Compensation
As CIOs Look Inward, Consultants Trim Rates
Client CIOs are increasingly focused on retaining the required skill sets in-house and reducing their reliance on outside firms, according to a report by Lehman Brothers.
Large services firms are reacting by continuing to cut billing rates. The average billing rate for the first quarter of 2002 was $124 per hour, down slightly from the $126 per hour during the last quarter of 2001 and $128 per hour in the quarter preceding.
Utilization
Utilization Rates Mask the True Story
There was a slight uptick in average utilization rate among public IT consulting firms for the first quarter of this year, according to Lehman Brothers.
The average employee utilization rate was 66.3 percent, up from 63.8 percent for the last quarter of 2001.
However, the analysts say that this cannot be viewed as a leading indicator of an economic turn, given that it is largely a function of forced Head Count reductions and not an underlying recovery in demand.
e-Commerce
Higher ROI for Companies with Tighter Integration of Business Processes
The companies most likely to succeed have achieved very high levels of external integration with their customers, suppliers, and business partners, according to a report by NerveWire, Inc., which surveyed 160 IT and business professionals in North America.
Companies that were the most tightly integrated with their trading partners said that their initiatives generated, on average, 40 percent increases in revenue, 30 percent reductions in cost, and 35 percent increases in customer retention rates.
The biggest barriers to collaborative commerce have less to do with the technical complexities of linking different companies' systems and more to do with the organizational complexities of getting companies to work together. Respondents had the least success in overcoming distrust in sharing proprietary information with other companies.
Wireless
LAN Growth Driving Consulting Opportunities
In less than half a decade, wireless LANs (WLANs) have entered the limelight. However, this is not new technology; spread spectrum technology predates even most of IT, having been invented at the dawn of World War II. From its current level at $1.45 billion in 2001, the worldwide WLAN equipment market is expected by IDC to top $3.72 billion in 2006.
The growth of the public wireless LAN (or visitor-based networks) is a key factor driving the demand for various wireless and mobile consulting, integration, and managed services, according to IDC. The firm forecasts the worldwide market for wireless and mobile infrastructure consulting, integration, and management services to rise to $37.42 billion by 2006, representing a compound annual growth rate of nearly 15 percent.
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