IT Talent Shortage Threatens Year 2000 Compliance and System Conversion Timetables

Strategic Insights -

According to sources, including Microsoft CEO Bill Gates, a severe shortage of competent IT specialists is reaching an all-time high, threatening year 2000 compliance and system conversion timetables. The shortage not only affects software and hardware developers but also banks, which are struggling to find qualified IT staff to support their technology initiatives. As a result, many banks are turning to outside consultants and vendors to help mitigate the shortage.

Key Takeaways:

  • The IT talent shortage is a critical issue that affects not only software and hardware developers but also banks, which are struggling to find qualified IT staff to support their technology initiatives.
  • Microsoft CEO Bill Gates has warned that the IT talent shortage could impact the company's research and development initiatives, citing a need for $3 billion in R&D spending next year, but a shortage of qualified developers and managers.
  • Small banks, like Glenview State Bank, are finding it challenging to recruit and retain IT specialists, particularly without offering six-figure salaries or stock options.
  • The real problem behind the IT talent shortage is a structural issue in the way IT processes are conceived, developed, and maintained, according to Frank Schlier, vice president and director of research for the Gartner Group.
  • A combination of technologies, rather than a single silver bullet, is necessary to address the IT talent shortage, Schlier advises.
  • Banks are becoming increasingly complex in their use of technology while downsizing continues to shrink IT resources, making it difficult to develop systems driving growth, according to Kathleen McClave, president and CEO of Furash & Co.
  • Many banks are allocating their IT resources carefully, relying on outside consultants and vendors to subsidize IT shortages, McClave says.
  • Glenview State Bank is dedicating its in-house staff to support critical priorities, working extensively with third-party partners to fulfill software application and system support needs while maintaining control of its operations.
  • Vendors like IBM and NCR are growing their business through sales and support services, including system design, implementation, and support.

Statistics:

  • Microsoft plans to spend $3 billion on R&D next year.
  • The IT talent shortage is affecting the development of software and hardware, as well as banks' technology initiatives.
  • Glenview State Bank has a $600 million asset base.
  • The bank receives only three or four responses for a new network position, down from several hundred in the past.
  • A software and hardware developer like Microsoft would need higher resources if not for the IT talent shortage.
  • IBM attributed 30 percent of its revenue to professional services in 1996, while NCR's professional services amounted to 47 percent of its revenue base.
  • Microsoft has donated $10.8 million in software and technical assistance to Washington state's 32 community and technical colleges.

Sources:

  • Microsoft CEO Bill Gates
  • Frank Schlier, vice president and director of research for the Gartner Group
  • Kathleen McClave, president and CEO of Furash & Co.
  • Mary Knox, research manager at Mentis Corp.
  • Ron Gafron, chief technology officer at Glenview State Bank
  • Shaw Systems Inc.