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Archive for May, 2016

CIOs, Facing IT Skills Gap, Eye the Gig Economy for Talent

Now the Chief Information Officer has to take notice of the Gig economy in order to fill in skills…

CIOs are facing staffing challenges that include retiring Baby Boomers and a widening “skills gap” in key areas such as cloud infrastructure

Ever use Uber Technologies Inc.? If you have, you’ve experienced a disruptive business model, masquerading as a ride-sharing service, that is poised to radically redefine the very nature of work across many industries, across many job disciplines, including IT, for many years to come.

This new approach to employment even comes with a popular moniker: “the gig economy.” It’s a benign term that conjures images of IT workers hopping from one contingent project to another, deciding when and where to work, and more focused on achieving work/life balance than receiving a regular paycheck from one employer.

The gig economy is anything but benign. On closer inspection, there is far more going on. Confronted by staffing challenges that include retiring Baby Boomers, difficult to hire and retain Millennials, and a widening “skills gap” in key areas like cybersecurity, cloud infrastructure, Big Data and mobile application development, chief information officers need to take notice. To get work done, now and in the future, IT leaders must embrace the dynamics of the gig economy.

Many already are. The CIO Executive Council forecasts 46% of chief information officers will employ “contingent workers,” a more formal label for gig workers, in 2016. Deloitte Consulting forecasts corporations will “increase” or “significantly increase” their use of contingent workers over the next three to five years.

Kevin Brady, an IT consultant in South Florida, explains the popularity of this new way to work. “Many chief information officers have specific jobs that require specific skills for specific periods of engagement,” he says. “A highly skilled gig worker is often the best, and least costly, solution.”

Darrin Clawson, CEO of Engage Mobile Solutions, a Kansas City tech firm, disagrees with Mr. Brady’s point about lower costs. “Many IT executives mistakenly think cost savings is the primary driver of using contingent workers. But project preparation, detailed scope, design and documentation costs associated with contingent workers largely offset any potential savings. Hiring contingent workers is much more about having access to the best talent than trying to save a few bucks.”

Chief information officers will find it difficult to ignore the gig economy. It is just too big. The U.S. Government Accounting Office says 58 million men and women comprise the gig economy. That’s 40 % of all workers in America. The Internal Revenue Service reports 91 million “gigs” were completed in 2014.

Workmarket, an on-demand employment software firm, says gig workers are mostly “mid-career” professionals, age 35-55, who complete job assignments that average 32 weeks. Edelman Berland, a global public relations firm, identifies several types of gig workers:  independent contractors who focus on one job at a time (36%), diversified workers who balance multiple assignments (26%), moonlighters (25%) and temporary workers who work for employment firms (9%).

A report from Fieldglass, a contingent labor subsidiary of SAP SE, advises chief information officers to tap the brakes before rushing into a contingent workforce model. The report cites concerns such as a lack of visibility and intelligence into the ultimate ramifications of this new approach to work, the difficulty of fully assessing and verifying a contingent worker’s skill set and the overwhelming volumes of federal and state labor guidelines that come with employing gig workers.

Another key hurdle chief information officers must overcome when engaging with contingent workers is intellectual property protection. This poses a dilemma explains Joe Lampien, director of Kelly Services Engineering Center of Excellence. “On one hand, chief information officers have a fiduciary responsibility to protect confidential product and process information which you don’t want walking out the door with the contingent worker,” he says. “On the other hand, contingent workers with the right skills and talent experience can greatly contribute to the creation of intellectual property.”

To solve this risk-reward problem, chief information officers often require gig workers take company-sponsored training courses on IP property ownership and confidentiality before beginning work at the firm. Many also mandate contingent workers sign a “work made for hire” contract that ensures the company, not the contingent worker, owns the IP of the work being performed and that the firm is notarized as the author and automatic copyright owner of the work.

Though chief information officers must embrace the gig economy, they must also compete with it. Ninety percent of individuals who complete at least one gig never go back to working full time. This means chief information officers must identify key employees and sell them on the benefits of continuing to work full-time at their firm. A recent report from McKinsey recommends corporations invest more resources in corporate training and development as a necessary step.

Robert Reich, the former United States Secretary of Labor, says “the gig economy is the biggest change in the American workforce in over a century.” If Dr. Reich looked further back in labor history he would have made an even bolder statement.  The gig economy is the biggest change in how the world works since Adam Smith, in his 1776 bookThe Wealth of Nations, ushered in the industrial age with his division of labor economic theory.

The gig economy is that important. It is the “uberization” of work. Chief information officers would be wise to take it for a test drive soon.

By Gary Beach – Wall Street Journal

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IT firms like Infosys, Wipro rely on external subcontractors more than ever before 


Even india is getting in on the sub contractor act…

Amid rising onsite wages, high visa rejection rates and a politically-charged environment in the US, where a debate on outsourcing is waging, India’s IT firms including Infosys, Wipro and TCS are relying on external subcontractors more than ever before.

For the financial year ended March 2016, Infosys, Wipro and TCS spent more on parcelling off more customer projects to smaller vendors, according to their financial reports. According to top executives of these companies, most of the subcontracting work took place onsite in the US, resulting in higher expenses.

In the year ended March 2016, TCS spent Rs 7,823 crore on external consultants’ fees, compared with Rs 6,116 crore in the year-ago period. The subcontracting expenses as a percentage of revenue climbed up to 7.2% from 6.46% last year.

By Anirban Sen – The Economic Times

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An Operating Model for Company-wide Agile Development

Change to software development and how you think and staff for it is here. The key to scaling agile software and product development…..

Organizations are succeeding with agile software and product development in discrete projects and teams. To do so in multiple business units and product groups, they must rethink foundational processes, structures, and relationships.

Many digital companies are using agile development practices to deliver goods and services to customers more efficiently and with greater reliability. Using this software-development approach across all business units and product groups, digital giants have been able to design and build features quickly, test them with customers, and refine and refresh them in rapid iterations.

By contrast, few traditional companies—those with both online and offline presences—are using agile methodologies across the majority of their product- and application-development teams. Many banks, for instance, have established digital units to develop and release mobile apps or website features quickly. But those groups typically remain physically and strategically disconnected from the rest of the IT organization and the rest of the company.

Research indicates that many traditional companies are experimenting with agile practices in discrete pilot projects and realizing modest benefits from them. But fewer than 20 percent consider themselves “mature adopters,” with widespread acceptance and use of agile across business units. Meanwhile, according to our own observations, the companies that are deploying agile at scale have accelerated their innovation by up to 80 percent.

There are many reasons traditional companies have not been able to successfully scale up their agile programs, but we believe a chief impediment is their existing operating models and organizational structures. In most of these companies, the process of software or product development remains fragmented and complex: a business request for a new website feature can kick-start a development process involving multiple teams, each tackling a series of tasks that feed into the original request. For instance, one team working on the front-end application, another updating associated servers and databases, and still another reconciling the front-end application with legacy back-end systems. What’s more, the supporting business processes (among them, budgeting, planning, and outsourcing) and existing roles and responsibilities in both the IT organization and business units continue to adhere closely to the legacy waterfall approach.

Read full McKinsey article here

By Santiago Comella-Dorda, Swati Lohiya, and Gerard Speksnijder –  – McKinsey & Co

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