IBM i Modernization

The Impending Retirement Crisis for Legacy Applications Running on Power i / IBM i

Dave Kravitt, CPIM

The retirement of a key internal IT resource can pose serious risks to a business’s operations, particularly if it is sudden or unplanned. The hiring market for specific technology skillsets is already challenging. And the labor pool is even smaller (and shrinking fast) for legacy applications. As retirement continues to diminish the availability of talent for legacy solutions, the potential disruptions caused by difficulty finding a replacement will only grow more acute.

In many cases, legacy applications such as ERP software can continue to drive strong business value, so long as they can be properly supported with the requisite expertise. Whenever possible, employee retirement should not be allowed to force the business to move on from an otherwise valuable tool. In this blog, we look at how a skilled third-party support and technical services provider can pave a reliable path through an otherwise turbulent market for technology-specific IT talent.

IBM i Provides a Vivid Illustration of the Challenging Dynamics of Retirements from A Shrinking Talent Pool

The market for IBM i experts provides a powerful illustration of dynamics that will continue to drive hiring challenges for years to come. An interesting poll reported by IT Jungle suggests that 55% of IBM i professionals are age 55 or over, having started their careers no later than 1987. With 27% more falling into the 45-55 age bracket, the long-term pipeline for IBM i talent narrows considerably: only 18% are 44 or younger. In short, companies exhibited a strong tendency to continue to utilize existing IBM i professionals on successive AS/400 and IBM i  architectures rather than develop and train new talent.

While IT Jungle’s data suggest a slight uptick in new professionals in the “IBM i” era (2008-present), their analysis shows ominous longer-term prospects when the actual volume of IBM i experts is compared to the total number of IBM i shops: 120,000 IBM i customers, with an estimated average of 3.2 staff per site, for a total 384,000 people in the installed user base. Compare that total to:

  • A projected 27,000 retirements in the near future.
  • An estimated 18,000/year after that.
  • The current replacement rate, which appears to be about 3,600 per year.

Of course, these numbers are not exact, but the underlying dynamics appear clear-cut. The next generation of IBM i talent simply won’t be able to fill every position currently required by IBM i businesses. The overall number of IBM i businesses is not expected to shrink at nearly the same rate, leading to more businesses competing for less talent.

Once a staff reaches the stage where one or two experts are “doing it all,”  an unexpected departure can suddenly leave the business with no access to expertise on business-critical applications. Even when retirements are planned in advance and no acute disruptions occur, a lean IT team that is hard-pressed to simply maintain your existing applications will find it increasingly difficult to execute meaningful enhancements. Finally, when a replacement can be found, it still may take time to get them up to speed–which can be a serious issue if the business is dependent on a small handful of IT staff.

How Third-Party Support Can Help Prepare for Retirements and Build a Bridge Over  A Turbulent Hiring Market

Expanded automation and more fine-tuned DevOps will both have a role to play in helping businesses stretch their IT talent base further. And migrating to the cloud can help reduce the support overhead associated with an onsite data center. But ultimately, any organization that relies on legacy systems will need to confront the inexorable long-term dynamics outlined above.

Third-party support can play a flexible role in addressing the talent crunch for managing legacy applications. Outsourcing critical support services is not an “either-or” proposition compared to maintaining your existing base of in-house talent. Third-party support personnel can supplement your existing staff by, for example, taking on more tactical support tasks for key legacy applications, freeing up internal resources to focus on long-term enhancement projects (or vice versa). And staff augmentation services and project-based technical staffing can help ensure the business has access to a broad array of talent that would be impossible to retain in-house.

A trusted, quality third-party support provider can also improve the resiliency of your organization to sudden or unexpected retirements or departures. A third-party support provider should take the time to understand every facet of your software environment and how it fits into your daily operations. This way, they will be able to step in to assume additional responsibilities if a critical resource suddenly becomes unavailable (either providing a bridge until a replacement can be found or taking on an expanded role permanently). In this sense, a quality third-party support provider can not only fill talent gaps but help protect your organization’s long-term IT knowledge retention, ensuring that valuable know-how isn’t permanently lost due to retirement. Ideally, a third-party support provider will help document software processes, helping preserve potentially valuable intellectual property.

In many cases, the economies of scale available to third-party support providers can also simply provide services more efficiently than is possible internally. Support providers can efficiently maintain a deep roster of talent with multiple skillsets, generating unique experience by working on challenging projects across different accounts. As the talent pool for legacy applications continues to shrink, these economies of scale will only become more critical for making the most efficient possible use of scarce IT talent. 

If you’re interested in a detailed real-life example, we recommend reading our case study which can be read by clicking here. Nicholas and Company, a food service distribution company in the Mountain West, found itself facing the sudden unavailability of their sole internal resource for warehouse management software that had been extensively customized for a decade. PSGi was able to step in, stabilize the situation, and eventually pivot back to long-term enhancement projects in addition to critical maintenance and support.

Or, if you’re facing a looming retirement and need to pin down a long-term solution, we encourage you to reach out to our team for help identifying the best path forward.

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