Apps & Software

Who'll Keep Your 50-Year-Old Software Running?


Mainframe computer circa 1960s

Photograph by SSPL/Getty Images

Mainframe computer circa 1960s

It’s hard to believe that most of the technology we take for granted is just a generation or so old. Most of us carry more computing power in our pockets or handbags than a state-of-the-art office or factory possessed during the Reagan era, when the Microsoft (MSFT) operating system (MS-DOS) was first coming into use.

With generational change, however, comes a generational challenge: The baby boomers that brought us the computer revolution, developing the products and programs we now rely on, are retiring.

But many companies are still using programs written in such software languages as Cobol and Fortran that were considered “cutting edge” 50 years ago. Indeed, the trade publication Computerworld has reported that more than half of the companies they surveyed are still developing new Cobol programs.

The trouble is, an estimated one-third to one-half of all Cobol and Fortran programmers are at least 50 years old, and today’s generation of software developers is using newer programming languages, creating a skills gap for many businesses.

Smart companies have recruitment and succession plans, of course. What they don’t have is access to an adequate supply of workers with the technical expertise they need.

That’s a problem. Computer technology plays a critical role in virtually every company and industry and virtually every activity, from payroll, production, and supply-chain management to product design and development. Add to this the multiplying volume of code, the mounting technical requirements, the growing demand for technologies tailored to specific applications, and the increasingly complex ways in which code is used, and you realize how critically important software talent has become.

Software talent is also hard to come by. In 2012, for example, the Bureau of Labor Statistics (BLS) reported that demand for software engineers in the U.S. outpaced supply by 35,000 positions. The gap between the supply of and demand for software talent is only going to get wider. “Demand is expected to grow at more than 20 percent per year through 2022—a six-fold increase,” according to a new Boston Consulting Group report titled “Code Wars”.

Fast-rising demand is just one problem. From a management standpoint, the issue is more complex, because software, like most everything else, has become a world of specialization, with the largest shortfalls looming in the areas of computer security, enterprise applications, systems networking, and storage.

The security field presents an especially daunting challenge, as eBay (EBAY), Target (TGT), and others have learned this past year, with some 200,000 software security positions currently unfilled in the U.S.

Meeting America’s needs for software talent will require a large-scale effort, involving both the boardroom and the classroom. In the near term, the report suggests, companies’ best bet is to make the most of existing talent through training, retraining, and providing attractive career paths for software talent.

Longer term, options include the use of third-party talent; collaborating with local universities, where possible, to create a talent pipeline; and building “in-house software organizations” in established tech centers. Wal-Mart Stores (WMT), for instance, has opened two e-commerce offices in Silicon Valley. A number of major manufacturers also are setting up shop there.

A big part of the challenge will be to show coming generations that working with computer technology is cool. As John Diaz reported recently in the San Francisco Chronicle, that’s something they’re starting to take seriously in Silicon Valley. Companies everywhere need to do likewise. Their success could depend on it.

Hal_sirkin
Harold L. Sirkin is a Chicago-based senior partner of The Boston Consulting Group (BCG), a professor at Northwestern University’s Kellogg School of Management, and co-author, most recently, of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback (Knowledge@Wharton, November 2012).

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