Expert articles
Development managers urgently wanted
Outsourcing software development tasks to offshore locations is not a zero-sum game in terms of numbers of jobs. It is not the case that the jobs created in India, Eastern Europe or elsewhere cause the loss of precisely those same jobs in this country as a result. In fact, specialised service providers in particular are creating a large number of new jobs in Germany too.
According to a study conducted by the American consultancy firm Booz Allen Hamilton, 80 per cent of companies that go in for offshoring quote reducing costs as a crucial motivating factor. Over the past three years, though, the shortage of experts has increasingly emerged as a significant reason underpinning the decision: while in 2004, according to this survey, fewer than 40 per cent of those questioned were looking to gain access to qualified personnel through offshoring, last year this figure had risen to almost 70 per cent.
Great demand for specialists
This demand for expert know-how instead of an exclusive focus on cheap manpower is creating a lucrative market segment for specialised service providers at home—and hence also local jobs—say analysts from Pierre Audoin Consultants in Munich. In her study entitled “Software Testing in Germany, Austria and Switzerland” from March 2007, PAC analyst Melanie Mack established that: “As a result of the increasing industrialisation of IT production, demand is rising for specialised experts in quality assurance. The primary task of the service providers active in this market is to make it entirely clear to the users what benefits independent experts offer in comparison with system integrators.” She went on to say that the offshoring component has to play a significant part in the service portfolio on offer, because the times of constantly rising budgets for software development and testing are gone. The resultant growing price pressure could be countered by providers offering flexible onsite offshoring models, according to the PAC study.
The fact that the sums do add up with the onsite-offshoring mix is proved by the success story that has been written by SQS Software Quality Systems AG in the past two years. Both sales and the number of employees have almost doubled in this period. The highest rates of growth were registered at the South African offshoring location. At the end of the year around 100 test experts were earning their living there, while at the beginning of the year the branch started with about 40 staff. The company’s European branches, though, too, grew faster than the average attained by the IT service market as a whole.
Not everything can be outsourced
Developers and testers in this part of the world therefore have new career options ahead of them if they adjust their everyday working patterns to collaborating with colleagues who may well be sitting thousands of kilometres away. This internationalisation of the ranges of tasks remaining in Germany certainly opens up long-term prospects for workers in this part of the world. This is because if a client hopes to reach the targets set in the context of outsourcing in terms of time, cost and quality, he will always have to build up a strong onsite team as well. The experience gathered in the projects supported by SQS in South Africa shows that, on average, onsite and offshoring resources are shared in a ratio of about 50:50—a figure that will not be achieved until two years after the start of the first project at the earliest. Only few development projects reach an offshoring share of 70 per cent.
If this distribution of tasks between remote and local is to succeed, the companies and employees have to set about initiating changes in Germany that turn purely operative developers and testers into managers and process specialists.
When it comes to the offshoring of IT tasks, too, there are still important tasks left for the client or for local specialised service providers on the ground. In fact, new posts are created, changing the job profiles of the experts working in this country.
It is inevitable that offshoring projects are accompanied by obstacles in terms of culture, language and know-how. One of the main methods that companies use to overcome these is standardisation—whether simply by bringing the respective employees’ proficiency in English into line or by harmonising the technical backgrounds of all those involved. This includes, for example, standardising the most commonly used technical terms.
Success of offshoring depends on standards
The easiest way of achieving this harmonisation is if employees and their personnel managers are able to make use of de facto standards in training that are recognised across international borders. One example is the tester training performed in accordance with the standards of the ISTQB® (International Software Testing Qualification Board). This training and further education scheme is in widespread use around the world, with around 60,000 people already having gained qualifications, a tenth of them in Germany. All of these test specialists how have the same technical vocabulary and procedural know-how in their armoury—no matter whether they are testing and improving the quality of systems in Germany or India.
In parallel with the expansion and standardisation of operational skills along these lines, many experts in this country have to make the move from doers to managers if they want to secure their career chances in the long term. This is because in projects distributed between different countries the actual programming and testing is becoming less and less important, at German and other Western European locations at least. Instead, tasks such as project management, requirements management, change management and job preparation are taking precedence. In particular this includes organising the available workforce and monitoring the results, progress and use of resources at any one time. Working with control desks is more and more becoming the central focus of everyday work.
This also includes the ability to cope with aberrations and abnormalities: what needs to be done when errors accumulate and the project is threatening to go off the rails? What tools can be used in such instances to help set priorities and assess risks?
Intermediaries between business and IT
IT employees are rarely able to answer such questions on their own. They are much more likely to be reliant on input from their technical departments or from management. Consequently, the new job profiles surrounding offshoring projects usually have a strong moderator component. In turn, this calls for intensive training in social and communicative skills and demands that the business experts and technical specialists have greater in-depth understanding of their own companies.
This need for corporate know-how opens up the opportunity for many former experts in specific branches of industry to switch to the IT side and develop new career paths there at the interface between business and technology. In this way, offshore outsourcing in IT is accelerating the general process of structural change in the German labour market—provided that companies and employees invest in the necessary training measures.
René Gawron has been chief financial officer (CFO) at SQS AG since 2001, responsible mainly for administration, accounting, finance, mergers & acquisitions, investor relations and personnel.
