Avoiding recession dangers: the skills time bomb


Avoiding recession dangers: the skills time bomb

2009 is already a difficult year, with governments and organisations alike preparing for a testing time. Corporate spending sprees have quickly turned to cost-cutting initiatives where every penny spent must now be explained and clearly justified, writes Stephen Kelly, CEO of Micro Focus.

One of the first areas to come under scrutiny during difficult times is IT. Businesses of all sizes are totally dependent on their IT, not only to handle their day-to-day operations, but to aid decision-making, achieve competitive advantage and support revenue-generating aspects of the business.

Ensuring businesses have the skills in place to maintain and deliver even more value from these crucial systems should therefore be a priority for 2009. It seems obvious, yet recent research shows that even towards the end of 2008, only one in seven organisations believed they had the skills to maintain their IT in the future; tantamount to a ticking time bomb.

Global organisations are simply not devoting enough time, budget and commitment to safeguard the vital skills required to maintain and exploit one of their most crucial business assets during a recession; their IT. These same organisations are running the risk of finding themselves in a situation where they have no-one to maintain and evolve their core IT systems, which could cause irreparable damage to the business.

Despite the continual advent of new technologies, computing languages and platforms, the majority of the world's systems - from the mainframes of global enterprises to the traffic lights at the end of your street - still run on computer languages developed many decades ago. In a single year, Cobol applications are involved in transporting up to 72,000 shipping containers, caring for 60 million patients, processing 80% of point-of-sales transactions and connecting 500 million mobile phone users. There are 200 times more COBOL transactions every day than Google searches.

In order to maintain 'business as usual', some organisations choose to replace their COBOL systems with more modern technologies. This is both risky and expensive - two traits you want to avoid in the midst of a recession. Others however, in recognising the continued viability of their existing IT, are exploiting what they already have through modernisation strategies.

Of 450 firms surveyed across Europe and the US with annual turnover of between $100m to over $1bn, most admitted that recession brings focus back to their so-called 'core' IT systems, with 60% of CFOs in Europe and the US saying skills to modernise core IT assets are "the most valuable in a recession." So it seems alarming that, as a recession takes hold, the same research revealed these firms are prioritising unrelated skills, in areas such as Web 2.0 social networking technologies, over those they deem as crucial to their business.

In times of economic turbulence, organisations are not looking to rip and replace their existing IT systems, but rather glean value, make savings and mitigate risk by modernising them. The right skills need to be in place to do this, and the recession could very well force a turning point in the skills crisis. With academia, government and business working together to re-focus on their core skills, the ticking of the skills time bomb could be significantly slowed, if not defused completely.

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This was first published in April 2009


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