Offshoring myths perpetuating IT skills shortage: Westpac CIO

Organisations are being forced to offshore IT work as a result of the skills shortage, but the misconception about the lack of opportunities in Australia is perpetuating the IT skills shortage, according to Westpac CIO Clive Whincup. He was speaking at the Australian Computer Society Young IT conference in Sydney.

Having launched a AU$2 billion IT transformation initiative in 2010, the bank has around 3000 staff working in technology-related roles, and another 3000 outsourced IT workers. Whincup said IT professionals, particularly in the financial services sector, are in high demand, and extolled opportunities in a career in IT.

But many companies, including Westpac, do offshore IT roles to countries such as India, where labour costs are cheaper, and Whincup acknowledged that this may discourage people from exploring a technology-related profession. He claimed the view that companies offshore IT jobs due to cost is a fallacy, as salary gaps between countries like India and Australia are closing at a rapid rate.

"The reason Westpac and most other organisations need to go offshore is because of the lack of availability of skills — there simply aren't enough people locally," Whincup said.

This means that organisations, not just in Australia, but across the developed world, have to respond by changing the way their workforce operates, even if it means engaging in a "global supply chain" of IT professionals, he said, akin to the car manufacturing industry sourcing some parts locally and some from overseas.

"Jobs are not going offshore, activities are going offshore," Whincup said.

But this has created a vicious cycle of people refusing to join the IT workforce, because of the perception that many of those jobs are being shipped elsewhere, according to Whincup.

"The paradox is, because we are doing it, because the media and some elements of society are fixated with the fact this is happening for cost reasons, it's actually becoming a self-fulfilling prophecy," he said. "People are forming the view there are no IT jobs in Australia, and will therefore, not put their children in technology-related degree courses."

"That is the logic we have to cut off."

But in the meantime, as organisations continue to undergo large IT projects, they will have to get used to tapping into international markets to run those projects, the Westpac CIO said.

According to Whincup, it takes several hundred staff to execute a AU$200 million IT project.

"[Offshoring] is part of our industry, and we need to embrace it, understand it, and work with it as such," he said. "But we can't allow it to become a reason for people to not come into the IT profession."