As all newspaper editors know, the summer period is usually ‘news light’ and therefore they have to run with ‘dog bites man’ stories. The insurance market is no exception as far as technology developments are concerned, so I thought I would go back over the pond in search of IT trends.

The Society for Information Management (SIM) unveiled its survey of top CIO concerns this week. What’s on the headache list? IT and business alignment, the No. 1 issue for four of the past 5 years, reclaimed the top spot after dropping to No. 2 last  year. The IT talent issues that dominated a year ago — attracting IT professionals and retaining IT professionals, both ranked No 1 last year– slipped: retaining IT pros fell to the No. 8 spot, attracting talent to No. 4.

The survey of 291 companies — 350 company executives — was done in June, and it would be natural to conclude that economic realities have intruded on the profession. In anxious times, people are more likely to stay put, grateful for a job. IT strategic planning, No. 8 a year ago, is up in the No. 3  spot this year, suggesting that hard times call for better planning.

But SIM’s Jerry Luftman, author of the survey, cautioned against reading too much into the changes, noting that in the broad survey (to be released in November at SIM’s annual meeting) “there is no sense the sky is falling.”
“We do ask other questions vis-à-vis how they allocate their budgets — do they see their budgets going up and down, the picture on hiring, and so on. Knowing what those responses are, it is clear to me that even though the economy is on their minds, things seem to be OK,” said Luftman, whose day job is professor of IS programs at the Stevens Institute of Technology in New Jersey.  “We are not panicking.”

 “Without giving you too much, people seem to be still having opportunities to hire, budgets seem to be staying the same or going up, even with the concerns,” he said. When asked why IT and business alignment persists as a top concern, after all these years, Luftman gets a little hot under collar. “First, it is that people in academia and people in consulting especially are playing a semantics game. Everybody says there is not an alignment problem-it’s ‘linkage’ or it’s ‘integration’ or it’s ‘convergence.’ All of these different words!” said Luftman. “What we need to do is stop debating what we call it, and focus more on how to address the problem. That is probably the No.1 problem with why this is it is taking so long.” But here’s the outrage: ”We are still focusing too much on how IT is aligned with the business, as opposed as to how IT and the business are aligned with each other. It’s an equal partnership; it’s a two-way, it is not a one-way thing. IT should not just be subservient to the business.” Funny, I’ve been known to feel the same way.

Apparently, the Top 10 management concerns really don’t budge much year on year in the SIM survey, unlike the top technologies, which tend to be more dynamic.  Luftman revealed that although the two top technologies — virus technology and business intelligence — again occupy the top two spots on the survey list, the remaining three are all different: business process management (BPM) and continuity planning/disaster recovery are tied for No. 2, and server virtualization makes the top 5 for the first time. “I thought I would have seen a lot more of the cloud computing, SOA and stuff like that,” Luftman said. So, SOA in the opinion of the SIM is ‘cloud computing’.

The other survey was concerned with what are the roles that command the highest salaries? In the US ,jobs in Voice over Internet Protocol (VoIP) telephony commanded the highest hourly rates of all IT service jobs during the second quarter of fiscal 2008, according to the latest market report from OnForce Inc., an online jobs mart where employers and workers meet on the Internet and agree on an hourly rate.
Technology jobs related to point-of-sale systems and printers paid the least -- roughly one-third of what VoIP jobs commanded. The high hourly rates for VoIP, which follow the same pattern seen during the first three months of the year, should not surprise, according to Paul Nadjarian, vice president of marketing for Lexington, Mass.-based OnForce. "Where there is mystery, there's margin. VoIP is an emerging technology compared to more mature categories like printers," Nadjarian said. "What was surprising is that the hourly rate index for VoIP actually increased, rising from an index score of 1.50 in Q1 to 1.95 in Q2. So relative to other categories, VoIP work is actually getting more expensive, with hourly rates now nearly double the average."
As more people gain the skills associated with VoIP implementation, the prices ought to go down, Nadjarian said. OnForce's quarterly rankings do not provide the actual hourly rate but are indexed against a national average, pegged at 1.0, which is derived from the approximately 750,000 work orders processed since the company formed four years ago. The report offers a snapshot of the IT service economy, in particular of the correlation between wages and the open capacity, or free time, of the 12,000 U.S. IT workers actively using the site.

The OnForce model, which has won notice in the Wall Street Journal and been praised by analysts as a win/win for buyers and sellers of IT services, is sometimes referred to as "community sourcing."  IT professionals post resumes, including feedback from other jobs they've had, and respond to job requests in their locales as the mostly on-site work requests get posted, usually in a matter of minutes. The average hourly rates are driven in large part by availability. If there are 1,000 IT workers in an area but they all are booked solid, the rate will be higher than in an area with fewer people in less demand. This is economics 101 and is also what we have seen in our vertical of insurance. Certain technologies are in demand and that demand is enhanced by the fact that customers want IT professionals who possess the ability to apply those technologies within their particular vertical. People who have those skills tend to know their worth and as such the cost to service providers like Scyllogis of these people is increasing much faster than basic cost of living inflation.
Security jobs came in second in the job rankings, with an hourly rate index of 1.64, followed by wiring and cabling (1.37), and consumer electronics (1.25). The job category with the highest volume of work was desktop computers, a fact OnForce attributes to the "massive installed base" and the PC market size. The fastest-growing categories in terms of volume, however, were consumer electronics, point-of-sale and VoIP.

From a big-picture perspective, OnForce has seen the volume of IT services work increase considerably as the U.S. economy has sputtered. "We think that people are moving to -and are more open to move to - a more contractor model," Nadjarian said. "They are looking at variable workforce." That claim chimes with the latest IT services forecast published in July by Gartner Inc., the Stamford, Connecticut based IT consultancy. The firm is predicting a 9.5% growth worldwide in IT services in 2008, up from the 6.8% predicted earlier in the year. The prediction was based on strong first-quarter results from several major vendors of IT services, but with a qualification: Some of the increase is due to the decline in the U.S. dollar rather than to a dramatic increase in demand.

Still, compared with other sectors of the U.S. economy, IT services continues to hold its own, according to Gartner analyst Kathryn Hale, an author of the report.
Nadjarian thinks the up-tick in contract work is being driven by service firms' need to employ contractors to keep costs down. "The technology service companies that are bidding on those contracts need to be able to provide very high-quality service at a reasonable price to win those bids," he said. "In order to do that, they have to resurface the cost of their business. And in order to structure the cost, those firms are moving toward a contract model."