Behind Closed Doors:Land of hope and IT glory?

Jubilee or no jubilee, UK computing cannot afford to look backwards. In terms of innovation and competition, we lost our place at...

Jubilee or no jubilee, UK computing cannot afford to look backwards. In terms of innovation and competition, we lost our place at the head of the queue long ago.





The Queen's golden jubilee celebrations are now well and truly under way, possibly bringing a spot of light relief to the daily grind for many.

But don't worry, I am not about to offer you a schmaltzy slow waltz through the past 50 years of UK IT. I hereby declare Behind Closed Doors to be a jubilee-free zone.

This is not an act of fervent republicanism. It is simply that I don't think we can afford the luxury of nostalgia in our industry. We need to focus all of our attention squarely on today and the future, rather than continually harping back to the so-called good old days.

We need to wake up and smell the coffee if we want to have any sort of computer industry left in this country.

For sure, 50 years ago the UK led the world in computing. In November 1951, less than six months before the accession of the queen, the world's first business computer application sputtered into life on the Lyons Electronic Office (LEO) system and our industry was born.

The pre-eminence of British computing rose meteorically for a while, recognised in the famous 1964 declaration by Prime Minister Harold Wilson of "the white heat of technology", until the present day, where it has almost disappeared completely.

Let's face it, when it comes to computing, we are no longer a serious player in our own backyard, let alone on the world stage.

Over the past 50 years our indigenous computer manufacturing base has collapsed and it
"When it comes to computing, we are no longer a serious player in our own backyard, let alone on the world stage"
Colin Beveridge
seems likely that our systems development capability is now about to follow suit.

The days of in-house programming teams have been numbered for a long time, as companies have, naturally, sought to offload the risk of bespoke software development and maintenance to specialist providers.

For my own sake, I can't argue with that rationale because it makes sound sense to me, in much the same way as most companies already buy their fleets of cars, lorries and vans ready-made.

So why should our business-critical software be treated any differently?

I have long believed that all major development projects would gradually migrate from our internal computer departments towards specialist software houses, taking the staff with them into centres of excellence and expertise.

The economies of scale and consequent cost-benefit analysis are extremely strong business drivers for such an approach. Eventually, I can see all development work being bought in, rather than built locally. Indeed, for many of us this proposition has already become a "no-brainer" decision, a reality.

So far, so good, then. I am simply describing a future where the workload shifts slightly, from the local engineers to software "manufacturers".

This scenario clearly has parallels with the Industrial Revolution, when great factories and mills aggregated the work previously performed by a widely distributed, largely independent, workforce.

For almost 200 years, these great, grimy industrial powerhouses were the engine-room of a world-leading economy. I suppose the present Government would hope that information technology could help history to repeat itself and put us back on the top of the pile.

Sorry guys, it's not going to happen.

Individually we can still cut the mustard, but collectively our native power is steadily diminishing. Just look at our exposure to the incipient Microsoft licensing changes and our apparent impotence, despite prime-ministerial cosying-up to the Boss.

On the surface, we are seeing a consolidation of capability into stronger service providers, delivering a portfolio of products through outsource contracts. The ICT market is evolving and shaking itself out, with some spectacular casualties along the way.

However, almost without exception, our major service providers are global undertakings based overseas. Likewise, the vast majority of products that we use, both hardware and software, are manufactured elsewhere. So where is the real bottom-line value to our economy in the long term?

Please don't get me wrong - I am not advocating a protectionist policy. I am just trying to put an important issue on the table - pragmatism. Quite simply, we have to realise that our world of business computing is about to change, both rapidly and radically.

The first wave of change was driven by the widespread adoption of outsourced services. Like most early stages in an evolutionary process, this phase was more about reorganisation and redistribution of effort than real revolution. Cost and effort were simply displaced as staff transferred from one cap badge to another, often without moving desks.

All in all, this may have been a sensible exercise despite arguments that it has been a zero sum equation in some situations.

But now the UK computing industry has reached a genuine turning point.

On analysis, most IT activity has already matured to the point of commoditisation so the next logical step in the maturity process is for manufacturing demand to gravitate towards the lowest cost of provision. In other words, where can we get the work done cheaper, faster and without compromise on quality?

Just like our industrial manufacturing predecessors in the 1970s, our systems development and application "factories" are, increasingly, finding themselves faced by serious competition from emergent computing economies, empowered by the twin engines of the World Wide Web and cheap broadband communications.

For intangible products, such as software, digital distribution across the Web has practically eliminated many of the difficulties associated with transportation and shipping, so the calculation very quickly boils down to comparative staff costs.

This was the principal lesson to be learned from earlier manufacturing struggles and I believe that it will apply to the software industry, only quicker.

I already know where I can rent an offshore turnkey software house with 15 staff for just over £6,000 a month; or for the same money I can get a 40-seat call centre. At those rates, it's going to be impossible to prevent more and more of our development and support work migrating offshore over the next five years.

Napoleon once dismissed Britain as a "nation of shopkeepers" and lived many years to reflect on his contemptuous remark.

In computing terms, however, I think that we are now about to become a nation of administrators, operators and maintenance workers - all of which are essential roles but also command only the lowest values, in revenue-earning terms, corporately and individually.

Other countries will reap the rewards of our premium-rate computing activities at a significant cost to the economy - unless we take a leaf out of their book and get our act together at the national level to remain competitive before it is too late.

Perhaps we need to write a credible business continuity plan for the UK?

Can the UK catch up?
Or have we had our day as a great power in IT? Let us know with an e-mail >>. CW360.com reserves the right to edit and publish answers on the Web site. Please state if your answer is not for publication.

Colin Beveridge is an interim executive who has held top-level roles in IT strategy, development services and support. His travels along the blue-chip highway have taken him to a clutch of leading corporations, including Shell, BP, ICI, DHL and Powergen.

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