Job Market Is Expected to Stay Cool

Companies will continue to avoid technology projects that require expensive consultants, analyst says.

Remember the golden era of the SAP consultant? Lets go back in time to, say, 1996. A person who was expert in R/3 implementations could write his or her own ticket—and many did, often jumping from one high-paying gig to an even more lucrative one.

If you were one of the lucky ones, those were the good old days. But to most businesses, those were the bad old days. Consider the value enterprises were getting for all that expense. Consider this from Gartner analyst Ben Pring: "IT buying organizations refuse to go back to the days of buying expensive oversize software that requires complex implementation projects, uses expensive consultants, is sold with opaque costs and benefits, and is based on the belief that IT delivers competitive advantage."

Sounds a lot like the heyday of R-3 and other ERP deployments, doesnt it? Data warehousing also springs to mind.

The memory of those gilded days is, no doubt, keeping a tight rein on IT spending and IT salaries, in particular. Pring said as much in stating the major theme of Gartners Predicts 2005 for services and outsourcing: "Theres a growing realization that the major cost component of IT is the people involved in deploying and managing that technology." So the goal for much of corporate IT for next year will be to do more—but with no more people. What will it take to bring back robust IT hiring? "No one would be rash enough to say that people are going to go away, and yet no one is sure what will bring the people back," said Pring.

Out and about

Another force applying downward pressure to U.S. IT wages is the increase by Congress, just before the Thanksgiving break, of 20,000 to the current H-1B visa limit of 65,000. The catch: The 20,000 visas must go to foreign nationals who have earned advanced degrees at U.S. universities. Exempting the cream of the crop from the cap relieves pressure at lower skill levels, an executive at an outsourcer noted. "It frees up some number of other people," said Marc Hebert, executive vice president at Sierra Atlantic, an outsourcing company with offices in Hyderabad, India, and Fremont, Calif. "We are going to benefit from the other people who we had in the queue." Hebert said, "This will relieve the upward pressure on prices."

The 65,000 limit was hit Oct. 5, the first day of 2005 visa availability.

/zimages/6/28571.gifClick here to read about the controversy over the extra H-1B visas.

Sun said it will buy SevenSpace, a move that will let Sun offer managed services of non-Sun environments, including HP-UX and IBM AIX systems, the company said. SevenSpace technology can manage SAP, Oracle, PeopleSoft, and other enterprise applications and databases with low equipment and manpower requirements, according to Sun.

IBM said it will buy Liberty Insurance Services, the U.S. business process services and solutions operation of RBC Insurance. Under the pact, IBM will handle business processes for RBC Insurances U.S. operations, including contact center management, policy administration, claims management, and payment receipt and reconciliation. IBM will take on 700 LIS employees. The unit will deliver life insurance and annuity processing for more than a dozen life insurance companies worldwide.

Accenture unveiled last week a software tool kit to enable businesses to rapidly deploy applications using networks of wireless sensors. The software was field-tested in monitoring growing conditions at a California vineyard but can be used in a variety of industrial applications.

EDS signed a $480 million, 10-year deal with the British Columbia Ministry of Provincial Revenue. The aim of the work is improving customer service and saving $38 million per year, said a statement from Provincial Revenue Minister Rick Thorpe. EDS will coordinate more than 40 revenue systems across ministries. The province took measures to ensure that data about its citizens stays in Canada by prohibiting data storage and remote access from outside Canada. EDS created EDS Advanced Solutions, a wholly owned British Columbia subsidiary of EDS Canada, with headquarters in Victoria, to perform the work under the pact and will take over an unspecified number of British Columbia government employees.

Stan Gibson can be reached at stan_gibson@ziffdavis.com.

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