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Outsourcing and automation key to overcoming the IT skills shortage

Data specialists

As mentioned in my previous post, the tight labour market and IT skills shortage in New Zealand is a key challenge facing most organisations. With the unemployment rate at a record low, there is a shortage of skilled IT workers. This is making it difficult for organisations to recruit and retain the IT talent they need to operate effectively and deliver on their strategic goals.

The impact of the tight labour market and IT skills shortage is being felt by organisations of all sizes, but it is particularly challenging for medium to large corporates, government organisations, and enterprises. These organisations typically have complex IT environments and require a wide range of IT skills.

The impacts that organisations are experiencing are being experienced in a number of ways:

  • Operational delivery challenges: The tight labour market and IT skills shortage can make it difficult for organisations to deliver on their operational commitments. For example, it may be difficult to find the IT staff to develop and implement new systems, or to maintain and support existing systems. This is leading to delays and disruptions to operations.
  • Increased costs: Organisations are needing to pay higher salaries to attract and retain IT talent. They may also need to outsource some IT tasks or hire contractors, which can be more expensive than hiring full-time staff.
  • Employee engagement and retention challenges: IT staff may feel overworked and underappreciated. They may also be concerned about their job security, as they know that there is a high demand for their skills. This can lead to increased turnover rates, which can further exacerbate the IT skills shortage.

Working with a number of our clients, we have witnessed first hand the positive impact of outsourcing and automation technology and solutions on the operations, delivery and recruitment and retention of IT workers.

In light of the pressure from the current economic and market conditions, it is surprising that more organisations aren’t exploring the benefit of outsourcing and automation. In a recent interview with CIO, Professor Ilan Oshri from the Centre of Digital Enterprise at the University of Auckland Business School, expressed surprise that only 30% of organisations are engaging in outsourcing.

According to the 26th Annual PwC CEO Survey there is a much higher level of investment in automation. The survey indicates that as many 84% of organisations are investing in the automation of various tasks including:

  • System administration – server provisioning and configuration, network monitoring and security, and software patching and updates.
  • Application development and maintenance – code testing, deployment, utilisation management and monitoring.
  • Customer support – customer inquiries, order processing, and shipping.

There is an interesting contradiction in these numbers. In many instances the ongoing management, monitoring and maintenance of automation technology is often best outsourced to avoid adding back tasks and diluting any of the cost reduction, efficiency or productivity gains. There is also the argument of leaving it to the experts so your team can focus on the more valuable and rewarding activities.

As you’ve probably guessed, we believe automation is a fundamental enabler of business effectiveness and therefore key to thriving in the current economic landscape. Through automation you can achieve faster processes, improved accuracy and reduce costs. But perhaps more importantly, you can remove the need to employee additional staff and free up the ones you have to add greater value and improve retention.

In my next post I’ve looked at some of the fundamentals required for an organisation to succeed in leveraging automation. As always, if you have any questions or would like to explore any of the points raised in this post please don’t hesitate to get in touch.

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