The other week I went back to uni to give an introductory presentation on Agile Software Development in an IT related course. From experience I knew that it was quite difficult to attract an audience of students to listen to a presentation from a guest presenter, especially since most of the content in the presentation would not be assesssable. So I informed the course coordinator that I would be bringing the recruiter from ThoughtWorks along so students can find out more about the job opportunities available. This worked out quite well given it was Careers Week at the University of Sydney.

I used to be involved in this particular course about two years ago, and at that time there were 250 students in the course. I had assumed that there would be as many students in the course this time around, and had convinced the recuiter that it would be worth her time to come along and speak to students that have an interest in an IT related career.

To my surprise there were no more than thirty students sitting in the lecture theatre, and this was a good turn out, as there were only about forty students enrolled in the course. So over the space of two years, enrollments in this course have reduced by roughly 80%! Furthermore, first year enrolments have dropped to only forty students across all Electrical, Computer, Software, Power, and Telecommunications degrees. So it begs the question, why aren’t students interested in an IT career anymore? Is this a lag effect from the Tech Wreck of 2002? It is hard not to link a decrease in enrolments to a lagging fallout from the dotcom bubble.

Year 12 leavers have probably been cautioned by their parents and older siblings that got burnt during the Dot Com bubble that a career in IT is not a lucrative or safe career. They could not be further from the truth. There is so much work out there that most companies are trying very hard to ramp up their IT business units. Technology is so much more ubiquitous today than it was 5 years ago, and it will only increase over the coming years. Businesses will always need to rely on technology going forward as consumers have become accustomed to buying books and Segways online. Consumers and businesses today have a greater dependency on technology that there will always be a demand for people to staff IT related projects.

There is the concern that many IT projects in Australia are heading overseas to countries like India where labour is cheaper by comparison. The potential cost savings in offshoring an IT project is very tempting for many CIOs, and so many jobs are being lost to offshoring. However, there are a few switched on CIOs that are realising that offshoring IT projects is not the answer to delivering value to the business. The reason is that these projects are locked into the Waterfall model where all the specifications and design documents are drawn up in Australia, then shipped to India for development. Many of these projects fail when it comes to testing in the later stages, and projects run over time to address these defects, and costs blow out as a result. So the business doesn’t realise any value from these projects for up to two years, and the longer these projects get drawn out the greater the risk that the project becomes out of sync with the needs of the business. This would mean either scrapping the project or throwing more money at it to address changing requirements, both of these options are incredibly painful for any CIO to make.

As I mentioned before there are a few CIOs that are realising that offshoring is not the cost effective strategy that they first thought it would be. They are now looking into new ways of delivering IT projects, and are becoming very interested in Agile and Lean. Both methodologies allow the business to eliminate waste and reduce costs, and business value is realised earlier through shorter development cycles. Agile in particular works well when the development team works closely with the business, ideally in the same office, which means Agile projects are more successful when staffed by local developers. So over the next few years you’ll see a lot of work returning to Australia as businesses adopt a different approach to developing custom software solutions, as oppose to using a flawed methodology staffed by cheap offshore labour.

If I were a CIO working on a five year strategy I would definitely be looking at the state of the IT labour market, and the number of IT students coming through uni. I would be very concerned of a skills shortage in the coming years, especially when there are so few students that want to study IT courses at Universities.

Eventually the fundamental rules of economics will kick in when there is a high demand for local IT projects and a shortage of skilled professionals. This is good news for current IT professionals, as it would mean higher wages. Conversely this is bad for CIOs, as it would mean higher costs for the business to finance local projects, and a greater tendency to revert back to the offshore model of delivering software.

All this makes for an interesting conversation over a few schooners of beer, but the message needs to get out there: IT is back baby!