CXO

Economic upswing? Consultants say not yet

Some experts have pointed to the consulting industry as a potential gauge for the economic climate. To test that theory, we recently asked TechRepublic members if their consulting business has seen any signs of an economic upturn. Here's what you told us.


It seems every industry is carefully watching the horizon for evidence of an improving economy, and some industry experts have suggested that consultants are often the harbingers of economic change.

When consultants can easily find work, conditions are generally improving or are already good. When consultants are struggling, the economy is usually beginning a down cycle.

We recently started a discussion to find out if consultants believe the economic turnaround has begun. Read what your colleagues are saying, and if you'd like to add your two cents, join the discussion.

Some signs of hope
TechRepublic member Don Bauer said he's hearing about many projects that will begin in January. A "nice change," he said, "since nothing has come in since July. Rates are lower, though, than they were before."

Ron Biava said he has seen business pick up moderately since Thanksgiving, although most projects are less than $1 million. Member HDA agreed and said that business has increased in "mission-critical areas" and with projects that do not require large investments.

A member who calls himself grouchyman was laid off in March but said he has three potential contracts on the line, all of which came about within one week. "All of this happened in the past several days, so it may be a fluke or the beginning of a recovery," he said.

Neal Bishop is a database administrator who was laid off from Intel Online Services seven months ago. He's been in the IT industry for 30 years and also subscribes to the notion that the market is improving in certain areas.

"The only bright spot is the federal government," he said. "This area has picked up since September 11, especially in the classified IT environments."

Bishop spent three-quarters of his career working for the U.S. government and has seen a renewed interest in his experience.

"Lately, I have received numerous calls from contractors looking for currently cleared personnel," he said. "However, my TS [top secret] tickets became inactive seven years ago; therefore, they become disinterested."

Some say “nay”
TechRepublic member Flang said many businesses continue to feel the impact of a recession and that the terrorist attacks of September 11 and the ensuing war on terrorism have exacerbated the decline.

"I don't expect to see a turnaround until late in the second quarter of 2002," Flang said. "Until consumer demand returns and fear of travel abates, we will continue to see a lower demand for IT resources, particularly consultants."

SMMurphy, who switched from contract consulting to internal corporate consulting last year due to a lack of contracts, said consultants are not getting their contracts renewed where she is working.

Predictions for the future
"I see more consultants each week working to get fewer projects," said member LiquidSignal, who said he thinks the turnaround will begin mid-January. Other members fear it will be a much longer wait.

Tony Brown is a consultant from the San Francisco Bay Area who's currently in Seattle "trying to survive this new economy." He has been working in the technology business for 28 years and said the growth of the market will remain stagnant until there's a return of creativity to the industry.

"Creativity was what the growth of tech was all about," he said. "Until the VC [venture capitalist] world gets over the fact that they made mistakes in judgment about what they invested in during the dot-com period and let the real creators back in the game, things will stay the same."

Brown said creative efforts in the B2B, CRM, and security markets will be the wave of the future and that "employers will take risks again when they are forced to be competitive in markets that are driven by new services and products."

Are you switching specialties?
Are you changing the focus or specialty of your firm to compensate for a lack of business in other areas? Write and tell us how you're changing to fit the needs of your clients or post your comments below.

 

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