"Skills shortage" is largely due to sidelining SMEs
Due to the number of mergers and acquisitions over the past 15 years, the number of IT supplier companies has reduced and the size of those that remain has increased.
As with all sectors, the larger the organisation the more pressure is exerted on costs, which is why many large IT service organisations have sought offshore resourcing. However, the cost advantage of using offshore resources is less than what is often claimed, and it can introduce language and cultural issues.
As the UK services sector consolidated through the 1990s, a mid-tier gap was created between the largest suppliers and the UK's growing population of small and medium-sized enterprises.
The SME community now finds it difficult to do business with larger organisations both on the supply and demand side of the industry. When skills are sought for larger projects and programmes, commentators too readily hail the onset of another skills shortage.
This is not a real skills shortage, but a lack of visibility of the skills in the local IT market. A mid-tier on the supply side is now missing, which encourages UK-based organisations to outsource.
Thriving digital industries
Cities such as Manchester and Liverpool have thriving digital industries with hundreds of SME suppliers in their own "clusters" representing considerable capability that is simply not visible to the corporate purchasers in large IT service providers.
The West Midlands even has its own trade association which has a significant voice in directing the Regional Development Agency's IT investments, out of which have come funded programmes such as OpenAdvantage, which promotes the use of open source software in business.
What is needed is growth and re-establishment of the mid-tier of IT service companies in the UK in order to recreate the supply chain for IT skills. After all, a strong indigenous IT capability is essential to growing and sustaining a strong knowledge-based economy.
Plugging the gap in the mid-tier would significantly improve the supply of skills throughout the industry and reinforce the onshore market.
To start to tackle the situation, three strategies come to mind. First, government and venture capital communities' assistance should be targeted at developing IT service companies in the mid-market.
Second, the UK government should address its own procurement guidelines to stop discriminating against SME suppliers, many of which are immediately disqualified from tendering for work simply because of their size.
Third, the government could insist on IT certification and accreditation schemes that make visible the quality in the growing ranks of the SME IT community, thereby enhancing their business potential both with clients and larger suppliers. This would also help to reduce discrimination against SME suppliers.
This need not increase the burden of training/certification for the supplier community as many qualifications and quality marks are already available for specific skills. What is needed is an umbrella supplier standard or scheme to enable the purchasing community to know what the present plethora of qualifications means and understand the scope of each qualification.
It remains the case that the UK's universities are not undersubscribed for students wanting to study computing or other disciplines in which IT features. The NCC believes a balance needs to be struck between in-house resourcing and outsourcing in the development of corporate IT capabilities.
To ensure that we do not have a skills shortage in the future, a key issue to overcome is that of improving the perception of IT as a career.
A priority here, given its visibility, must be for the government to be an exemplar of best practice. But let's face it, it is not that there are no project failures in the private sector, simply that the public sector comes under considerably more scrutiny.
Supporting the government's agenda for professionalism represents a significant step forward to making IT the career of choice for the UK knowledge-based economy.
Michael Gough is chief executive at the National Computing Centre
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