Using technology to bridge the IT skills gap

David Lees at Basis Technologies argues that technologies such as AI have the power to bridge the IT skills gap but won’t replace humans

Businesses’ must transform to adapt in increasingly competitive markets, battling against cost-of-living crises, geopolitical disruption, and supply chain shortages.

Despite the need to deliver effective transformation, one factor has impeded enterprises for many years; the IT and technology skills gap is only getting wider.

With so much change, businesses are scratching their heads, questioning how they’ll deliver their planned transformation without the skills and resources to enact change effectively. 

2024 brings the opportunity to start bridging the skills gap across numerous sectors. For increasingly crucial IT functions, businesses must start leveraging technology to mitigate a lack of skilled resources. First, they must acknowledge the reasons why progress has not yet been made.

The skills gap status quo

While 2023 data around skills gaps is by no means linear, the majority of research points toward a bleak reality. Research from Forbes found that 93% of UK businesses acknowledged an IT skills gap, while Microsoft studies revealed 69% of decision-makers feel their organisation suffers from a lack of digital skills, despite 59% of employees believing in the importance of development in this regard.

If the skills gap is widely understood to be limiting organisations and their employees have an appetite to upskill, why hasn’t the gap been bridged?

The UK’s skills gap concerns are indicative of the experience across Europe, looking at Germany as an example, McKinsey reports 700,000 vacant tech jobs, a number that is forecast to increase by a further 80,000 by 2026, despite the country’s clear objectives to reverse this trend.

It’s clear businesses have not yet found a solution to matching the rate of skills development with the speed of digitisation. Looking at the US, 85% of senior decision-makers stated a lack of cloud skills will impede the meeting of business goals in 2023. Within IT, Gartner reports 95% of new digital workloads to cloud-native platforms by 2025, further cementing the need to solve skills gap issues in the immediate future.

There are several reasons why the IT skills gap has progressively worsened, and several more reasons why it must be proactively considered and combatted in the immediate future. 

The first and perhaps most obvious is that technological innovation is skyrocketing; 42% of UK businesses cited fast-paced innovation as the primary restriction holding them back from bridging skills gaps. Others identify a deeper-rooted problem, with 37% stating IT skills gaps start at an educational level as correct training resources are not readily available.

There is also the sheer competitiveness of today’s job market to contend with, scarce talent and the increasingly difficult challenge of retaining and recruiting skilled individuals means 35% of businesses are struggling in this regard.

All of these factors are responsible for a widening skills gap that now looks like an uphill battle to try and close. 

A sector example: SAP’s S/4HANA migration

Myriad sectors are facing issues as a direct result of IT skills gaps, and enterprises embarking on their S/4HANA journeys – a re-platforming (in-memory) transformation to vital SAP systems that have helped businesses operate and make internal change for the best part of three decades - is an excellent example of transformation goals impacting skills shortages. 

SAP is a vital core system, integral to managing critical business processes across finance, manufacturing, inventory, sales, and used to change the data flows of an organisation. Previously an established system ticking away in the background, SAP customers are now in the throes of a transition period. In 2020, the company set a deadline of 2027 for migration to S/4HANA.

It’s been a steep challenge for all, with huge changes away from systems and processes that have powered businesses for over two decades, internal IT managers require new skills to handle the move. 

We’re now halfway toward that deadline and, bearing in mind S/4HANA is a considerable and time-extensive migration, the looming deadline is cause for concern. Enterprises lack the internal expertise to manage IT projects such as the vital SAP migration to S/4HANA, as of 2022, only 11% of SAP customers had fully migrated.

There are numerous reasons for this. The first is that SAP has been a part of IT for 30 years, so engineers who entered the space at that time are now close to retirement age. Combine this with a lack of incentives for young IT professionals to learn core system management skills and a cyclical problem emerges; too many professionals are leaving the industry and not enough are coming in. 

Similarly, the low supply and high demand for these skills means the cost of acquiring talent has skyrocketed. There’s also pressure from the 2027 deadline, meaning businesses can’t afford to spend excessive time looking for the right candidate.

On the other side, IT projects such as SAP’s migration are simply too important and too complex to add unnecessary risk by deploying IT workers who do not have the right skills to manage the project. 

SAP migration is just one example, but it accurately details the steep challenges of businesses facing IT skills gaps while seeking transformation. Ultimately, projects will stall, be poorly managed - Basis Technologies research found 59% of enterprises currently rely on “archaic” Excel spreadsheets for managing changes within SAP systems - or be cancelled altogether. Unless, of course, there is an alternative method.

The power of automation

New technologies, which businesses feel they must adopt and implement, are certainly contributing to the widening skills gap.

However, the same technologies can be used to cut some of these previously required skills. Automation can be utilised to mitigate immediate skills gap concerns, or at least buy businesses more time. 

By leveraging automation for codifying and automating workflows, routine approvals, and enforcing peer reviews, manual efforts and reliance on individualised expertise can be reduced.

All of these savings, made possible by automation, removes considerable burden from workforces encumbered by unnecessarily manual tasks. Automation still requires a level of human oversight and intervention, but once implemented it can absorb a significant portion of the ‘heavy lifting’ required by IT teams. 

In doing so, stretched IT teams can direct more resources to delivering projects that provide the most business value. Equally, for tasks that require specialist in-house expertise, automation can be used to mitigate the risks of unqualified employees aiming to handle tasks outside their purview.

These benefits are not lost on leaders at the enterprise level. According to 2023 Harvard Business Review research, more than 90% of workers recently surveyed said automation solutions increased their productivity, and 85% said these tools boosted collaboration across their teams. In addition, almost 90% stated they trust automation to perform tasks without error and help them make decisions faster.

Technology to help, talent to succeed

While automation is not a silver bullet for our skills gap, it does provide a life raft for businesses needing an immediate solution. Used correctly, automation can unlock significant resources for enterprises, meaning they stand a much better chance at delivering on urgent transformation projects, such as SAP’s S/4HANA deadline.

As an industry, we must learn that the technology at our disposal is only as good as the talented employees we have to harness it. Invest in the right skills first, use automation to take on the heavy lifting of unnecessarily manual tasks, then deploy the latest technology.

If done correctly, your business will be in a position to effectively deliver transformation projects that will have real impact on your organisation’s agility, efficiency, and ability to compete in today’s challenging landscape.

David Lees is CTO at Basis Technologies

Main image courtesy of iStockPhoto.com