Computing research: Outsourcing, cloud computing and job security

By John Leonard
22 Aug 2012 View Comments

UK employers often complain of the difficulty in finding IT staff with a combination of appropriate skills and breadth of experience.

Further reading

“There are skill shortages at the higher end,” says Richard Holway of analyst firm TechMarketView. “Network designers do not come fully formed from the womb. Finding those precious young IT people with five to 10 years’ experience in the latest technologies is like finding hens’ teeth.”

Many blame this state of affairs on a lowest common-denominator approach adopted by businesses and public-sector bodies. IT professionals in this country find it difficult to develop the skills and maturity that employers are seeking. Entry-level IT jobs are hard to find, and for those already in work, career paths are frequently disrupted by technical roles being moved, degraded or lost.

The recent troubles at RBS have brought the issue of outsourcing back into the spotlight, with some pointing a finger at the alleged lack of oversight and quality control at the bank as a result of many technical positions having been relocated overseas.

IT coming home?
Outsourcing has been a fact of life for well over a decade now, with many IT functions, particularly those at a lower level, being exported to low-cost providers.

The economic imperatives that led the first wave of outsourcing a decade ago – cost savings, flexibility, speed of deployment, innovation, time to market, quality and shared risk – remain just as relevant today. However, the nature of the process is changing.

The great rush to shift IT offshore may be over as difficulties in arm’s-length project management have become apparent. Moreover, as wages increase in traditional IT offshoring centres such as India, outfits that once sold their services primarily on price are having to move to a value-added and more proactive model in order to compete with upstarts from China, Chile and Eastern Europe, a step-change that has not yet run its course.

“More people are talking near-shoring,” confirms Holway. “There is now a sense that apprentices are in vogue again. Even the government seems to be waking up to awarding contracts only to companies who create jobs in this country. But it may be too little, too late.”

David Wilde, CIO of Essex County Council, agrees that, in the public sector at least, IT jobs are coming home, citing regulation as a factor.

“If anything, there has been in-shoring in some technical areas. Information governance and compliance is a bigger driver in this space than in the [wider] economy,” he said.

Insecure sectors: finance and public
So, if the offshoring trend really is going into reverse, do UK IT professionals feel more secure?

Seventy-four per cent of the 445 Computing readers who completed a recent survey believe their jobs are unlikely to be outsourced. However, among those respondents who felt threatened by outsourcing, about half said that this threat had grown over the past two years (figure 1).

[Click on image to enlarge]

Those most worried about the impact of outsourcing work in the financial and public sectors, in roles such as systems design and development and support, although IT managers were also more likely than average to express concern.

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