How to employ the unemployed

As we dig our way out of the worst IT downturn ever (The Great IT Depression?), there are suddenly new options in how the pool of talent can be re-employed. We have several factors at play:

• India and China as software factories
• Consulting companies containing costs
• Primary employers interest in retaining expertise

In moving forward to a re-employed workforce I think many people will be looking at these items and trying to visualize a means to put these factors to play.

India & China: Software solutions by the Gross

Just like the production of those cheap plastic trinkets and toys that used to come in candy snacks and Christmas party poppers, software might well be entering an age in which India and China can produce low quality software in such prodigious quantities, and so cheaply, that to go anywhere else is going to take political nerves of steel and corporate pockets that are perceived to be quite deep. These countries are vying to be our software producers of choice, our programming centers away from the office. They have vast, cheap labour pools that are relatively well trained (may not be MIT good, but they are more than able to stand against most corporate programmers I have met) and hungry to grab market share. They are offering software development at rock bottom prices: the expensive ones are at the bottom of the US pay scale ($22/hr was one I saw), the cheap ones can probably code at under $5/hr.

It does not take a genius to suggest that software development in these countries at these prices is going to become a feature of the US work place. Ed Yourdon expressed this more than a decade ago in the book "Rise And Fall Of The American Programmer." Of course then the Indians were nowhere near as well funded or organized as they are today, and neither were they as well cultured in the needs of American and European corporations, but that is fast becoming a non-issue as more and more Indians return home with real experience in a Western corporate setting. 9/11 has probably seen to it that India has now got a huge pool of local talent with up to the minute skills, all waiting to be employed, many with the money to actually start their own businesses selling software to the US, with the contacts necessary to get the work, too.

Consulting Companies: Costs to be Controlled

Consulting companies have taken a pasting recently. My most dire predictions about what could happen came true: When the work dried up they laid-off everyone. With no safety net of alternative employment, consulting companies had no choice but to lay off workers and hope they could ride out the IT Depression without going bust. Not having any other business - consulting companies after all don't actually make anything - they had to get rid of almost everyone. E-commerce departments in many consulting houses simply do not exist today. The cost of rebuilding these groups is going to be horrible, and rebuild they will have to do, as Corporate America gets to grips with the new sales channels the internet offers.

When things come back, what are consulting companies to offer? They will probably not be providers of large teams of developers, nor of the people that architect corporate systems. The big software development efforts will go elsewhere; the architecture might well go back into the corporations. So what is left?

There will be a huge market for integration skills, integrating the cheap software products and custom software coming from abroad, and the specific needs expressed by corporations. This will most likely need fairly low level skills in tools like XML (Talk about nasty jobs!) There may also be work involved in interfacing between custom coders abroad and the corporations that ordered the software. This work will be much more in the project management side of things, and much less based in the technical.

I think, therefore, that the place consulting companies are going to be most relevant is in cost control of the various activities. For years, one of the big problems in IT has been controlling software costs. If we get the production of software down to very low levels, then the management of the implementation costs will be come more visible, and hence easier to manage. This management will be something that most companies will not want permanent staff to do, but would fall to temporary project management teams with accounting skills, quite readily.

Corporate Brains: What do we need to keep?

Corporate American, and to some extent Corporate Europe, have been trying to shed jobs in IT for 20 years. So far they have cut jobs and found that they have increased costs. How did the costs increase? They increased because they had not taken into account that software is not written and used like a door. It is written, used, altered, updated, fiddled with, used for other duties, and finally seen as a basis for something else. This multi-faceted life makes software expensive. It also makes it a challenge in an area that corporations have attempted to limit risk in. The risk was always that someone in the IT department would get up and walk out, going to a major competitor. Well, that now happens on a daily basis, firstly in the form of one of their few permanent employees, someone leaving on their 2 yearly career cycle, secondly on all the consultants that come and go in 3 to 6 month project cycles. Saving the corporate crown jewels in a sieve has never been harder.

Why is this rotation of permanent employees going on? It occurs because most corporations have such a dim view of their IT departments that they are always giving away prime roles to consulting companies, they never bother that they are selling their trade secrets for $150/hr. When permanent people leave a huge amount of knowledge goes out the door with them, frequently that knowledge is unobtainable from any other source. That knowledge consists of atoms of truth about how the software written by the company works to allow departments to work smoothly, or possibly, to work at all. In an age in which computers are nearly ubiquitous, and almost all activities involve interacting with a computer, the corporation cannot afford to loose people that know how this stuff works. Now, no company should be held at ransom by an individual, but at the same time there has to be a balance with respect to the information that the company needs and is held in those precious heads.

Companies need a more vertical approach, rather than the horizontal approach with sideways lines through the org charts, that allow a mix of managerial and technical skills to be retain in the organization with enough depth that the retention of business skills and knowledge can continue without being re-invented every few months as a new IT worker is trained as a replacement. The current predilection for chopping off skills at some level in a company then outsourcing everything below that line is mindless and counter productive. It has never worked, and it never will due in-part to failing to recognise and understand the quantity of day-to-day business knowledge that lives at lower grade levels (pretty much all the actual internal workings of most companies now sit in a Temp's head) and not in a managers head. (To see this at work do a workflow seminar in your company. Using workflow diagrams created by the managers, verify them with the people that implement the flow: it's an eye opener!)

By retaining a group of people at all levels of the IT organisation, a company can clip on the bits of process that it needs (either custom software production, integration or management), and have the interface and knowledge to know when it is being befuddled. These permies need to be good, given support and cover, then the space to do battle with the organisations that are going to be used to fully implement new systems. The in-house junior programmers are going to be needed to maintain the custom Indian or Chinese code, the in-house architects are going to be needed to specify the new systems that these countries are to produce for them, the in-house analysts are going to be needed to create the requirements and make sure that produced systems handle the tasks they were built for, creating as a consequence, work for the in-house junior programmers in the form of maintenance updates - this builds knowledge of how the software works to the companies advantage and own needs. The in-house project managers will be needed to manage the process of vendor selection, project implementation, consultant employment and cost control monitoring. The actual monitoring of projects may be done by a consultancy, but the in- house manager will now have the tools to build and control much bigger projects. The in-house project manager will now become someone with far greater contacts in accounting and finance circles.

Summation

We can continue in the way we have been, and the IT industry in the western world will probably become a shambles.

Or we can seriously think how best to use the talents at our disposal across a broad range of countries and professions, then generate a business solution that everyone profits from. Companies have to be more flexible in today's business world, that may engender a need to carry some IT workers as part of the core structure of the beast we call the Corporation. Software can be bought cheaply now, but its implementation is a cost black hole, consultancies can help tame that ogre.