Shortage of Net skills could hamper UK growth

The huge boom in the Internet marketplace is good news for UK companies. However, as Mark Vernon discovered, a skills shortage...

The huge boom in the Internet marketplace is good news for UK companies. However, as Mark Vernon discovered, a skills shortage threatens that success.

Imagine if as manager of a football team, you walked into your chairman's office one day to be told that from now on, your squad was going to be playing rugby every week. This could be the sort of challenge that faces IT directors charged with rolling out new e-business programmes in the future.

According to Sally Brown, managing director of The Edge, a specialist e-business skills resourcing consultancy, the massive boom in the Internet marketplace over the next 12 months will be accompanied by a serious skills shortage. "If this scenario isn't seriously addressed soon, the UK economy could stand to miss out on billions of pounds-worth of business over the next year," she says. "From my experience in IT resourcing, this is an issue that far outweighs Y2K."

Brown's words of warning are backed up by research. "As today's businesses increasingly depend upon IT, the demand for skilled labour will continue to grow year-on-year," says Andrew Milroy, expertise centre manager of IDC's European training and skills management research programme. "Soon the demand will significantly outstrip supply, leading to inflated salaries, higher operating costs and lower profit margins."

He believes that the growth in demand for skills centred on the Internet-working environment will grow more rapidly than that for any other technology environment, to 2002. "Without a strategy for resolving the IT skills shortage, individual countries, and Europe as a whole, will begin to suffer at the expense of other countries and regions, which are planning more strategically," continues Milroy, adding that the US is already attracting skills across the Atlantic by increasing its allocation of green cards to professionals with IT qualifications and experience.

Overseas rewards

Brown suggests other reasons for the shortage. "First, the potential implementation of the Government's IR35 proposals will make overseas work far more financially rewarding. Second, the UK has been slow to build its infrastructure to support the development of e-skills. The question is: 'How do we make the most of our resources currently available?'"

The same kind of Internet skills are needed by businesses, small and large, whether they bring them in-house or outsource. The only point is that they need them. For example, Waterstone's Online relied on external expertise from Siemens for project management, Brainstormers for Web design, and NVision for integration skills. "This was so new that we had little relevant expertise. It was prudent to outsource to get it right," says Andrew Hatton, technical manager. In-house skills focused on AS/400, although with the Web channel on Solaris, internal people have been trained up.

Take the case of a smaller company, Pure Wine - an organic wine wholeseller. "Our strengths lie in choosing and marketing high quality organic wines. We do not have the time or technical skill to run an e-business solution," says Jim White, director. "It would not have been possible if we hadn't outsourced the control of our Web site. Someone is on hand 365 days a year to deal with potential problems," he says.

Peter Anthony, Elan's UK sales and marketing director, points out that the company's recruitment consultants are already seeing the effects of the IT skills shortage. The problem is that while there are many candidates, particularly graduates, with HTML and Java skills, there are few with commercial experience of implementing a company's Internet and e-commerce strategies.

Another difficulty is finding the more technical skills such as Unix and object oriented programming. "This is a major area of opportunity for IT professionals," Anthony continues. "Though many consultants have some Web experience, there is a lack of specialists. Across the country we are seeing salaries of between £25,000 and £40,000 being offered for Web developers in-house and from consultancies, and because the technology is so young, those with premium technical knowledge and good development experience will be in great demand."

Further, there is increasing evidence that even though the technology is young, advanced Web programming skills are being sought as companies seek an online competitive advantage. Putting 3D shirts on the Web, which is what Nick Wheeler, managing director of Charles Tyrwhitt wanted, called for expertise from CA. "You can zoom in and see how securely the buttons are sewn on," Wheeler says. "This is as close as we can get to giving people the experience of walking into our store, which is exactly the experience we wanted."

"This kind of site cannot be done with a relational database," Sean Larner, CA's senior vice-president and general manager, Europe, says. "Jasmine made it possible to go from concept to full functionality in three months."

Skills swap

All of this begs the question as to whether firms should be renewing their internal skills base entirely. Paul Nannetti, head of e-business at Cap Gemini, tells of a smaller client who 18 months ago went online with such success that it has swamped their traditional business. "They decided to let most of their traditional people go," he says. "They didn't even have six months to train them and so hired new skills there and then." However, although this will be a question faced by those for whom e-business is the whole future, for those with traditional channels too, legacy systems will remain. "I don't see a wholesale clear out of traditional skills, but no one can be held back by retraining," he says.

Others question the wisdom of reducing the internal skills base entirely. "With e-commerce rapidly becoming the mainstream form of commerce, should organisations really be outsourcing what will soon be the very heart of their business?'' asks Howard Inns at the network solutions company Milgo Solutions. "The better informed ones will want to bring as much in-house as they can. But it is hard to do. This is where integrators have a role to play and, ultimately, they will become fundamental to the business of e-commerce."

From a training perspective, Paul Henry, international vice-president of online training firm SmartForce, states that while some skills can be learnt relatively quickly, others require more time and flexibility. "Security skills is one big issue," he says. "We have put together a course that takes 20 to 25 hours for rudimentary principles and technologies, enough to do a secure site for transactions." The course is online, primarily because trainees need the flexibility to do it in their free time.

A final piece of "good" news comes from Roger Willcocks, chief executive officer of iE. "This is all hardly alien to the war-torn IT director putting together business-critical initiatives," he says. "The old disciplines still apply: capture the business requirements, pin down the specifications, manage the programming team and allow sufficient time for testing and documentation."

Even with e-business, some skills never change.

Top e-business skills

Web design - not just technical but combined with marketing and sales experience

Security - for validating and authenticating users; controlling access to payment systems and back-office systems like accounting

Traffic balancing - to ensure availability

Back-end integration - to knit heterogeneous environments together for the Web channel

Systems Integration - for more sophisticated e-business like "click to speak" buttons on Web pages and tying customer-facing systems into corporate systems such as call centres

Programming languages - html, dhtml, xml

Design Tools - Photoshop, Illustrator, Flash, ASP, Director, Fireworks, Cold Fusion

Database - Visual Basic, Sybase

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