1. IT Workforce Development: Trends and Implications Kevin Gallagher Florida State University Copyright IT Workforce Team

2. Research Background Why Study the IT Workforce? Why Study the IT Workforce? Reallocation due to global sourcingReallocation due to global sourcing Shift from IT to business process servicesShift from IT to business process services Pending baby boomer retirementsPending baby boomer retirements Declining university IT enrollmentsDeclining university IT enrollments Copyright IT Workforce Team

3. Research Background Sponsored Sponsored SIM Advocacy ResearchSIM Advocacy Research Phil Zwieg Northwestern MutualPhil Zwieg Northwestern Mutual 20 Academic Researchers 20 Academic Researchers Kate Kaiser Marquette UniversityKate Kaiser Marquette University Working in U.S. and EuropeWorking in U.S. and Europe Data Collection Data Collection One hour structured interviewsOne hour structured interviews May to October 2005May to October 2005

4. Collegial Collaborators Kate KaiserMarquette University Cynthia BeathUniversity of Texas Austin Christine BullenStevens Institute of Technology Pamela AbbottUniversity College Dublin Tom AbrahamKean University Erran Carmel American University Roberto EvaristoUniversity of Illinois Chicago Mike Gallivan Georgia State University Tim Goles University of Texas-San Antonio Steve Hawk University of Wisconsin-Parkside Joy Howland Seattle SIM Seamas Kelly University College Dublin Mary Lacity University of Missouri John Mooney Pepperdine University C Ranganathan University of Illinois Chicago Joe Rottman University of Missouri Terry Ryan Claremont Graduate School Judy SimonUniversity of Memphis Rick Wion Smith Bucklin Associates

5. Committed Collaborators Kate KaiserMarquette University Cynthia BeathUniversity of Texas Austin Christine BullenStevens Institute of Technology Kevin GallagherFlorida State University Judy SimonUniversity of Memphis Tim Goles University of Texas-San Antonio Joy Howland Seattle SIM

6. Methods SIM chapter solicitation SIM chapter solicitation Structured Interviews Structured Interviews >100 held (79 SIM members) 89 organizations Non-IT 88%, IT firms 11% Senior IT Management 82% >10 yrs in IT 89% <3 yrs in current position 43% May to October 2005 May to October 2005

7. Mix of Industries among 89 companies

8. Mix of Firm Sizes

9. 74 Non-IT Organizations 15 IT Providers

10. Data Analysis Presented in Upcoming Slides Analysis of organizations - 74 non-IT companies analyzed Analysis of organizations - 74 non-IT companies analyzed Analysis of all other questions - interviews with 83 participants from the 74 organizations analyzed Analysis of all other questions - interviews with 83 participants from the 74 organizations analyzed Provides Provides Greater certainty regarding findingsGreater certainty regarding findings Generalize findings to non-IT organizationsGeneralize findings to non-IT organizations

11. Changes in IT Sourcing Mix Mix of sourcing solutions Mix of sourcing solutions In-House IT staff levels?In-House IT staff levels? FTE use of independent contractors?FTE use of independent contractors? FTE use of 3PPs?FTE use of 3PPs? Mix of domestic and foreign 3PPs?Mix of domestic and foreign 3PPs? Mix of domestic and offshore 3PPs?Mix of domestic and offshore 3PPs?

12. Total projected FTEs remains stable from 2005-2008

13. Expected Change in FTE by Organization Size

14. Expected Change in Total FTEs by Company Size

15. Expected Change in Total FTEs by Industry

16. Expected Changes in Total FTEs by Industry

17. Changes in IT Staffing Levels In-house IT department staffing (IH) In-house IT department staffing (IH) Independent Contractors (IC) Independent Contractors (IC) Third Party Providers (3PP) Third Party Providers (3PP) How did staffing levels changed from 2002 to 2005?How did staffing levels changed from 2002 to 2005? What are the projected changes from 2005 to 2008?What are the projected changes from 2005 to 2008?

18. Majority of companies will add IT staff between 2005 and 2008

19. Changes in IT Staffing Levels 2005-2008 by Company Size

20. Number of in-house IT employees will decline between now and 2008

21. FTE of Independent Contractors Remains Stable from 2005 to 2008

22. FTE Staffing by 3PPs will Increase from 2005-2008

23. Changes in Third Party Providers by Sourcing Location 2005-2008

24. Changes in Third Party Providers by Size and Location 2005-2008

25. Trends and Implications Majority of companies will increase their in-house IT staff 2005-2008 Majority of companies will increase their in-house IT staff 2005-2008 6 % projected decline of In-house staff across all companies 6 % projected decline of In-house staff across all companies Demand for contractors stable at 10% Demand for contractors stable at 10% Demand for 3PPs is growing Demand for 3PPs is growing Domestically and especially offshoreDomestically and especially offshore Especially by Fortune 500 companiesEspecially by Fortune 500 companies

26. Trends and Implications IT Workforce Shortages +=? Declining enrollments in IT related majors Increasing demand across all sectors Baby boomer retirements +

27. Trends and Implications Will shortage necessitate movement toward more global sourcing! IT Workforce Shortages +=? Declining enrollments in IT related majors Demands across all sectors Baby boomer retirements +

28. Trends and Implications More companies are hiring than not More companies are hiring than not Demand is up across all industries and in organizations of all sizes Demand is up across all industries and in organizations of all sizes Yet the number of job in our data remained flat Yet the number of job in our data remained flat

29. Trends and Implications More companies are hiring than not More companies are hiring than not Demand is up across all industries and in organizations of all sizes Demand is up across all industries and in organizations of all sizes Yet the number of job in our data remained flat Yet the number of job in our data remained flat What is an IT worker? Do all IT workers report to the CIO?

30. Skills and Capabilities Critical to keep in-house? Critical to keep in-house? Provided by independent contractors? Provided by independent contractors? Provided by 3PP? Provided by 3PP? Going away in 2008? Going away in 2008? Emerging as important in 2008? Emerging as important in 2008? Looked for in entry-level hires? Looked for in entry-level hires? Looked for in mid-level hires? Looked for in mid-level hires?

31. Skills and Capabilities TECHNICAL TECHNICAL Systems Analysis Systems Analysis Systems Design Systems Design Programming Programming System Testing System Testing Database Design / Management Database Design / Management IT Architecture/Standards IT Architecture/Standards Voice/Data Telecommunications Voice/Data Telecommunications Operating Systems Operating Systems Server Hosting Server Hosting Security Security Mainframe/Legacy Mainframe/Legacy Operations Operations Continuity/Disaster Recovery Continuity/Disaster Recovery Desktop Support/Help Desk Desktop Support/Help Desk PROJECT MANAGEMENT PROJECT MANAGEMENT Project Planning, Budgeting and Scheduling Project Planning, Budgeting and Scheduling Project Risk Management Project Risk Management Project Leadership Project Leadership Negotiation Negotiation User Relationship Management User Relationship Management Working with Virtual Teams Working with Virtual Teams Working Globally Working Globally Capability Maturity Model Utilization Capability Maturity Model Utilization BUSINESS DOMAIN BUSINESS DOMAIN Industry Knowledge Industry Knowledge Company Specific Knowledge Company Specific Knowledge Functional Area Process Knowledge Functional Area Process Knowledge Business Process Design and Reengineering Business Process Design and Reengineering Change Management/Organizational Readiness Change Management/Organizational Readiness Managing Stakeholders Managing Stakeholders Communication Communication SOURCING SOURCING Sourcing Strategy Sourcing Strategy Third Party Provider Selection Third Party Provider Selection Contracting and Legal Contracting and Legal Managing 3 rd Party Provide Managing 3 rd Party Provide IT ADMINISTRATION IT ADMINISTRATION Financial Management Financial Management Internal T HR Management Internal T HR Management IT Governance IT Governance

32. Top Skills Identified as Critical to Keep In House 2005 Business Project MgtTechnicalSourcingIT Admin

33. Skills Least Identified as Critical to Keep In-house

34. Skills Most Provided by Independent Contractors

35. Top Skills Provided by Third-Party Providers

36. In-House Skills Going Away in 2008 because they are Automated, Obsolete or Outsourced

37. Skills Emerging as Critical for 2008 Business Project MgtTechnicalSourcingIT Admin

38. Emerging Skills for Fortune 500 Business Project MgtTechnicalSourcingIT Admin

39. Emerging Skills for SMEs Business Project MgtTechnicalSourcingIT Admin

40. Top Skills Critical to Keep In-House in 2008 Business Project MgtTechnicalSourcingIT Admin

41. Trends and Implications Top critical in-house skills 2005 & 2008 are all from three categories Top critical in-house skills 2005 & 2008 are all from three categories Business domain knowledgeBusiness domain knowledge Project managementProject management Client-facing technical skillsClient-facing technical skills Top skills supplied by IC and 3PPs are all in the Technical category Top skills supplied by IC and 3PPs are all in the Technical category Emerging skills differ by company size Emerging skills differ by company size

42. Trends and Implications As the IT industry matures, Non-IT companies are More focused on leveraging technology for business value More focused on leveraging technology for business value Looking to third party providers to deliver technical solutions and support Looking to third party providers to deliver technical solutions and support

43. Trends and Implications As the IT industry matures Non-IT companies are More focused on leveraging technology for business value More focused on leveraging technology for business value Looking to third party providers to deliver technical solutions and support Looking to third party providers to deliver technical solutions and support Do differences in skills emphasis cyclical or structural changes for the IT workforce?

44. Hiring at mid and entry-level Number of hires in 2005? Number of hires in 2005? Type of entry level positions? Type of entry level positions? Preferred degree? Preferred degree? Desired skill? Desired skill?

45. Mid-Level Hiring in 2005 by Organization Size

46. Focal Mid-Level Positions: Senior Analyst Project/Development Manager

47. Adequacy of Supply by Mid Level Position

48. Skills desired in mid-level hires Business Project MgtTechnicalSourcingIT Admin

49. Mid-Level Position Preferred Type and Degree

50. Hiring at entry-level Number of hires in 2005? Number of hires in 2005? Type of entry level positions? Type of entry level positions? Desired skill? Desired skill? Preferred degree? Preferred degree?

51. Entry-Level Hiring in 2005 by Organization Size

52. Focal Entry-Level Positions are Programmer and Help Desk

53. Adequate Supply of Most Position was Reported

54. Organizations look for technical skills in hiring at the entry-level Business Project MgtTechnicalSourcingIT Admin

55. Skills most often missing in entry-level hires Business Project MgtTechnicalSourcingIT Admin

56. Preferred degree for entry-level

57. Trends and Implications Mid-level hires need project management and business skills Mid-level hires need project management and business skills Most in demand are senior systems analyst & project-development managers Most in demand are senior systems analyst & project-development managers Supply is inadequate for: Supply is inadequate for: IT architects/DBAsIT architects/DBAs Project/development managersProject/development managers Technical and business skills are still needed for entry-level positions Technical and business skills are still needed for entry-level positions Most often missing are business skills Most often missing are business skills Supply is perceived to be adequate Supply is perceived to be adequate

58. Entry Level Skills ≠ Career Success Business Project MgtTechnicalSourcingIT Admin Skills critical to keep IH Emerging as important in 2008 Desired in entry-level hiresDesired in mid-level hires

59. Trends and Implications Sourced from ICsSourced from 3PPs Going awayLeast identified as critical IH

60. Trends and Implications +=? Less hiring of entry level in IT department Sourcing to 3PP for technical skills Demands for PM and senior analyst positions + Smaller pool from which to develop tomorrow PMs and Sr. analysts

61. Trends and Implications Where will tomorrow’s PMs and Sr. system analysts come from? +=? Less hiring of entry level in IT department Sourcing to 3PP for technical skills Demands for PM and senior analyst positions + Smaller pool from which to develop tomorrow PMs and Sr. analysts

62. Some skills are just clearly CORE to organizations User Relationship Management User Relationship Management Negotiation Negotiation Company Specific Knowledge Company Specific Knowledge Functional Area Process Knowledge Functional Area Process Knowledge Industry Knowledge Industry Knowledge Business Process Design/Re-engineering Business Process Design/Re-engineering Change Management/ Readiness Change Management/ Readiness Project Risk Management Project Risk Management Project Integration/Program Management Project Integration/Program Management Project Leadership Project Leadership Project Plan/$/Sched Project Plan/$/Sched Managing Stakeholder Expectations Managing Stakeholder Expectations

63. Other skills were clearly COMMODITIES Continuity/Disaster recovery Continuity/Disaster recovery Desktop Support/Helpdesk Mainframe/Legacy Desktop Support/Helpdesk Mainframe/Legacy System Testing System Testing Operating Systems Operating Systems Operations Operations Server Hosting Server Hosting Voice/Data Telecom Voice/Data Telecom

64. Other are ESSENTIAL Systems Analysis Systems Analysis Systems Design Systems Design Architecture/Standards Architecture/Standards

65. Others are PREREQUISIT, meaning necessary, but not sufficient Programming Programming System Testing System Testing Database Design/Management Database Design/Management Voice/Data Telecommunications Voice/Data Telecommunications

66. Some skills are EMERGING IT Governance IT Governance Managing 3rd party providers Managing 3rd party providers Security Security Communication Communication

67. Trends and Implications Core competencies for IT departments is business, PM and client facing technical skills Core competencies for IT departments is business, PM and client facing technical skills Technical skills are Commodities Technical skills are Commodities Skills in analysis, design and architecture are Essential in all roles Skills in analysis, design and architecture are Essential in all roles Technical skills are still a Prerequisite for entry into the field Technical skills are still a Prerequisite for entry into the field

68. Implications Decline in IT enrolments Decline in IT enrolments Largest growth in outsourcing is overseas Largest growth in outsourcing is overseas Retirements of baby boomers has just begun Retirements of baby boomers has just begun Where will IT workforce of tomorrow come from?

69. Trends and Implications Limits to growth in the current offshore trend Limits to growth in the current offshore trend Hidden costsHidden costs Business risksBusiness risks SecuritySecurity Rising labor costsRising labor costs LegislationLegislation Is the future really outsourcing, or is the move toward co-sourcing?

70. Implications Diverging sets of core skills and competencies in IT and non-IT organizations Business skills, PM and client facing technical systems skills in-house Business skills, PM and client facing technical systems skills in-house Technical skills for independent contractors and third party providers Technical skills for independent contractors and third party providers How does this effect career paths?

71. Next Steps: Future Research Replication of study with IT companies Replication of study with IT companies Software companiesSoftware companies Hardware providersHardware providers IT Service providersIT Service providers CommunicationsCommunications

72. Next Steps: Future Research Systems/Business Analysts Project Managers Relationship Managers Are technical skills a prerequisites? Are technical skills a prerequisites? What do successful career paths look like? What do successful career paths look like? Are career paths and incentives well defined? Are career paths and incentives well defined? What challenges and motivates these workers? What challenges and motivates these workers?

73. IT Workforce Development: Trends and Implications Questions?Comments?Concerns?

74. Expected Change in Total FTEs by Sourcing Option

75. Reason for using an Independent Contractor

76. Reason for using a third party provider

77. Skills Classifications For each skill rank in each of 7 questions 1.Critical to keep in house? 2.Provided by independent contractors? 3.Provided by third party providers? 4.Going away? 5.Emerging as important? 6.Looked for in entry- level? 7.Looked for in mid- level? Desktop support/ Helpdesk 36 532 373330 RANK