More Trends…

I make it a habit to regularly meet with folks in the IT staffing industry on a regular basis. It is always good to keep up with what is happening around town, and to discuss ideas on dealing with the challenges we all face. In fact, I estimate that on average, I talk to anywhere from two to ten sales people, recruiters, branch managers, or senior consultants every week. These are one on one conversations, not networking events.

It’s no secret that the economy is tough and that there are changes happening in the business. We saw this back in 2001 – 2003 when the economy was soft. Formal procurement practices really took hold in most companies with large IT services spend. Off shore competition from the likes of TCS and Infosys have found a nice niche and will only continue to grow their market share. We are seeing a similar (although I feel more systemic) change today as companies evolve their “procurement” to more of a “human capital supply chain” type of model.

(As an aside, I despise terms like “human capital”. We are talking about PEOPLE, not widgets!)

What really surprises me is the reaction of my peers and colleagues to this change. It ranges from subtle resistance to outright denial. Per my previous post, IT is a typical industry on a product life cycle, and IT services are following the product life cycle. Given this, should anyone really be surprised that margins are going down, the supply chain is consolidating, costs are being reduced in the supply chain (or profits depending on perspective!), and labor rates are being impacted? Particularly in a down economy?

I suppose I can understand how a person that has been insulated inside the walls of a large corporation for 20 years or so might be unnerved by these changes. You dedicate your career to a company, put forth a good effort, and drink from the company fountain. Then, one day you see your colleagues laid off and jobs go out the door, only to be replaced by lower cost labor. I can understand how a person might have some resentment.

At the same time, it surprises me that my contemporaries and competitors who are out in the market in front of customers and companies every day resist and deny the changes happening. How can a person be in an industry for 15 or 20 years in a sales capacity and not understand the trends and adapt their business to the direction the customer base is headed? Or, decide to target another market with their services?

Can there be anyone that’s unaware of what has happened to the manufacturing base in the US and not see the same thing in the services sector? It boggles my mind. In the technology field, we like to point out how innovative we are and that we serve as change agents for our clients and business at large by providing better solutions and tools to facilitate commerce. But when it comes to change that impacts us, we are among the worst at dealing with it!

One of my sayings is, “I’m not that smart, and even I can figure this out!” For whatever reason, I tend to try and step back and look at the big picture. I can thank my parents and upbringing for the inquisitive and analytical nature, and my education from The Ohio State University and University of Dayton for providing the framework for looking at the macro picture. I’ve been fortunate to meet get to know people along the way that provide other ways of looking at things, and additional perspectives. There are reasons that companies do what they do, and my job as a services provider is to understand and acknowledge these reasons.

It’s pretty simple, really. Be aware of what is happening in your market space, adapt and evolve, or move on.