2 - UK IT professionals should up-skill and move up the food chain

- "In my experience, we have seen people leaving even during the recession. Recruiting good quality staff to replace them has been exceptionally difficult, with few good CVs and the more promising candidates receiving better offers from elsewhere. All of this seems to be evidence for a skills shortage."

-"As a Java/J2EE contractor (Senior Dev/Tech Lead level) in London I can only speak for myself but the IT industry appears very buoyant! Where I do see jobs going is mostly in the easily commoditised area like HelpDesk and Desktop Support. I have seen dev jobs go but there seems to be a natural pendulum of back of forth as work gets outsourced and then brought in again as they realise that it is not a silver bullet.

I have interviewed about 20 people in the last 15 months on behalf of my current client and the candidate do seem to be grouped into two categories (and this is after having run the gauntlet of recruitment and HR); the first group have a passion for technology and seem genuinely interested in IT while the second regard it as something that pays the bills. The first group read/write blogs, try out new languages and technologies, commit code to open source and so on. The second passively wait to be spoon-fed by their employers and then complain about not getting any training. Or if they do go off an do some training, they regard their work as done rather than the fact that they have got a new bike and have got passed the point where they need training wheels. Passion about IT is one of the most important factors and yet it is not that common."

-"Its impossible to predict the future, but I would not like to think I'll be doing the exact same job I am doing now in 5 years (Network security & ICT support), I'll do my best to keep my skills up to date. But times do change and different jobs are created the entire job, while old ones die out."

-"I think the skills shortage question could be misleading depending on the type of company.

Personally, I've been working mostly for relatively small IT start-ups (20-40 staff) for the last 5 years and we've always had problems attracting competent senior developers of any nationality. In both my current and previous role it has been incredibly rare to get British applicants for permanent senior developer positions and as such we have a very multicultural team. In a couple of cases we've had to take on people with poor English but good technical skills just to meet staffing needs, with the hope that they pick up the language as they go (sometimes it works out well, sometimes not)."

In terms of the quality of out-sourced developers it can vary a lot. My experience of working with out-sourced companies, particularly Indian firms, isn't that the developers are necessarily less capable than UK/European-devs but more that the culture of the outsourcing firms doesn't encourage any development of skills or independent problem solving outside a tightly-defined job spec. This is very obvious when interviewing candidates coming from such firms, typically their CVs look fantastic on paper - lots of experience on large projects in a wide range of technologies, but when presented with complex problems to solve they struggle."

IT professionals tire of poor management and a third expect to leave IT, but it's not all doom and gloom

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The questionnaire created by a reader of this blog, which set out to shed light on the debate about the UK IT skills shortage, has now closed after 170 IT professionals contributed.

I will now write about the findings, which are very revealing.

For example 48 out of 170 (28%) do not expect to be in the IT industry in five years time.

Thanks to everyone that completed the survey.Thanks Matt for putting it together

Here are a couple of the comments left by the final batch of respondents.

"I expect my role to be outsourced within the next 18 months."

"I work in the public sector. I am tired of poor management, lack of vision, the wasting of money and too many colleagues who "swing the lead". The current financial squeeze may improve things, but I doubt it. I also want to work at something which gives me more job satisfaction, even if that means taking a salary cut."

But it's not all doom and gloom with many respondents positive about the industry.

See these blogs for some of the previous comments. IT skills survey Blog 2 - Blog 3, Blog 4 and Blog 5.

TCS's UK workforce is reducing as UK business grows

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India's IT service providers are truly global. This is reflected in the diverse customer bases that they have. But is it reflected in their workforces?

 

Indian suppliers, such as Wipro and HCL, have been talking about the importance of having staff local to the countries they operate in.

 

Tata Consultancy Services (TCS) is India's biggest IT services firm and it seems to be reducing the British contingent of its workforce.

 

In April 2009 TCS had 143,761 employees and 91.7% of these were Indian.

 

Of the 8.3% non Indians (11,932) 8.3% were British (990)

 

In January this year TCS had 186,914 employees and 93.2% are Indian.
 

But of the 6.8% non indian (12,710) 5.2% are British (660).

 

But its UK business has grown. Anthony Miller at Techmarketview has estimated, following the latest round of financial results, that India's biggest IT service provider Tata Consultancy Services (TCS), could be the first Indian company to get in the UK top ten in terms of revenues. He estimates that TCS ended 2010 with UK revenues of about £765m,l which is 17% higher than in 2009.

So as UK business grows for TCS, its UK workforce shrinks.

Click these links for the data on 2009 and 2011.

 


 

TCS could be first Indian supplier to get in UK top ten

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An interesting article by Anthony Miller at Techmarketview was emailed to me by a reader.

Miller has estimated, following the latest round of financial results, that India's biggest IT service provider Tata Consultancy Services (TCS), could be the first Indian company to get in the UK top ten in terms of revenues.

Miller estimates that TCS ended 2010 with UK revenues of about £765m which is17% higher than in 2009.

See the article here.

It looks like it could be moving to 9th by creeping past Logica and Atos.

Problem for many is that its UK workforce seems to be getting smaller, according to a source of mine. He said TCS is taking on UK contracts and the workers via TUPE transfers but then replacing many of them with offshore staff in India.

Sneak preview of London Olympics 2012 IT testing lab

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I was at the IT testing lab for the London Olympics IT yesterday.

Former Olympic track champion Sebastian Coe and Olympics CIO Gerry Pennell got the testing started, which will go on for an estimated 200,000 hours.

Here are a few pictures of the 2,000 square metre lab in Canary Wharf. Ok they are just a fifty odd individual cells of computers, but these are the computers that are going to run the Olympics in London next year. Each cell runs a spoorting event.

 

iPhone pics 009.jpgThe 2000 squre metre lab contains:

70 staff at peak
880 PCs
130 servers
110 network switches

 

iPhone pics 010.jpgEverything is outsourced:

Atos Origin, which is the lead IT partner, first became involved in Olympic IT in 1992 and by the 2004 Olympic games it was the main partner. It is already planning for the Olympics in Rio de Janeiro, Brazil, in 2016.

CIO Pennell has the task of managing and integrating the contribution of multiple suppliers, with support from Atos Origin. He said he is used to managing multiple outsourced service providers, because that is the model that his previous employer, CFS, uses, he says.

 

iPhone pics 011.jpgWho is doing what?

Atos Origin - applications and technology integration
Omega - Timing and scoring systems
BT - fixed network, mobile network and telephony
Cisco - Network infrastructure
Airwave - Radio systems provider
Panasonic - Audio visual, TV and video
Samsung - Mobile communications equipment
Acer - Computers

The future for UK IT is not looking good because the government's immigration cap is "pathetic"

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George Molyneaux, research director for Salary Services Limited, has this month provided some interesting commentary about the government's immigration cap .

He commented on the government's £40,000 minimum pay threshold for Intra Company Transfers staying in the UK over a year.

We know that a massive proportion of non-EU workers in the UK are on ICTs. We also know a massive propotion of these are IT workers from India.

Molyneaux says the minimum pay threshold is pathetic because the average IT developer in the UK gets more than £40,000. Some much more.

But rather than re-writing his concise point here is a cut of his commentary:

"[The £40,000 minimum] is a pathetic approach in that IT developers working in finance in the city are currently being offered salaries that average £56,298 with more senior grades going up to £70,188. The overall UK average being advertised for developers is £42,201. On top of this is the cost to employers of NI and other related costs. The pay figure set by the government needs to reflect the types of jobs being exploited and fix the level accordingly."

He also said: "Government policy on immigration is meant to be curtailing immigration from non EU countries, however it will do little to stop the activity of predominantly Indian based companies using Inter Company Transfers (ICT's) via the onshore-offshore process."

He finishes off with a strong warning: "The future for the UK based IT industry is not looking good, and will remain so until this government puts some teeth into its immigration policy. The import of lower paid IT personnel will continue unabated."

If you click on this link and read the summary at the bottom you will see Molyneaux's comments.

After seeing some of the comments in the skills gap survey I have been promoting on this blog I would have to say his view on the future of the UK IT industry is shared by many.

What can UK IT workers take from strong results at Indian IT giants?

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I was talking to Tata Consultancy Services' (TCS) European head AS Lakshmi today. Like his counterpart at Infosys, BG Srinivas, when I spoke to him last week, there was for the first time a bit of commitment to say that the economy is getting back to normal.


Both companies have posted strong finacial results in the last few days.

 

But should UK IT professionals look positively on this or should they be worried? Obviously with companies such as TCS and Infosys reporting strong results it must be a signal that IT spending is back. But the problem for some IT professionals will inevitable be the fact that many UK based corporates are spending in India and as a result building their offshore staff levels.

 

Could this be the beginning of the end for the in-house IT team? Could the recession's IT legacy be that it instigated the end of in-house IT? Or will that never happen?

 

Last week ladies' fashion retailer Aurora outsourced its IT. There just seems to be more and more outsourcing deals and IT professionals are leaving IT in their droves. Recent figures from e-skills also revealed that fewer students are studying IT.

 

e-skills also revealed that businesses are offering less training to in-house IT staff.

 

If the Indian companies are the Bellwethers of the IT services sector it signals that things are getting better. But an IT services bellwether doing well does not automatically result in UK IT professionals benefitting. In fact it could be a sign that things are getting worse for them because so much work is done offshore.

 

It goes for any of the service providers now. IBM, HP, Capgemini, Steria and many, many more have delivery capability in India. Large businesses also have their own captives in low cost destinations like India.

 

But there could be a glimmer of hope because many of the Indian companies are realising the importance of local delivery. The likes of Wipro and HCL are talking it up. The Indian suppliers are not just providing businesses with low cost services but are providing technology to support strategic growth strategies. As a result there is no reason why UK workers cannot work for them in UK customers. Or is this wishful thinking?

 

Some of these firms add thousands of workers every quarter. But how many are UK workers?

Over a quarter of UK IT professionals have had enough

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The questionnaire created by a reader of this blog, which set out to shed light on the debate about the UK IT skills shortage, has no had a significant 163 respondents.

The number of people filling in the survey  hit 163 now, after a week being online. Feel free to fill it in as I will carry on checking, but I think we have a number big enough to put together some meaningful results. Thanks again Matt for you contribution to the blog.

The first figure that stands out is that over a quarter of UK IT professionals that responded (43 out of 163) do not expect to be in the IT profession five years from now.

As I have done for the previous week I yet again publish the comments of the most recent respondents. I will now beginning to blog about some of the other results.

See these blogs for some of the previous comments. IT skills survey Blog 2 - Blog 3 and Blog 4

Here are some of the latest comments:

1 - "There are fewer and fewer positions available."

2 - "I am an IT Contractor. At least 3 contracts have been terminated due to offshoring to people with supposedly the same skill set but it becomes quickly apparent that they are not up to it. But accountants see bottom line, not quality of service."

3 - "There won't be many IT jobs left in the UK as they are either being off-shored or the large corporations bring in migrants on Intra Company Transfer schemes. This is not because there is a skills shortage at all, come on, can anyone really believe that? This occurs for one reason only, MONEY, its cheaper to bring in migrant workers. I didn't work for 3 months last year, couldn't get any work, I finally landed a job in The Netherlands, as a friend of mine also had to do. So now us UK residents have to go and work abroad because Indian people (mainly) have our jobs, and are probably paying a lot less in taxes than we would be if we were working in the UK! The large companies have members of the government in their pocket allowing them to exploit loopholes in the ICT laws, or even blatantly ignoring these laws. I know for a fact that there are migrant workers that have been working in the UK for over 2 years on ICT's where the limit is supposed to be 18 months. And I could name the company, but I won't here."

4 - "Although I expect to be working in IT in 5 years time the most common problem in the UK is companies cutting costs & corners which results in sacrificing jobs in the UK & the downgrading of jobs in the UK so that salaries can remain the same, i.e. in long term pay less for a job that was paid the market norm 4 or 5 years ago which means no pay increases."

5 - "It appears to me that there is not an IT skill shortage as such - in fact as jobs are off shored, the pool of skill in this country should become deeper - assuming people aren't left out of employment so long they become deskilled.

The IT skills I have seen in offshored people range from competent, but inexperienced, through to non existent - the general consensus is that once you factor in the inevitable language and cultural differences, these resources may cost 1/3 as much as UK people, but you only get 1/3 of the productivity of a UK person.

In my opinion the myth of a skill shortage in IT is just that - a myth - if companies are able to replace people here with 1/3 skilled people elsewhere and still not suffer any consequences.  On the other hand, those people in the UK may well be patching over the skill gap by having to work harder to keep everything afloat..."

6 - "I have had enough."

French government awards French companies contracts. That would never happen here.

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In a recent meeting with Computacenter, its managing director Simon Walsh was calling for the UK government to award more contracts to UK businesses.

Well at least give them a chance.

 

Computacenter is a decent sized IT supplier, but its share of the public sector is Wafer Thin.  

 

There are calls for more use of offshore suppliers by the government and this makes sense, but what about UK suppliers?

 

The reason I write this post today is because I have just seen a press release abut the French government renewing a big contract with a consortium of Steria and Capgemini.

 

I always think governments on the continent do a bit more to protect their own. This, for example, can be done through tough employment laws to protect individual IT professionals from their jobs being offshored, or giving French companies a good chance in winning contracts. It could be argued that there is too much protectionism.

 

We don't want another Common Agriculture Policy, with the French IT industry blockading internet pipes (not quite as dramatic as French farmers on the rampage at ports). 

 

Capgemini and Steria win a lot of business in the UK government. But are they better than UK players like Computacenter?

IT skills shortage in the UK? Discuss

Karl Flinders | 7 Comments
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I have been blogging this week about a survey a reader put together to try and get to the bottom of the UK IT skills shortage.

We went from 41 respondents on the first day to 123 on the second. Now on the third day it appears to have hit a plateau, with 141 respondents. It's a good number and will provide me with lots of material.

Possibly the most interesting part of the survey is the part when people comment on the UK skills shortage and offshoring. I will be reporting much more of the findings in the blog.

I have posted many of these comments on previous blogs. See this link and this link.

And today I have copied the comments, which were posted yesterday, below. A real debate has developed and there is still time to be part of it by filling in the survey here.

Not only is the survey and the blog post receiving good debate, but bookmarking and discussion website Reddit.com has IT workers across the world talking about it. Take a look on this link.

And to the comments:

1 - "I think the skills shortage question could be misleading depending on the type of company.

Personally, I've been working mostly for relatively small IT start-ups (20-40 staff) for the last 5 years and we've always had problems attracting competent senior developers of any nationality. In both my current and previous role it has been incredibly rare to get British applicants for permanent senior developer positions and as such we have a very multicultural team. In a couple of cases we've had to take on people with poor English but good technical skills just to meet staffing needs, with the hope that they pick up the language as they go (sometimes it works out well, sometimes not).

On the other hand, of the few UK applicants we do get, nearly all of them are coming out of large multi-national firms which have outsourced their IT to India.

Probably a big difference is that at the senior developer stage people are looking for a secure position with a clear career path and benefits which start-ups can't really guarantee. Also, there seems to be culture in the IT industry that once developers reach a senior level they move more into project management roles rather than programming which does leave a gap in the market for genuinely experienced coders.

In terms of the quality of out-sourced developers it can vary a lot. My experience of working with out-sourced companies, particularly Indian firms, isn't that the developers are necessarily less capable than UK/European-devs but more that the culture of the out-sourcing firms doesn't encourage any development of skills or independent problem solving outside a tightly-defined job spec. This is very obvious when interviewing candidates coming from such firms, typically their CVs look fantastic on paper - lots of experience on large projects in a wide range of technologies, but when presented with complex problems to solve they struggle."

2 - "Not so much a skills shortage in specific areas, more a lack of candidates with the right mix of skills.....

As more firms are turning to a cloud computing/off shore model, hard technical skills are bound to be in less demand.

As for the quality of the off shore market, you get what you pay for!!

Graduates may have abroad range of skills but none of the soft skills required by modern businesses, these skills should be taught as a part of an IT degree programme.

As an IT manager I would readily recruit graduates but only at an entry level as they do not have the soft skill and experience required for more senior posts. I would expect to loose them after 12-18 months anyway."

 
3 - "I'd like to move into a different field, or I'm going to move away and not really look for an IT job."

4 - "I see many UK IT staff being laid off then projects being run by Asian contractors."

5 - "Because IT won't exist as a viable industry in the UK."

6 - "Offshoring has destroyed the UK industry, by people who know next to nothing about development. Never seen a successful outsourcing operation!"

7 - "There is not a shortage of IT skills!  There is a shortage of experienced EU citizens who have EU living costs being willing to accept Asian rates of pay. Especially considering that offshore, predominately Indian firms, pay reduced Corp tax, do not have to charge VAT, pay their staff minimum wage and include tax free expenses in those payments. I'm all for globalisation, but we need to compare like with like.

Under those circumstances, how is the average EU/UK citizen supposed to compete? While all those captains of industry and civil service mandarins are congratulating themselves on achieving cost cutting objectives and securing their bonuses, who will be left in work to pay the taxes necessary to keep a typical western state functioning?"

8 - "The labour market is a simple economic model.  If demand is outstripping supply, then prices will be higher.  However, with contract rates lower now than they were 5 years ago, and permanent salaries stagnant this would indicate that it is supply that is outstripping demand.
There is no skills shortage."

9 - "I'm a contractor and spent two years out of work due to downturn in 2007. I got back in to work a year ago and am staggered by the increase in the number of offshore, particularly Indian, staff that is now here. Of course there are some competent staff but the vast majority are basically useless and leave indigenous staff to clear up their mess, Management are blind to this as their only concern seems to be the bottom line. I asked one manager where his children would work once all our IT jobs are off-shored. He couldn't answer."

10 - "There is a shortage of highly skilled staff, but there are a lot of staff available who say they can do things that it then turns out they need to learn on the job; sometimes they excel and do the job, but at other times they sit there getting paid and not contributing as much as someone with the skills could have done.

In various cases, especially in small companies, the person recruiting doesn't know enough about the subject they are recruiting for and so picks the best all rounder rather than the best skills for the main role they are looking to employ.

In contract work there is also an issue of people pushing prices lower and lower to a point that is unsustainable in the long run but makes some customers happy. Luckily I am in the position that people come to me through word-of-mouth if they want a good job done well, but I have to turn away potential customers who just want to push the price down and go for the lowest bidder (again because they don't understand fully what they really need a lot of the time and as a more technical person I am not the greatest at explaining that too them without sounding preachy!)."

11 - "There are too many "skilled" non EU staff being brought into the industry or too many companies are outsourcing to the EU countries.  The unions in the UK are soft with companies whereas those in France, Germany are not.  These countries look after the workforce and protect them whereas the UK rolls over and takes it. IT Managers are not the skilled types that they used to be (in my opinion) they are people without skills (IT and Personnel), they are being given the authority to control budgets, training, etc and they just follow the rest... outsource.  This country will be outsourced to other European countries until there is a major problem then (like the non EU call centres) companies will come back when they realise what mistakes have been made.  Of course too little too late."

Council contact centres asked for advice on belly dancing and defecating birds become legal risk

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Apologies for the headline but since I have spent the last couple of days blogging about the ongoing debate about how offshoring is damaging the UK IT profession, I thought I would write about something a bit less depressing.

Siemens Enterprise Services' list of bizarre requests made to call centres fits the bill. When you outsource your call centre you need to make sure your service provider is ready for anything.

The supplier did a survey recently about the traffic pressure call centres are experiencing. The AA apparently had 2,500 call every hour on December 20.

The survey revealed these bizarre requests received by contact centres in the UK:

- Local authorities have been quizzed about belly dancing classes

- Somebody queried the number of sheets there should be on a toilet roll to make sure they hadn't been short changed

-  A power supplier was asked - in light of a takeover by a Spanish organisation - whether customers would now have to pay their bills in Euros

- A car rental organisation was asked to suggest alternative methods of transport in Grimsby

- An online gambling organisation had been asked to quote the odds of the international space station crashing into earth in the next 6 weeks

- Tesco's contact centre was asked to supply Sainsbury's store opening times

- Another contact centre received a call from an irate passer-by, wanting the organisation to pay for their dry cleaning after a bird flew from the roof of one of their stores and defecated on their clothes

- A retail food outlets was asked whether it supplies to the arms trade

Is working in the UK IT profession all stick and no carrot, or is it a myth purveyed by the unskilled?

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I have been blogging the last few days about a survey created by a reader.

Matt, as he is known, created a survey to get to the bottom of the debate in the UK of whether there is an IT skills gap in the UK or not. If you are an IT professional please fill it in.

Yesterday, after the survey reached 41 respondents, I gave an indication of some of the findings of the survey and also published some of the comments.

There have now been 123 respondents so I am updating the stats and providing the next load of comments, which I have put in this post and recommend you read.

Thanks to all that have taken time to support the survey and thanks again Matt for you great work.

Yesterday I said over a quarter of the 41 respondents said they did not think they will be working in IT in five years. Now just below a quarter of 123 feel that way. There will be many other stats when I go through the results.

I think the comments that we are getting tell interesting stories. And it is not all one-sided. Please take time to read the comments below and again if you have time fill in the survey yourself here. If you just want to comment you can comment directly to this blog post.

I will blog about some of the contacts individually but in the meantime here is a selection of some of the comments.

1 - "It feels (and I realise how unscientific this is) that employers are starting to treat people in IT as inter-replaceable, hence the offshoring. There isn't the realisation that people bring individual skills alongside their IT knowledge; whether that happens to be IT skills that aren't within the employee's own domain (for example, developers with infrastructure knowledge), or even non-IT (project management, business analysis).

Employers offshoring their 'IT functions' need to realise that in saving money, they are excluding people who can bring more than just the easily replaceable skills into their business. And, at the same time, maybe the employees need to shout this a bit louder.

Quick note on the survey, a few of the boxes are 0 to 10. I'd consider having 0 and 1-10 separately: you have no way of differentiating between companies who haven't taken on people to those who have taken some on, which might yield more interesting numbers."


2 - "There's just no work out there for a middle-aged woman with a specialism in architecture & design but no qualifications."


3 - "Although acknowledged as being very good technically, and understanding the IT business, I will be over 50 in five years time and feel unlikely to find many opportunities in this price-constrained industry.

What skills shortage? It is all an excuse for the corporates to bring in cheap staff from overseas, or to export our jobs to cheaper locations.

Also, experience costs money. Employers don't want to pay for it, so go for cheaper, less-experienced staff (UK or not). Then they repeat the age-old IT problems brought about through inexperience. Not cost-effective."

4 - "I'm in the second tier of IT support for my company so I deal with a large number of support cases. By necessity I've also expanded into IP Telephony support and fixing major script problems with installation packages and OS images on our Deployment Servers, and had to fight very hard to get any extra financial compensation for these efforts.

From personal experience I can tell you about a major problem in the IT industry that is endemic and no one seems to want to address: the crafty interpretation of employment laws.

The users onsite are often surprised to learn that I'm a contractor, in spite of the fact that I've been here for nearly three years and my job is seemingly a permanent one. Whilst the use of contractors for large parts of the IT industry does make sense (the ability to increase your team size for a short term project for instance) the use of contractors for support services is really an abuse of the spirit in which exemptions to employment laws were made for the IT industry. Essentially by nature, I have to be an autodidact for everything I do because the company will not provide any paid training for me or anything else in terms of benefits which includes sick leave and holiday, Essentially, if I want to take a holiday I have to make sure that I can a) afford to do so (like everyone else) b) make sure that I can afford to miss however many days of work I'll be taking off. If I'm ill then there is an extra worry that missing a day's work means missing a day's pay.

Since I am not a permanent employee, there is also no expectation of career advancement within a company, which is where the problem expands beyond people of my level to the IT industry as a whole. Having seen my pay stagnate in real terms, and with no clear path of progression, I've become very aware that support services is very much a dead end career path as any extra training that I shell out for will not pay for itself for several years. As such, I've come to the conclusion that my future lies in another part of the industry altogether and have trained myself using the wealth of open source materials available on the internet. I doubt that I have been alone in making a decision like this and, having seen my team expand to include people with poorer customer service skills and either an unwillingness or an inability to learn to be better at their jobs, I can't help but conclude that they will be the future of support services, which will be a great shame for everyone. In this, the entire industry has to take the blame for its own sacrifice or long term sustainability for the short term gain inherent in the employment models they choose."

5 - "I have moved from a secondary school where I supported all their needs and also supported primary schools, the IT staff in all of these areas where/are very overworked, literally not enough hours in the day to get the work done and they are massively underpaid for what they do. I have moved from their to a Higher Education Institution based in the Hardware team and found the pay to be much higher and with a much reduced workload, I have then moved into the software/systems team and again found the pay very good and the workload very comfortable. The biggest issue is the limited funding and budget restraints (and some red tape) which stop the company providing the best service it can.

Basically I don't think there is a skills shortage as such but the jobs are not specific enough for the needs of the business, I have found I have now branched out and support a lot more systems than I can maintain well and properly."

6 - "It's not a skills shortage, it's that many managers do not understand IT, and so cannot or will not implement IT solutions based on the technical recommendation of their own technical specialists.

Instead they place their faith in consultants and salesmen who speak the language of management.

A particularly famous example is the Prime Minister inviting the CEO of a foreign company over to discuss how the UK government should spend its IT and training budgets. "Buy our software, install our software in schools, and train school children to use our software. We can do you a discount." was pretty much the sum of the advice."

7 - "I work for an outsourcer with capability in India and the UK (and most other geographies). We find it difficult to recruit the people we need everywhere, not just in the UK. The universities in the UK and India are not turning out people with the rights skills, behaviour or attitude for modern, agile software development. The market which appears to produce the best people appears to be Scandinavia, but they are prohibitively expensive to use anywhere outside their native land."

8 - "As a Java/J2EE contractor (Senior Dev/Tech Lead level) in London I can only speak for myself but the IT industry appears very buoyant! Where I do see jobs going is mostly in the easily commoditised area like HelpDesk and Desktop Support. I have seen dev jobs go but there seems to be a natural pendulum of back of forth as work gets outsourced and then brought in again as they realise that it is not a silver bullet.

I have interviewed about 20 people in the last 15 months on behalf of my current client and the candidate do seem to be grouped into two categories (and this is after having run the gauntlet of recruitment and HR); the first group have a passion for technology and seem genuinely interested in IT while the second regard it as something that pays the bills. The first group read/write blogs, try out new languages and technologies, commit code to open source and so on. The second passively wait to be spoon-fed by their employers and then complain about not getting any training. Or if they do go off and do some training, they regard their work as done rather than the fact that they have got a new bike and have got passed the point where they need training wheels. Passion about IT is one of the most important factors and yet it is not that common.

There are issues in the industry around IT graduates and basic numeracy and literacy but if companies are finding it hard to get the right people, they are doing it wrong."

9 - "The Quango where I currently work is one of those to be abolished over the next 12 months. I'll take the redundancy and the opportunity to get into another profession. I've been a Unix/Linux admin since around 1996 and am ready to hop to something else. There are too many under trained/skilled fools around and I'm fed up with managers that believe every damn buzzword that they hear and immediately buy into it, whilst having no IT knowledge except what they learn from salesmen that are rubbing their hands together to get a huge payout of your tax £££. From what I've seen over the last 5-6 years, It's all salesmen and non technical people running the show now."


10 - "As someone who spent 37 years gaining as broad a range of skills as possible - my last project involved data cubes linked to spreadsheets/datawarehouses - and who then found when dumped into the job market that those skills and experience effectively rendered me unemployable let me bring a different perspective on this.
IT as a profession lost its way when it concentrated inwards on the hardware - software systems and left the business - IT interfaces to the other business professions.  This happened about the time that Unix/C became techie system of choice and accountants were getting used to spreadsheets.  Often the young guy in accounts who liked computers became the IT manager, and being young and inexperienced, could not command a place on the top management committees.

IT then started its migration from being the centre of innovation that transformed businesses to being part of infrastructure services, and any new thinking outsourced to global consultants.  IT now looks inward, plays safe, and is obsessed by recruits having complete knowledge of a particular version of some software package and bits of paper from training providers.  Skills shortages exist only because IT and HR define jobs stupidly tightly, forgetting that the key IT skill is the ability to learn and use new skills quickly."

11 -  "It's impossible to predict the future, but I would not like to think Ill be doing the exact same job I'm doing now in 5 years (Network security & ICT support), I'll do my best to keep my skills up to date. But times do change and different jobs are created the entire job, while old ones die out.

I do think that outsourcing to India will kill the UK. It's not just ICT but other professions. I think cloud computing will be big, not industry changing as people come to realize its just a buzz word, and no long term cost savings. ICT will mostly stay in house (where it should and will always be) Although support for some 3rd party apps may well come from "Dave" in India."

12 - "I am a hiring manager for a successful and growing IT services company. Of the candidates we invite for interview about 1 in 6 make it through the first interview and about 1 in 4 of them make it through the second interview and receive offers.

The most common reason for a no-hire at second interview is when we sit a candidate down in front of a computer and ask them to solve a simple (really, <em>very</em> simple) problem in the language of their choice. Many "experienced" "professional" "programmers" simply cannot do this in a convincing way.

Most of our hires are non-UK but EU citizens. We find that they tend to have a better theoretical grounding in computer science, tend to have learned more from their industrial experience and tend to be better motivated than UK citizens."

13 - "IT is increasingly considered an unskilled job. Hence there is a shortage of "low pay, good-enough staff", hence the desire to offshore or onshore.

Having specific business/ domain knowledge, or just being "down the road", can help mitigate this, but I would not recommend I.T as a vocation."

14 - "Over 50 and few contracts around at the moment for senior staff. Recruitment agencies. are the worst and don't help the industry, don't even have the courtesy to acknowledge job applications."

15 - "Impossible to meet deadlines generated by project managers who have non-vocational degrees and high levels of incompetence and don't understand the problems to judge typical timescales. Glass ceiling for technical hands-on IT staff. In the carrot and stick analogy, working in IT is all stick and no carrot."

16 - "The Skills shortage is a myth, used to justify bringing in labour from outside the EU. Many workers are transferred in temporarily; their remuneration is topped up by Tax and NI free expenses, reducing the overall cost to the employer. The employer can also send them back quickly once a project completes, gaining additional flexibility.

But before the Visa scams began, employers simply used static pay as a disincentive or directly made older UK workers redundant, to make way for younger and cheaper replacements. Now the number of new UK entrants to the industry is rock bottom.

I work in Software development, it's is highly skilled. However, as more managerial people have become IT literate (they can browse the web and use Word), they kid themselves that it's a low skilled job. The truth is yes anyone can write a program, but they can't write reliable maintainable code that you'd want to run your business on. It's like saying anyone can assemble a boat, but would you want to go to sea in it?

The large IT companies lobbied for IR35, because they wanted a difficult tax environment to exist when they made wholesale redundancies. It worked 1000s of people didn't go contracting when let go, instead they left the industry. Cynical? No the Visa guys started coming in, just after IR35 came into force. If you want proof, look at the professions recorded by newly unemployed claimants signing on in the past ten years. Hear in the Thames Valley at one time, 25% of new signees were UK IT workers laid off, to make way for Visa workers. "

17 - "Worked for major IT company for 20 years, for the last 5 there has been an acceleration in moving jobs overseas (to wherever is cheapest). "Mature" staff like me were offered early retirement or loss of nearly half our pensions. 99% of jobs I could find internally (over a year long period of looking) were in China/India/Singapore.

Effectively we had a highly skilled UK workforce that is quickly being replaced with cheaper trainees (in this country) who are "let go" after they develop any costly skills while the far east takes on the jobs that would otherwise pay well.

If I am still working in IT in a few years it will be as a self employed consultant / contractor. There should be no shortage of this sort of job as the third world people (while some are very skilled) are so overworked they quickly move on and use unskilled labour."

18 - "Moved to management already within an ad agency, so out of IT technically."

Is the UK IT profession crumbling at our feet like the car industry did?

Karl Flinders | 12 Comments
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On Monday I blogged about a survey that a reader had created. The aim of the survey is to get to the bottom of the skills shortage debate in the UK.

There is a lot of disagreement on this.

There have been 41 respondents in a couple of days and we are beginning to paint a picture of the IT sector in the eyes of IT professionals.

The more respondents we get the better the more authoritative the survey will be. So we are calling on IT workers in the UK to fill in this quick questionnaire. It is truly independent, even of Computer Weekly, and was created by an IT professional

Just for a taster over a quarter of respondents don't expect to be in IT in five years' time.

But some of the comments left about the state of the industry for UK IT workers paint a Edvard Munch like painting. So if you want to scream about it, once again the survey here is your chance.

So here are a selection of the comments left in the questionnaire.


1 - "[The IT profession] is no longer a nice field to work in. I have even been forced to work for an Indian company at a poor salary, poorer working conditions and then let go the minute they no longer needed me. Yet the overseas workers carry on with a job once I'm gone.

Wonder why I just didn't become a truck driver - Cameron is not allowing those services to be imported despite no shortage."


2 - " The industry is going to disappear in some areas, e.g. wider adoption of cloud will remove whole tiers of the industry.!


3 - "I am a Java developer and have just been made redundant after spending 10 years with an Investment Bank because my role has moved offshore. Several colleagues were also made redundant for the same reason. There is no IT skills shortage in the UK, however many employers do not want to pay for these skills, they prefer instead to get cheaper less skilled resources from overseas."

4 - "In my experience, we have seen people leaving even during the recession. Recruiting good quality staff to replace them has been exceptionally difficult, with few good CVs and the more promising candidates receiving better offers from elsewhere. All of this seems to be evidence for a skills shortage."
 
Either that, or no-one wants to work for this company."


5 - "In my opinion, the so-called skills shortage has its roots in 2 areas.

1) Lack of good graduates with appropriate skills. UK Universities haven't been turning out graduates with the skills UK industry requires for years.

2) Lack of investment by UK companies in their own IT staff. I've worked in the industry as a technical consultant for over 20 years and I despair of the lack of good technical knowledge in many of my younger (under 30) colleagues."


6 - "The recession and Indian ICTs have hit me badly.  As a freelance, I have been out of a contract for 18 of the past 24 months.  I have been told on several occasions that an Indian has undercut me at a rate I cannot afford to meet.

Before 2009, I was never out of work."


7 - "I see no shortage of computing skills among the UK workforce. Rather, skilled British workers are being made redundant so that their tasks can be inadequately performed by unskilled workers (usually based overseas) at a fraction of both the cost and quality. This almost invariably results in a net increase in total cost for the business procuring the work."


8 - "15 years experience, zero training courses with some on the job stuff.

If employers trained or even considered similar skills there wouldn't be a shortage because I would get some work for instance."


9 - "I would like to have a roof over my head, (albeit rented as had to sell my house last year) and eat."


10 - "As a direct result of the recession, I had to take a poorly paid job outside IT. I am now finding it incredibly difficult to re-enter my preferred profession."

11 - "In my area (Finance IT) there is no shortage of capable UK residents or EU workers to do the job but for the past 10+ years, companies have been replacing UK workers with offshore or onshored Indian workers who lack the same skills and experience but, crucially, are 20-50% cheaper in gross terms.

The fact that they usually take far longer to do the same work and do it to a much poorer standard (in my personal experience and the anecdotal experience of others) - hence costing the company more in the long run than their UK equivalents - is ignored. The immediate bottom-line cost is all that matters in the short term view of modern corporates."


12 - "Personally, I think its becoming a self fulfilling prophecy. In-house promotion and training is virtually non existent; people move up the career ladder by moving from one employer to another. Hence, the employers accuse the employees/candidates of being disloyal and refuse to pay to train them. The employees then see their loyalty as being only one way with nothing coming back, so when someone offers them something better, they leave.

The race now, for the bottom line, to do as much as possible for as little, importing staff under ICT's plus Tier1's and a shameful open doors immigration policy is going to leave the UK's IT Industry going the same way as it's motor industry did thirty years ago. I hope to stay in it as long as I can, but the future, I'm finding, looks pretty dark."


13 - "The strategy of the IT board at the bank I work at is to off-shore much of the IT work leaving few opportunities on-shore. No new trainees in IT are being taken on. The net result of this is that only managers will be left on-shore and they will become technically illiterate over a period of time. This to my mind leaves the company exposed since the IT (and security I might add) is in the hands of a third party. Over time they will have the company over a barrel and be able to charge any price they wish."


16 - "Being just over 50 I expect to be squeezed out of my role in the next 12-24 months, after which I don't think I will be able to find any viable IT work so will either have to retire or change fields.

The shortage is only a shortage of people willing and able to undertake the work at (close to) NMW levels. Indigenous workers are unable to take these jobs on because of their financial commitments. Companies offshoring jobs either don't realise that they are also diminishing their customer base, or they don't care because it is a short-term move to improve the bottom line and gain brownie points, and the long-term implications are an SEP (Someone Else's Problem)."


18 - "The UK is drowning in IT staff brought in on ICTs.  I've seen entire development departments with not an English accent to be heard.

If a business only wants to pay £3.50 per hour, they are quite unlikely to find many English applicants. Indian IT firms hire only Indians.

I have also seen British staff forced to train ICT staff before they are made redundant - this is of course illegal."


18 - "Regarding offshoring - in our industry, IT outsourcing is explained as being required to stay competitive in the market.  That may be so, I can't say for sure.

Regarding the quality of offshore staff - clearly if the main driver for offshoring is lower costs then it's no surprise that most are graduates with little prior industry experience. In my experience, they pick up technical skills pretty quickly but are much slower in learning how to be an 'IT professional'. There is not the critical mass of more experienced colleagues showing them how to do the job.

Also, again in my experience, offshored staff are largely monitored and managed by metrics, which broadly you could argue is fair enough. However the concepts of duty of care, or taking ownership & responsibility for the systems you look after, are often lacking. I guess you get what you pay for.

I think there will still be a demand for good staff in the UK, but the more 'run of the mill' employees, I'm not sure. If businesses can get them cheaper elsewhere, that's surely where they'll go."

Are businesses creating an IT skills gap by reducing training?

Karl Flinders | 1 Comment
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Having blogged about the UK IT skills gap debate I have had some great comments from IT professionals.

As I said yesterday one reader, known as Matt, has created a questionnaire aimed at IT professionals to help paint a more accurate picture of the availability of skills in the UK. If you have time please fill it in.

Another reader, going by the name of Argiebee, has also contributed and provided a link to research from e-skills.

It reveals that in 2001 35% of IT & Telecoms professionals reported that they had received training in the last 13 weeks. But by 2009 this had dropped to 21%.

Every big company I have ever worked for has always preached about the importance of training. And I think it is much more important for IT professionals to be regularly trained because technology changes so much. Us journalists have been doing the same thing for thousands of years. Ok the web shook us up a bit, but even then we are basically doing the same thing.

So why are IT & Telecoms professionals receiving less training than ten years ago.

Are companies outsourcing more to save money on training? Where will this leave the UK in the future?

The e-skills report also reveals some figures that might reduce the UK's competitiveness in the future. These are:

- A-level Computing uptake down by 50% since 2003
- 45% reduction in applicants for Computing degrees since 2001. In 2009 only 15,000 people applied for these courses, compared to 27,000 in 2001.

- About 10% of companies with IT and Telecoms professionals report gaps in their skills.
- In three years time this will be worse and training requirements will increase by a third.

But training is going down.

See this link from Argiebee for the full e-skills report (you have to sign in but it only takes a couple of minutes).

 
As well as Matt and Argiebee thanks to the following for their contributions.

Steve Burrows
CodeCruiser
Steve Hunt
Ahmad R. Shahid

Logica plans interesting but not as exciting as I expected

Karl Flinders | No Comments
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I have been hearing speculation left right and centre about Logica since last year.

I got quite excited recently when somebody told me Logica was announcing some big news on January 11 (today). Us journalists get excited about the strangest things.

I thought this must be it. We are going to find out who is going to buy Logica. Names already mentioned to me include TCS and even BT. These are only rumours I must point out.

But no it is a deal struck between Logica and Microsoft. And it is not Microsoft acquiring Logica. It is about Logica selling Microsoft cloud services.



Patni taken over by US IT services firm

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The consolidation in the IT services sector is continuing at a pace.

This time it is a US giant buying an Indian player. iGate is taking over Patni.

iGate was interested in Satyam when it was up for sale and even requested to see the Satyam books. It later backed down.

I was wondering where this would leave the strategic partnership between Patni and 2e2.

2e2 recently signed a five-year £20m contract with Patni. 2e2's internal users and some customers will receive services, including application support and internal IT helpdesk services, from Patni.

 

Calling IT professionals to solve the riddle of the IT skills shortage

Karl Flinders | 3 Comments
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I wrote a blog post last week about the discord within the IT sector about the IT skills shortfall in the UK.

Does it exist or not?

As you all know I am a journalist and I have never worked in IT. I actually have a degree in Development Geography and have studied politics and journalism post-graduate. As a result I rely on my contacts for information

The blog post has received some very informative comments.

But better than that, a regular contributor to my blog, know as Matt, has created a questionnaire aimed at UK IT workers. If he gets a good response we can put together some interesting stats.

Please fill in the questionnaire in this link. If we get a good response we will publish the results.


 

Is the BP way a safe bet for IT service providers?

Karl Flinders | 1 Comment
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I wrote an article last year about IBM's plans to reduce its permanent headcount and make use of many more contractors.

To cut a long story short a senior IBM HR executive told a journalist that that IBM was considering cutting its permanent workforce from 399,000 today to 100,000 in 2017. It would use contractors when needed.

Although IBM denied the report it actually made sense to a few senior IT executives I spoke to.

One said to me that this type of strategy is known as "the BP model." BP uses contractors for almost everything he says.

Today I did an article about BP and the report into the recent oil spill in the Gulf of Mexico.

The spill at the Mocondo oil well has been catastrophic for the local people and the environment and will have major repercussions on BP for years to come.

The report points out that a multitude of factors combined to cause the disaster with the overall failure one of management. For example monitoring systems were not up to scratch

If BP uses contractors for almost everything surely this could have contributed because it is more difficult to manage a large number of individual contractors and contracted firms.

So IT service providers adopting the BP way, or even the IBM way if it happens, must realise the potential repercussions. 

Do we or don't we have a IT skills shortage in the UK?

Karl Flinders | 15 Comments
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Westminister eForum thinks so.

I received an invite to seminar about how to address the UK's IT and computing skills gap from the Westminister eForum . It said there is an estimated shortfall of half a million IT professionals in the UK economy.

When writing about IT outsourcing you cannot avoid writing about offshoring. And when you write about offshoring you cannot avoid getting into a debate about the availability of IT skills in the UK.

There are basically two camps. There are the IT workers and employee groups that say there is not a shortage of IT skills in the UK but there are thousands of unemployed IT professionals.

Then you have the businesses using offshore services that say they cannot find the skills in the UK.

There is lots of evidence to support the claim that UK IT professionals are struggling to get work as a result of the increased offshoring of IT work. For example the Higher Education Statistics Agency (HESA) found that Computer Science graduates are the largest group of unemployed graduates in the UK. Its figures from July revealed that 17% of 2009 computer science graduates were unemployed. This is the highest and the average graduate unemployment is 10%.

So if we are to have a reasoned debate on the availability of IT skills in the UK we need to have a clear picture of the skills available. Are they in short supply or not?

Compass and TPI tie up takes consolidation in outsourcing sector to a different level

Karl Flinders | No Comments
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The IT services sector is consolidating. Mergers and acquisitions as well as strategic partnerships between suppliers will be commonplace this year.

But the advisory and consultancy sectors could also see a lot of activity.

I write this following the news that TPI parent company Information Services group, has acquired Compass. It will bring TPI and Compass together to harness their combined strengths. TPI is a sourcing consultancy which advises big businesses on IT outsourcing, while Compass is an IT consultancy that uses benchmarking to help businesses transform IT.

There is also a rumour doing the rounds that KPMG is going to take over TPI competitor Equaterra. Mind you there has also been talk of Deloitte buying TPI.

It seems to me that these types of takeovers are inevitable.

But is there a risk of receiving too many services from one supplier?

What is Logica going to announce this month?

Karl Flinders | No Comments
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I got wind of an announcement due to be made by Logica this month.

I have not been able to nail anything down but Logica might be about to announce a partnership. This might be with an indian supplier.

Partnerships between UK suppliers and Indian companies might become a trend after 2e2 penned a deal with Patni, which sees Patni provide some offshore services to 2e2 customers and 2e2 itself.

Mind you Logica seems to have been in rumour central for ages, with a lot of talk that it would be acquired. Some have said a large Indian supplier has run a rule over it.

What is in store for IT outsourcing in 2011?

Karl Flinders | No Comments
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It's the beginning of another year. I thought I would kick-off this year's Inside Outsourcing blog posts with some predictions for 2011.

This comes from Burnt Oak Partners' Jean Louis Bravard. He is a director at the sourcing broker and a former global executive at EDS.

It makes interesting reading and I would like to open the floor to all readers. Please send me your predictions for this year and I will blog about them.

Top Ten Outsourcing Predictions 2011

by Jean-Louis Bravard of Burnt Oak Partners

1. One of the Top 5 Indian pure plays will make a significant acquisition of a European player. Further service provider consolidation will occur - likely candidates being CapGemini, Vertex and Tieto


2. Mega deals will rebound as clients understand that multi-sourcing takes too much effort, time and requires too many advisers. Advisors will be under pressure to be held accountable for their advice, predictable risks and speed of the transaction


3. European governments will reluctantly copy the UK and actively outsource


4. UK central government and local councils will demand that service providers buy equity in new shared service centres to ensure "best efforts" and commitment. India providers will be most flexible and therefore successful

 
5. The "Cloud" will not produce much rain as clients struggle to virtualize processes and swim in poor data. New legislation around data "track and trace" will cause rethinking of Cloud strategies and supplier offerings


6. Datacenters are in fashion again!

 
7. Data security will become the new "trick" used by governments and regulators to prevent cross border data processing


8. Improved computer systems and data mobility will increasingly lead to call center jobs coming back from India and other low cost centers


9. Chinese IT will begin to be respected as a serious provider of hardware and software


10. Litigation on IP breaches and data ownership will flare as many recognize that they should have read fine print in 2010

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About this Archive

This page is an archive of entries from January 2011 listed from newest to oldest.

December 2010 is the previous archive.

February 2011 is the next archive.

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