From Information Week {for educational purposes only}

http://www.techweb.com/se/directlink.cgi?ENP19990315S0001

I am not in the field, but sometimes I hear that there are fewer jobs than anticipated. Perhaps this is why.

U.S. Skills Shortage Prompts Integrators To Search Offshore -- India and Israel emerge as key contributors to IT design and software development projects Tim Scannell

Boston - Oil isn't the only precious resource you can find offshore these days.

Hit hard by an acute shortage of skilled technical personnel in the United States, major IT companies and consulting and service firms are turning overseas for technical talent.

In fact, the use of offshore resources has increased substantially as IT managers struggle to complete and test year 2000 software renovations. This involves relying on overseas programming talent from countries such as India, Israel, the Philippines, Singapore and, more recently, Mexico. Software factories in these countries offer a large pool of technical workers and in a lot of cases can provide services that are much less expensive than U.S. alternatives, said some integrators and consulting firms.

"There is a tremendous shortage of system development people, and we just cannot grow organically in that area," said Gabriel Rozman, director of strategic ventures and acquisitions for professional service and consulting company Ernst & Young LLP, New York. "We don't have enough people to do systems development right now in the United States."

There is "clearly a discontinuity between demand and supply," said Bill Dvoranchik, general manager at EDS Corp., who currently leads the Plano, Texas-based company's team in a massive $1 billion state of Connecticut outsourcing project.

"We want to make sure we retain everyone we can that has the technical competency to deliver the services to get where we are going," Dvoranchik said. "But, there is no silver bullet."

U.S. Bureau of Labor statistics and other sources estimate the dearth of technical workers could hit 640,000 or more this year alone. Particularly hard hit are IT departments of companies both large and small that rely on in-house programming to maintain their competitive edge. A recent survey of top IT executives in the United States conducted by PricewaterhouseCoopers (PwC) revealed roughly 23 percent are having trouble finding skilled and trained computer workers. Also, 25 percent of the executives in smaller high-tech companies and 14 percent in larger companies said their current staff is inadequately trained.

The PwC Technology Barometer study involved 154 chief financial officers and managing directors of large, publicly held companies, and 222 chief executives from smaller, privately held companies. It is conducted quarterly to help gauge technology perceptions and trends in top companies.

"We are also very concerned about the quality of services provided by contractors," said Ernst & Young's Rozman, adding that his company relies on hundreds of programmers who work for TATA Consultancy Services in India, which is now a "preferred supplier."

Recently, Ernst & Young signed a letter of intent to acquire a minority ownership in Softtek, the largest software and service provider in Mexico. Under the deal, the company will make use of Softtek's NearShore software factories in Mexico, which already provide offshore software design and development services to many U.S. companies. "Softtek will be a system development arm for large systems projects," Rozman said.

A shortage of programmers in the United States "makes it difficult to get services, and when you get them they are expensive," said Blanca Trevino, chief executive of Softtek. NearShore services range from systems migration and conversion to Web development services, data warehousing and enterprise resource planning (ERP) applications.

Programmers at the NearShore facility use the same automated software tools and methodologies as U.S.-based teams but are more accessible than offshore programming operations located in such places as India, the Philippines and Singapore, Trevino said. Roughly 20 percent of these services are performed at the client's site, while the remainder takes place at the NearShore facility in Mexico.

Ernst & Young also is working to firm up partnerships with design and development companies outside the United States. In February, for example, the company launched a joint venture combining its professional service firm in Israel with ForSoft Ltd., a leading Israel-based provider of IT and systems integration services. The new company will focus on a range of consulting and system design projects, including those targeting ERP and mission-critical applications.

For its part, HCL James Martin Inc., Fairfax, Va., also has turned offshore to beef up programming resources. The IT service and integration company relies on "factory partners" and programming sites in countries such as India to help with applications development, language migration, and testing and quality assurance.

In fact, it has established just such a facility in India with Cisco Systems Inc., San Jose, Calif., said David Coxe, HCL James Martin's vice president of business development and strategic alliances. In most cases, offshore factories are used because they focus on core competencies, he said.

India has rapidly evolved to become the center of offshore programming activities, many integrators said.

Aztec Software & Technology Services Ltd., based there, has worked with Microsoft Corp.'s SQL Server group for more than 18 months on the SQL Server 7.0 release and even developed a few tools for the technology. The company also collaborated with programmers at IBM Corp.'s Almaden Research Center, San Jose, to develop the Datalinks linking technology for databases.

BFL Software Ltd. is another Indian software factory with close U.S. ties. Its client roster includes Compaq Computer Corp. and Federal Express Corp. The company's two factories and more than 400 technical people are located in Bangalore, described as the Silicon Valley of that country. In India, "the technical capabilities and standards are very high," said HCL James Martin's Coxe. Offshore programming not only makes up for a shortage of resources in the United States, but it also "can bring 24 x 7 support and leadership to the table," he said.

Complete Business Solutions Inc., an IT service provider in Farmington Hills, Mich., also is tapping resources in India to make up for a lack of qualified talent nearer to home. The company has established two software development centers and a training center there and derives about 10 percent of revenue from activities in that country.

Company founder and Chief Executive Rajendra Vattikuti, an Indian national, expects this to increase over the next few years as the company expands its use of offshore talent.

-- Mike Lang (webflier@erols.com), March 14, 1999

Answers

Over one hundred thousand software and hardware professionals are working directly or indirectly on y2k.

Perhaps Mitch Radcliffe of ZDY2K can answer this question. With thousands of companies throughout the US wrapping up their remediation, why isn't all this experienced software talent becoming available to firms who need help?

According to the reports we read daily many companies are 80% or 90% through. Software talent should be flooding the market. Why isn't their a glut of software talent on the market?

-- Steve Tomczak (stomczak@tampabay.rr.com), March 14, 1999.

Yeah, they really hate to pay much more than a McDonalds store manager.

-- vbProg (vbProg@MicrosoftAndIntelSucks.com), March 14, 1999.

Being a McDonalds' store manager is an honorable and difficult job. They provide for their families and train ill-equipped teenagers to deal in the real world of trying to provide timely service, a clean environment and fair value to the customer.

You, on the other hand, Mr. IT "professional" have probably never volunteered a minute of your expertise to a small business right around the corner that may be able to use your help.

If you think for one minute that you are more valuable to society than a Mcdonald's manager, you are mistaken. If you ask any McDonald;s manager what year it is, they'll answer, "nineteen ninty nine." They won't say "ninty nine." Get it?

-- PNG (png@gol.com), March 14, 1999.

"Also, 25 percent of the executives in smaller high-tech companies and 14 percent in larger companies said their current staff is inadequately trained. "

Worked as a field supervisor in a security outfit. Was put in charge of the schedule for all the guards in my sector (about 50 guys). You could say I was a telecommuter, except I never went into the office as it was too far away, and I had full time duties already (scheduling was just a clerical task, except it's mission critical of course)

Took three months to get a password to get access to the network. (had to fax changes to the district office, what a payroll mess!!) Then it took a week to get software. And it was another month before corporate mailed the manual. (by which time I really didnt need it, but it helped for some advanced tasks).

A month later the district manager asks "I think we should get you trained on the scheduling software" Heck, I'd already hacked the thing to figure it out on my own.

Management dont know crap. If they did, they mightve saved themselves the lawsuits from guys who wanted their pay.

-- f-it. (f@io.com), March 15, 1999.

"Being a McDonalds' store manager is an honorable and difficult job. They provide for their families and train ill-equipped teenagers to deal in the real world of trying to provide timely service, a clean environment and fair value to the customer."
Actually, I agree, not putting them down. Only quibble I have is -- not my fault or yours that so many ill-trained teenagers. Hello, it is the responsiblity of PARENTS -- who drop litters of kids with no more forethought than cats, dogs, rabbits, and rats -- to rear and train their delinquents in process. It is NOT the government's, not the state's, not my, not your responsiblity -- it's the PARENTS. Get it?

"You, on the other hand, Mr. IT "professional" have probably never volunteered a minute of your expertise to a small business right around the corner that may be able to use your help.
Why should I?

"If you think for one minute that you are more valuable to society than a Mcdonald's manager, you are mistaken."
F*** society. 99% are idiots.

"If you ask any McDonald;s manager what year it is, they'll answer, 'nineteen ninty nine.' They won't say 'ninty nine.' Get it?

I'll have to take your word for that. Incidentally, how do YOU WRITE dates? You still doing it 3/15/99 or even 3/15/99. Why not in standard form for the computer age, as the dates of these posts are given on the main bulletin board page, e.g., 1999-03-15?

-- vbProg (vbProg@MicrosoftAndIntelSuck.com), March 15, 1999.

Steve:

If there were a drastic programmer shortage, you'd expect salaries to be rising fairly rapidly. They aren't. You'd expect job ads to go unanswered. These ads bring in a flood of responses.

My company maintains a fairly long list of 'permanent openings' they make no effort to fill, nor do they need to. This is very common, and it adds to the 'shortage'.

There is no domestic shortage of programmers willing to work 40 hours a week for $80,000. There is no shortage of foreign programmers willing to work 80 hours a week for $40,000.

Gee, how will we *ever* fill this pressing need for programmers? Pay what they're worth? Uh, you nuts? Relax immigration restrictions? Much better, Ollie.

Can you say 'artificial shortage'? Knew ya could!

-- Flint (flintc@mindspring.com), March 15, 1999.