Will low-cost offshore competition and packaged apps make the in-house programmer obsolete?
By Chris Murphy, Eric Chabrow, InformationWeek
17 November 2003
Coding software has been a good living for a half million or more–sometimes far more–Americans during the last decade. Now it’s the IT job category that bears the highest unemployment rate, at 7.1% this year. Low-cost global competition and changing technologies have dimmed the career prospects of many programmers in this country and cast the role’s future into doubt. To programmers like Kevin Mueller and Garrison Hoffman, these grand economic changes are as personal as a paycheck.
Hoffman had it made. In the late ’90s, he pulled in $80,000 a year programming at a consulting firm that developed systems for pharmaceutical companies. But the paycheck didn’t begin to explain the allure of writing code. “It’s like working on puzzles for eight, 10 hours a day,” Hoffman says. “You’re constantly learning, finding new challenges, new riddles. And I got paid for that.”
Not anymore. Hoffman hasn’t had steady IT work in two years. He gets by with temporary jobs as a systems administrator and photographer and recently moved from fashionable Park Slope in Brooklyn, N.Y., to nearby Bay Ridge, the more solidly middle-class neighborhood featured in the John Travolta film “Saturday Night Fever.”
Kevin Mueller has it made. His employer, the fast-growing stock exchange Archipelago, lives on business technology. The speed and reliability of Archipelago’s electronic-trading platform are the reason traders use it. Mueller works side by side with business-unit managers who know the value of good code. But would he advise a smart 18-year-old to study computer programming? After a long pause: “For the majority of folks, I’d tell them not to do it,” he says.
Even Mueller’s best-case scenario of the future is a world with fewer programming jobs. Smart companies will take Archipelago’s “software craftsman” approach, he says. Small teams of talented programmers who understand the company work closely with business managers to craft code that solves problems. But Mueller knows many businesses will go the other route, throwing huge programmer teams with layers of project managers at problems. Those are the commodity programming jobs most likely to be shipped offshore. “It’s going to be a shrinking field,” Mueller says.
That appears to be what’s happening. U.S. workers are exiting the field: From 2000 to 2002, the number of IT pros calling themselves computer programmers dropped more than 12% as 87,000 people walked away from the career. It’s no wonder–the number employed dropped 16%. In 2003, there are 3% fewer people employed as programmers than in 1994. Unemployment among programmers averaged 1.6% two years ago, a far cry from 7.1% in the first nine months of this year, the highest of the eight IT job categories tracked by the Bureau of Labor Statistics. That unemployment comparison isn’t perfect, since the bureau began using new job definitions in 2003, but for both categories the government used monthly surveys counting coders employed by user companies, IT vendors, outsourcers, integrators, and consultancies, plus the self-employed.
Even as their numbers shrink, 16% of IT employees–one out of every six–still make their living as programmers. The future course of this job will tell a lot about how business computing in general evolves.
The inescapable fact is that most companies simply don’t need as many programmers as in the past. And when they do, they have many lower-cost options around the world. Companies that develop and sell software still need armies of U.S. programmers, but Hewlett-Packard, IBM, Microsoft, and other big companies are increasingly building large development staffs in places from India to Ireland. Yet change is most striking for the in-house programmer who helps make a company run.
Not long ago programmers were the essence of IT. They were critical knowledge workers before the term gained popularity, and programming was the starter job of many business-technology leaders. Contrast that with today: Companies treat programming as a capability that’s best bought on an as-needed basis. In some circles, that’s given the profession a bad rap. “Many IT professionals wouldn’t call themselves programmer,” says senior VP and CIO David Guzmán at the medical-supplies distributor Owens & Minor Inc. “It’s an anachronistic term with a pejorative context to modern IT professionals.” To understand the programmer’s rise and fall, look at Blue Cross and Blue Shield of Minnesota. When mainframes reigned, programmers coded the rules that helped run the health-insurance provider, like the Cobol code that translated how members became eligible for benefits. Even simple information requests required their involvement. They worked closely with business-unit managers and had intimate knowledge of business processes. “Whoever wrote the code was king or queen,” says John Ounjian, CIO and senior VP for IS and claims operations. “Programmers ruled the world.”
There was a spike in programmer demand in the late 1990s and 2000 as IT spending soared and companies hired programmers for year 2000 remediation. Soon after, with Y2K fixes completed and the dot-com bust under way, programmer ranks diminished. A decade ago, about half of Blue Cross and Blue Shield of Minnesota’s IT staff were programmers; today, just over a third are.
If knowledge is power, corporate programmers lost much of theirs with the shift to object-oriented programming and packaged applications. In more distributed environments, languages such as Java let designers isolate elements of a business process for a programmer to work on, so that person doesn’t necessarily need the same broad business acumen as legacy coders.
Packaged apps also changed the way IT people were linked to the business processes that key systems ran. With enterprise-resource-planning software, businesses could deploy companywide systems without having to build them by hand. “The shift has been from learning the business via programming to understanding the business via business-process execution and package-software capabilities,” PolyOne Corp. CIO Kenneth Smith writes in an E-mail. “Coding was an ends to a means, which is no longer necessary.”
Packaged apps mean business analysts now hold much of the business-process knowledge in IT. PolyOne employs relatively few programmers these days, and Smith describes programming as, at best, a “secondary or complementary” skill at the $2.5 billion-a-year plastics manufacturer. It’s a skill that “can either be taught or can be secured as a commodity,” Smith says. “Good analysts solve business problems that save money, increase productivity, and provide a competitive advantage to the company.”
Unemployment statistics illustrate the trend. While 7.1% of programmers were out of work during the first nine months of this year, system analysts and computer scientists, a fifth of all IT employees, had the lowest unemployment rate at 5.1%.
There are still opportunities for U.S. programmers, but only for those who are well-trained and very productive–more engineer than artist, says Steven Rubinow, Archipelago’s chief technology officer. In the past, it was possible to drift into programming without extensive training, since it was an emerging field. Many times, Rubinow remembers asking a job applicant about a technology listed on a resume, and the person would have never used it in business but had merely studied it at home. It’s these self-taught self-starters some consider most at-risk. “The lower echelons of the skill levels are going to be washed away,” Rubinow says.
The booming offshore option makes productivity critical. Like Archipelago’s Mueller, Rubinow believes small teams of well-trained developers can be most productive, because they know the business and business-unit colleagues very well. That lets them do a project much faster because they don’t do minutely detailed specs and instead solve problems with a chair spin to talk to a business manager. But he knows it’s only with those productivity gains that companies can justify higher-cost U.S. programmers. “You have to re-examine the development model,” he says. “Instead of looking for this source of cheap labor, they could better train people they hire.”
It’s James Morris’ job to help train the next generation of computer scientists, and he isn’t training people to be pure programmers. But the dean of Carnegie Mellon University’s school of computer science says the end of the Internet boom did force people to think about more-disciplined training. “It was exciting in the ’90s, but we couldn’t get anyone to pay attention to becoming a good engineer,” Morris says. “Everything looked so easy.” Offshore outsourcing emphasizes how risky it is to be purely a computer specialist, Morris says. Carnegie Mellon teaches the foundation of programming and how to learn new languages. Yet Morris compares computer science for science-focused kids to an English major for liberal-arts minded students; it’s a foundation to pursue any career, from science or medicine to business or public policy. “We’ll teach you enough to get a summer job in programming, but our deeper purpose is to teach you everything you need to know about digital technology,” he says.
So how important will programming skills be for business-technology workers and executives of the future? Clearly, business knowledge–and in many cases industry-specific knowledge–has never been more vital.
Years before Y2K and the popularity of enterprise apps, management-consulting firm Booz Allen Hamilton’s IT group shifted its primary focus from coding to business analysis. All of Booz Allen’s business analysts were once programmers, but what separates them from by-the-hour labor is their company knowledge. “If we need coders, we can use contractors,” says George Tillman, Booz Allen’s CIO. “But what we cannot buy is the company knowledge within the business analyst.”
Al Biland, CIO at Snap-on Inc., says programming remains a viable route to an executive IT role, but it will compete with other job experience, such as business-unit manager. Tillman predicts it will be more likely for a CIO to come from the business-unit ranks. “As technology changes–the hardware as well as how it’s delivered to the user–the need for a technical background diminishes,” says Tillman, who started his career as a programmer. PolyOne’s Smith, too, sees business analysts as potential CIOs because of their deep understanding of business, strong appreciation for technology, and ability to lead projects and teams. But Archipelago’s Mueller says programmers are so often tied to their keyboards, few have opportunities to make the customer or even internal contacts needed to have a far-reaching impact on their companies or move into the executive ranks.
It’s tough to imagine a programmer having a greater impact–or a more successful career–than Charles Simonyi. He joined Microsoft in 1981 when it had 40 employees and led the programmers who created Word and Excel, earning him the fortune that lets him fund a software startup he now runs. Simonyi doesn’t offer much hope for maintaining today’s U.S. programmer numbers. Where he sees hope is beyond outsourcing, in what could truly reshape programming: mechanization.
“To me, the outsourcing trend indicates that an ever-larger part of IT work has become routine, repetitive, and low-bandwidth; one might even say unexciting or boring,” Simonyi says in an E-mail. Ultra-educated Indian programmers are underutilized, just as programmers have been in this country, he says. He has a stake in this vision, since his company, Intentional Software Corp., develops tools to make it easier to capture the design of software in the actual code. Yet he predicts a long and painful journey. In the near term, the 20% or more least-productive U.S. programmers could lose their jobs to overseas employees. But those jobs will eventually be mechanized, by utilizing the programming skills of senior U.S. people, Simonyi predicts.
If routine IT programming can be mechanized, Simonyi says, it will bring Moore’s Law to software–a steady increase in capacity along with a steady decrease in cost. The basics of software engineering will remain important to creating software, but the focus will be automating functions. Languages and compilers will have the limited, narrow role that order codes and assemblers have today, he says. And obsolescence will be a constant threat. “A programmer’s 3-year-old experience will be like a 3-year-old laptop is today: a quarter of capacity, a quarter of speed, and ready for replacement,” he says.
It’s hardly a comforting vision. But high-tech has never been about comfort, especially when it comes to change. “Moore’s Law isn’t predicated on keeping the key parameters and key technologies constant,” Simonyi says. “We on the software side should take a hint from this.”
Free Advice: Would You Tell A Kid To Study Programming?
By Chris Murphy, Eric Chabrow, InformationWeek
17 November 2003
Zinovy Shkolnikov gets lots of free advice about whether to pursue a career in computer science. The 17-year-old senior at suburban Chicago’s Maine East High School sells electronics part-time at Sears, where his co-workers include a software engineer who was recently laid off. His colleague’s advice: Don’t do it, because the future of software engineering isn’t in America, it’s in lower-cost countries.
Shkolnikov isn’t deterred. He thinks there will continue to be a place for well-trained American programmers, so he’s hoping to study computer science at the University of Illinois’ engineering department. “But it does give me some cold feet, and make me think maybe I should do this engineering or that engineering instead,” says Shkolnikov, who was born in Ukraine and has lived 15 years in the United States.
It’s a great conversation starter for your next IT cocktail party: Would you advise an American teenager to study computer programming? Here’s what several top IT execs see as a career path for someone interested in programming:
Robert Reeder, CIO, Alaska Air Group Inc.: It depends where they start. Besides computer-science graduates, we have terrific developers who changed careers and started in gateway jobs like the help desk or quality control or completed vocational training. Some IT shops are snobby about credentials, but we have had wonderful success with employees moving into programming from other areas of the company.
Al Biland, CIO at Snap-on Tools Inc.: The traditional computer-science and MIS programs at most universities still provide a good grounding in the basics. However, seek out universities with commitments to partnering with industry to get real-world experience as soon as possible.
Steven Rubinow, chief technology officer at Archipelago: Do it if you think you can be really good at it. Get a top-shelf education. There’s good opportunity, but only for the very productive, well-trained engineers.
George Tillman, CIO at Booz Allen Hamilton: Programming is like sailing, it’s even useful for powerboat sailors. Being a programmer isn’t a bad place to start a career, but few in the future will find it a career destination. That role now shifts to business analysts and project managers. Still, Tillman says, if programming is something you really want to do, work for a vendor.