Outsourcing is not a Silver Bullet to the Skills Shortage Issue

Skills shortages amongst Information Technology (IT) professionals, and in particular those in software development, continues to be challenge. Many large (and global) organisations are addressing this skills gap by offshoring positions at developing country wages and also hope to avoid paying the inflated salaries for local or domestic employees. However, this portrays a somewhat false economy as the promised raw cost savings quickly evaporate because of problems that arise due to language, cultural and time zones differences.

In actual fact, companies who outsourced their IT development and support in the last decade have realised that they have now created a long-term pain. They have become over reliant on the outsourcer who has built their applications, owns their code, or provides network support and can charge a premium for any maintenance or enhancements that needs to be carried out.

Research by Deloitte in the latter part of 2013 showed a reversal of the outsourcing trend and that 48 per cent of respondents had terminated their outsourcing agreements much earlier than expected.

Outsourcing is not a silver bullet to the skills shortage issue. Instead, businesses should look to hold onto the people and resources that are differentiating them in the market and providing them with a competitive advantage. Organisations who are progressive and have a forward thinking strategy are now looking to retain the ‘brain side’ of their IT and will only continue to outsource that part of IT classed as a ‘commodity’.



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