IT WEEK • 13 DECEMBER 2004
32 COMMENT Will the UK government improve the
way it runs major IT projects in the coming year?
32 INTERVIEW Firms should
outsource in moderation
MANAGEMENTWEEK
WHERE TECHNOLOGY BECOMES BUSINESS REALITY
Editor: Madeline Bennett
IT pay rises keep key staff
Claire Pope
ifficulties in retaining IT staff are
likely to fuel salary increases for
technology professionals next
year, according to experts.
Pay rates for a range of technical IT
skills, including those for networking, messaging, groupware and applications development, have already seen a turnaround
over the past year, according to the IT
insider compensation benchmarks and employment trends report by salary data
research firm Foote Partners.
Pay for networking roles has increased
by six percent in the past year, and skills
related to applications development and
programming languages have been rewarded with a four percent increase.
Though pay for other IT skills fell over
the same period, Foote Partners predicts
that an upwards salary trend is set to continue into 2005. One reason for this is the
pent-up demand for upgrades and systems
enhancements – delayed in 2004 because
IT resources were allocated elsewhere to
meet deadlines for complying with new
D
rules such as the US Sarbaneslast week launched a qualification
HOT SKILLS
Oxley (SOX) Act.
to help organisations comply
Increased demand for cerwith the Freedom of Information
Storage
tain specialist staff could bring
(FOI) Act data access regulations
with it the re-emergence of a
that come into force in the new
Security
skills shortage. Consequently,
year. Peter Leavy, campaign manmany organisations may have to
ager for qualifications at the BCS,
Networking
offer higher salaries to retain
argued that demand for IT skills
their current staff in an increasis changing. “As the IT industry
Web services
ingly competitive environment.
changes and greater regulation
“The IT decision makers are
comes in there is going to be the
Messaging
looking for ways to keep A-team
need to ensure that staff do have
players from jumping ship and
the soft skills as well, particularthis is showing up in premium skills pay
ly with something like FOI because it is a
increases,” said David Foote, president and
legal act and the ramifications could be
chief research officer at Foote Partners.
severe if firms don’t react now.”
A recent rush to comply with corpoHowever, Leavy added that paying emrate governance rules such as the SOX Act
ployees market rates is only one aspect of
has spurred demand for IT consulting
staff retention. “Pay used to be the most
services, according to Foote. The high costs
important thing by far in the early 1990s,
of such services could encourage firms to
but as people are developing and looking
develop their own in-house IT compliance
more to career progression there is greater
specialists. From next year it is likely that
importance on giving recognition for skills
more IT professionals will receive formal
and helping people develop them,” he said.
training in compliance and may receive
“The only way to benchmark these skills is
pay increases to reflect their new expertise.
by giving them a qualification.”
Keep learning, keep earning, p26
The British Computer Society (BCS)
Oracle unbundles BI tools
BUSINESS INTELLIGENCE BREAKS FREE
Microsoft Excel spreadsheets, said the firm.
And a BI Beans feature is designed to enable Java-based custom BI application
development for integration with nonOracle databases and warehouses.
The new product is the result of Oracle unbundling the business intelligence
component from its Application Server
product. “Our definition of an application
server is much broader than that of our
competitors,” commented Oracle’s president, Charles Phillips. “It has been our
strategy to get as big a footprint as possible
in our customer base, and it has proved
effective at keeping our competitors out.”
Phillips added, “Now we are unbundling the tools to expand that footprint,
reach new markets we haven’t reached
before and keep growth going.”
The theme at last week’s OpenWorld
event was information management, and
the database giant presented its portfolio as
a complete platform to achieve better inte-
from its Application Server.
The product includes Discoverer –
a query, reporting and analysis tool
for relational and Olap data.
It also has a Warehouse Builder
tool and capabilities to analyse data
directly from Excel spreadsheets.
Miya Knights in San Francisco
t its OpenWorld event last week in
San Francisco, Oracle launched its
Business Intelligence 10g product, finally
breaking the tie between its BI tools and
Application Server.
Business Intelligence 10g contains a
query, reporting and analysis tool called
Discoverer for relational and Olap data;
and a Warehouse Builder component for
carrying out extract, transform and load
functions to create data warehouses with
consistent levels of information quality.
A Spreadsheet AddIn component allows
employees to query, display and navigate Oracle
Olap data directly from
A
Phillips: wider
range of tools
itweek.co.uk
Oracle’s new Business Intelligence
• 10g
product separates its BI tools
•
•
gration and performance from IT. Phillips
said that technology is increasingly used
to manage data and produce meaningful
information relevant to each organisation’s
needs, as opposed to delivering competitive advantage in itself.
“Applications have not followed the
enterprise into the information age,” Phillips argued. “And we all know too well the
high price of bad data in the real-time
enterprise,” he added.
Oracle Business Intelligence 10g will
be generally available in the first quarter of
2005, according to the firm.
www.oracle.com/bi
CONTENTS
32 COMMENT Following a number of
high-profile IT systems failures in
the public sector this year, can we
expect to see an improvement in
2005, wonders Madeline Bennett
37 INTERVIEW Nigel Roxburgh, head of
the National Outsourcing Association, explains why outsourcing will
not fix all ills, but for some roles it
can bring cost and focus benefits
Retirement
looms for
legacy apps
Martin Courtney
Almost four-fifths of UK companies
could ditch up to a third of their legacy applications by 2008, as outsourcing issues and the need to comply
with new regulations cause IT
departments to modernise systems,
according to recent research.
A survey of 100 UK IT directors
conducted by applications management specialist HAL Knowledge Solutions indicates that 40 percent of IT
resources are currently dedicated to
maintaining and supporting legacy
applications.The firm concluded that
IT directors need to manage this
process more efficiently so they can
allocate staff and money elsewhere.
HAL’s Mark Kusionowicz defines
legacy apps not as those that are necessarily old and outmoded, but current apps still running core business
processes and dealing with large
amounts of corporate data, either
designed and written in house or
built by bespoke software providers.
Kusionowicz believes the pressing
need to comply with corporate governance rules and demonstrate value
to the board will now force many IT
departments to upgrade or replace
these applications with standardised
versions that can be more easily
audited according to new rules. But
the timescale for upgrading is dictated largely by outside influences.
“The danger is that the response
to the burden of change will get
more and more expensive and that
corporates will not be able to
achieve it within the budgets and
timescales given,” said Kusionowicz.
Packages like HAL’s Application
Portfolio Management system are
available to help firms support and
maintain their apps infrastructure,
and keep track of the apps being run.
www.halks.com
31
MANAGEMENTWEEK
IT WEEK • 13 DECEMBER 2004
Will IT bring a more civil service?
Will the efficiency of government IT projects improve thanks to increased competition
and the Freedom of Information Act, or are more fiascos ahead, asks Madeline Bennett
T
his has been yet another year
of high-profile IT failures in
the public sector. Last month, The
Department for Work and Pensions decided to carry out a “routine desktop software upgrade”,
which left most staff without access
to payment processing systems.
And we’ve also heard reports
that the Child Support Agency’s
IT system is not quite as efficient
as expected, despite having passed
two official reviews. Apparently,
almost half a million maintenance
claims have been filed in the system over the past 18 months.
However, not many more than a
tenth of these requests for support
have led to a payment.
Next year will see the introduction of the Freedom of Information (FOI) Act, and perhaps
some more successful outcomes
for government IT projects. As of
January, public sector bodies such
as local authorities, the police,
central government and the NHS,
will be required to comply with
new FOI data access rules, and
share certain information that they
hold about their services and operations, on request.
The FOI regulations will also
allow IT vendors to ask for more
detailed information on the public
sector tendering process, and perhaps this will encourage more
competition and innovation.
At present, the government tends
to favour larger vendors and incumbents when awarding contracts for
technology projects. Given the many
failures and problems of current
projects, there may be good arguments for new suppliers.
More competition could also
encourage the current favoured
suppliers to perform better – if
they feel that there is a real chance
they could be ousted.
But these potential benefits rely
on the FOI Act being properly
implemented – no mean feat. Each
public authority has reams and
reams of data stored on their systems. So unless they already have
first-class content management and
archiving systems in place, it may
be difficult for them to pinpoint
the requested information within
the maximum 20 working days.
This could verge on the impossible
if they receive a deluge of requests
around the FOI Act’s start date of 1
January, as expected.
Indeed, a parliamentary committee last week warned that many
public sector bodies will not be
ready to deal with requests at the
start of the new year. It said the
Department for Constitutional
Affairs had failed to offer adequate
early guidance to authorities to
help them meet their responsibilities, and that compliance would
only be possible if there were few
requests for information at first.
The report also predicted a lack
of consistency, with some bodies
likely to give out information
freely, while other bodies would
Outsourcing in moderation
Nigel Roxburgh of the UK’s National Outsourcing Association
explains why outsourcing is not a panacea, but when used in
the right way can bring benefits in terms of cost and focus
IT OUTSOURCING INTERVIEW BY MARTIN COURTNEY
N
igel Roxburgh is a founding director
of the National Outsourcing Association (NOA), an independent, non-profit
body set up to ensure effective outsourcing
through the promotion of best practice,
service and innovation within the industry.
Its members include outsourcing suppliers
and consultants, as well as organisations
seeking advice about outsourcing.
Roxburgh is keen to dispel any fears
that the current trend for companies to cut
back in-house operations and to outsource
more work will result in
mass redundancies for
IT professionals in the
UK. Roxburgh firmly
believes that as long as
the economy remains in
good health, there will
Roxburgh:
job loss is rare
32
always be other opportunities for IT workers.“In organisations that grow, rarely does
outsourcing result in redundancies,” Roxburgh explains. “The risk is for those who
are working for organisations that are
shrinking or static.”
Roxburgh adds that research suggests
offshoring has not caused a net loss of IT
jobs in the UK.“Though if there is a downturn, things might be different. The net
result from call centre expansion [so far] is
that the number of UK seats has grown
through the strength of economy.”
Most organisations travel the outsourcing path in the pursuit of lower operational costs, but this is only one of the
benefits that external contracting can provide, argues Roxburgh.
“Cost cutting is one consideration for
firms, but there is more to it than that. An
outsourcer brings more skills to the party,
and offers organisational flexibility, espe-
cially for large corporations that have
grown through acquisition. Here, there is
sometimes a failure to harmonise procedures, suppliers, software and operational
management,” he says.
To attract business, outsourcers are
likely to ensure compliance with industry
standards, and this can help companies to
achieve the necessary quality of service
required for specific business processes,
says Roxburgh. “Consistent methodology
is one thing organisations look for, which
helps to provide adherence to various quality and security standards. Outsourcers
and offshorers are good at adhering to
those procedures,” he adds.
Roxburgh also argues that suppliers of
outsourced services are often more attuned
to the needs of end-users. “Lots of IT departments gain reputations for going down
paths that they want to go down rather than
those that the users want to go down. Outsourcers are flexible enough to listen to what
the end-user wants, and help them wrest
back control from the IT department.”
Call centre staff, along with helpdesk
support and software development, have
been the three prime targets for outsourcing, as companies try to save money by
withhold similar information.
So what else lies ahead for the
coming year in government technology? No doubt we’ll hear more
of the plans for a national ID card
scheme, due for rollout by 2008
and requiring a database containing the detailed, personal information of all cardholders.
Hopefully the technology partners eventually awarded contracts
for the ID project will benefit from
the openness promised by the FOI
Act and the resulting systems will
therefore run smoothly. A failure
in the vast ID card system could
have more serious consequences
than any of the problems so far
seen in government IT. ITW
[email protected]
ABOUT NIGEL ROXBURGH
Roxburgh is a founding direc• Nigel
tor of the National Outsourcing
•
•
Association (NOA) and is currently
a principal consultant with IT services company Xansa.
He has specialised in services since
1984, but has also held R&D, marketing and business strategy roles.
Roxburgh’s previous employers
include Philips, the Economist
Intelligence Unit, BT and Dixons.
employing staff in locations where low
rents and wages are combined with a large
and readily available pool of skilled staff.
Yet Roxburgh maintains that there are
strong commercial arguments for keeping
certain roles in-house, and organisations
should think very carefully about the jobs
they do trust to outsourcers, as well as the
motives of the outsourcers themselves.
“There are downsides to going externally. What a company should never outsource are the three S’s – standards, security and strategy,” says Roxburgh. “If you
are going to have a vision of how the
organisation is going to capitalise on IT,
do not automatically go to an outsourcer,
because he or she might just [present]
ideas that spin them money and not bring
any benefit to your organisation.” ITW
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