A growing shortage of skills and talent in IT and business is threatening business growth around the world.
According to Gartner, traditional technical IT skills will not suit the burgeoning demand for developing IT and business together. Several forces are coming together to create a competition for talent. Companies need to adjust their plans for a new reality of constrained resources.
"What constitutes 'qualified people' will change. The intersection of business models and IT requires people with varied experience, professional versatility, multidiscipline knowledge and technology understanding a hybrid professional, in other words," says Diane Morello, vice-president and Gartner Fellow.
There are simply not enough such people available, according to Andy Kyte, vice-president and Gartner Fellow: "This is a massive and devastating skills shortage, and it is coming when there is a surge in the number of projects that are required from IT."
The supply of people willing and able to understand and respond to business challenges will fall short of the rising demand for business change and growth, Gartner says.
This skills shortfall is very different from the shortage experienced during the dot-com squeeze of the late 1990s and early 2000s. Then there were shortages of specific, technical skills and domain-specific expertise.
Today, by contrast, there are shortages of people with more general qualifications, experience and business insight. The focus is on understanding and managing business processes and technology which take time to mature.
Several forces are driving the demand for people with talent covering both IT and business.
First, Gartner has found in informal surveys that most large companies are in the middle of various transformation programmes and they see IT as key to transformation.
Second, they need unprecedented levels of coordination between IT and the business to meet the challenges of globalisation, focus on customers, innovation, extended value chains and brand mastery.
Finally, they are being compelled to modernise and consolidate their legacy IT applications, systems and platforms if only because they cannot find the people with skills to maintain them.
Past investments have created a tangle of IT complexity which can only be solved by throwing people at the task. This is unsustainable given the weight of IT-driven business change now underway and increasing concern with differentiation through customised applications intensifies the complexity and creates the legacy assets of tomorrow.
Many chief information officers (CIOs) see outsourcing as a way of making up for the lack of talent – but that is not a solution, since suppliers are suffering from the same shortages of skills and talent.
Many young people in the West see IT as an unattractive career option: it is both hard work and "uncool" – as a result, there is pipeline of local people emerging with degrees in computer science or related disciplines.
Demographics are making matters worse. People who were born before 1964 - the baby boomers - are nearing retirement and are looking forward to part-time work and entrepreneurial activities. College graduates and 20-somethings are heading towards IT-related work in the media and Internet companies. Young students in the US are not enrolling in science, technology, engineering or mathematics (the STEM disciplines). But these disciplines are attracting students in developing countries. In China, universities graduate about 500 000 IT and high-tech students every year.
"I keep meeting CIOs who say they will be running resource-constrained projects in 2008," says Kyte. "The constraint is not from the budget but from the lack of the right people."
Companies need to anticipate this constraint in their plans. They must expect to pay more for the same output or reduce the level of output that can be achieved from flat spending. They should explore alternative ways of delivering IT service and keep monitoring markets to spot emerging threats.
Identifying the people, competences and roles that will be required has to be ongoing. Companies are going to need people who offer much more than technical certification or specific skills. They will need people with experience in roles such as project management and business process analysis, preferably with professional expertise in such disciplines as architectures, process modelling and portfolio management.