going further together IMPLICATIONS OF OFFSHORING FOR THE ICS DISCIPLINES Elizabeth Sparrow Chair, BCS Working Party on Offshoring and author A Guide to Global Sourcing

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

Definitions In-house Outsource Offshore Nearshore Offshore Nearshore

Sourcing models Service ResponsibilityDelivery Model Retained in-houseIT departments Acquisitions Organic growth SharedShared services Joint ventures Alliances Transferred to external service provider Outsourcing service suppliers

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

Market growth IDC says that global offshore IT services will continue to grow at a remarkable rate TPI says that nearly half of new outsourcing deals involve some global service delivery TPI finds that nearly half of the value of these new outsourcing contracts is moved offshore IDC says that offshore suppliers have begun to pose a serious threat to incumbent service providers

Global sourcing examples Thames Water outsourced to Wipro Tescos own centre in Bangalore Britannia Airways hybrid model with LogicaCMG DHLs centre in Prague Colgate-Palmolive used EPAM developers in Russia and Belarus Shells centre in Malaysia and outsourcing to Indian suppliers

Global trade in IT services Major traders in computer and information services, 2000 and 2003 Source: World Trade Organization, 2005

Jobs exported through offshoring Total number of jobs exported (offshore outsourcing and offshore subsidiaries), 2002–2004 Source: Rosenthal, 2005

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

Our competitive strengths Unless we understand our achievements and abilities we may underestimate global competition and miss out on opportunities in the future StrengthsWeaknesses OpportunitiesThreats

SWOT analysis for Britains IT profession Strengths Software innovation and hardware pioneering developments Experience in managing large, complex programmes Good problem-solving and analytical skills in new areas of work and a culture that encourages creativity Multicultural society and professionals drawn from different ethnic backgrounds High standard of general education Weaknesses Professional training too focused on short term technical training Many professionals lack formal accreditation and training Lack of multilingual skills Britain has traditionally had a low regard for technical and engineering education and skills Opportunities Business analysis and process re-engineering projects Biotechnology and nanotechnology developments Development and management of safety critical systems where low risk is paramount Outsourcing advisory services Threats If low level work is moved offshore this leaves fewer opportunities for basic skills training IT careers may be seen as offering poor prospects and may attract fewer good candidates University research at limited locations means few graduates benefit

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

A new career model for a new era Business skills development Programme management experience Soft skills training Supplier management, negotiation and relationship development Specialist technical training Foundation IT training IT professionals embedded in business areas Project and programme management IT strategy managers IT service and contract management Technical specialists

IT occupation changes

Old attitudes Premium salaries are the norm Soft skills are an optional extra for those interested in management IT careers are for those who love technology IT is separate from the business Sometimes business people move into IT but they dont really understand technology New attitudes Salaries closer to rates for other professional roles All IT professionals expect to develop interpersonal and technical skills IT careers are for those who love to find out how technology can help others IT is seen as a fully integrated part of the business IT people regularly move into and out of other business functions gaining a rounded experience Developing tomorrows IT professionals

Helping yourself to a successful career Invest in your long-term career Monitor skills shortages and employment trends Dont get locked into a technical role that is eminently suitable for offshoring Be aware of the business skills and domain knowledge you possess Make use of training opportunities to broaden and deepen your skills Adopt lifelong learning BCS Working Party on Offshoring tips:

Gartner tips for IT professionals Master the underlying principles Be prepared to change your attitudes Develop your interpersonal skills Use opportunities to broaden your business knowledge Become an agent of change, not a victim Source: Computing, June 2005

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

Recruiting tomorrows professionals Higher Education Funding Council (HEFC) identified computing/IT as a strategic subject area of national importance Forecasts by e-skills indicate that Britains IT workforce will need to grow substantially over the next decade to sustain the UKs competitiveness But applications to study computer science and IT at school and university are falling dramatically HEFC asked the BCS to lead an initiative to increase the number of students studying computing/IT

Recruiting tomorrows professionals Applications to undergraduate courses in core computing disciplines: UK home students only Source:

Recruiting tomorrows professionals Projected changes in the population of year olds Source: Higher Education Demand, , HEPI

Schools survey quotations Quotations from focus groups and questionnaires… ICT is a lot of work but its all repetitive… when they took the coursework out of maths loads more people started choosing it ICT is not at all difficult but its very time consuming ICT is a waste of a GCSE I am not going to study Computing/ICT at university because the subject becomes mundane using standard software ICT is really repetitive… its all spreadsheets ICT is extremely boring and mundane I did ICT and I never want to annotate another screen shot

Challenges and issues Joined-up thinking: Schools Universities Employers Government funding incentives Computer Faculty and Business School

Challenges and issues Computer Science or IT?

Challenges and issues Undergraduate or postgraduate? STEM subject or business management? Improving public perception and understanding

Implications of offshoring Definitions The global IT services market The UKs competitive strengths Career development in the era of global sourcing Challenges and issues BCS offshoring publications

Offshoring publications A Guide to Global Sourcing by Elizabeth Sparrow, 2005 Offshoring: a challenge or opportunity for British IT professionals? BCS Working Party on Offshoring, 2004 Embracing the Challenge, Exploiting the Opportunities: building a world class IT profession in the era of global sourcing BCS Working Party on Offshoring, May 2006

Recent BCS press release BCS is warning that the shortage of computing/IT graduates could imperil long term success for Britains expanding IT economy The future success of the British economy … will rely on the delivery of computer science graduates. The UK is not delivering these with the threat of a major skills gap opening in our thriving IT industry David Clarke, BCS Chief Executive, Nov 2006