Overview :: I.S. On The Up

ICT a healthy business in SA again

Summarised from http://www.theworx.biz/mitts05.htm

14 April 2005: The information and communications technology (ICT) sectors in South Africa have returned to health, according to a new study released this week. The 2005 edition of the Map of the IT and Telecoms Sector (MITTS), a joint research study of the ICT market by independent research houses World Wide Worx, Razor's Edge Business Intelligence and Trigrammic, reports that the tide of loss-making by public ICT companies has turned. While four of the 37 listed companies included in the survey made a loss in 2004, this is down from more than a quarter in 2001, and compares well with other sectors.

The profits reported by the companies has doubled from 2002, and more than trebled from 2000 - from R5.4bn to R18.8bn. The market analysis of listed ICT shares in the report shows that share prices of ICT companies increased by 30% in 2004. "These figures confirm the conclusion of this report - that technology is once more a healthy business in South Africa," says Arthur Goldstuck, managing director of World Wide Worx. "This is great news both for the ICT sector and for the economy as a whole."

The study includes detailed overviews of the ICT BEE Charter, the legal framework for ICT in South Africa, and the technology roadmapping process of the Department of Science and Technology. It provides a comprehensive overview of trends, issues, factors and policies that will have an impact on ICT in South Africa in 2005 and 2006.

US IT Industry going through an upturn

The IT industry in the US is going through an upturn. The graph below shows the 2003 US "computer job downturn and the recent 2004 2005 upturn. The US computer job unemployment rate (2%) has decreased faster than the general unemployment rate.  Average salaries also continue to climb. (U.S. BLS data compiled by Richard Baskerville, Georgia State University, Oct 29, 2005)

US Monthly Unemployment %

The IT Upturn is confirmed by the following articles on the state of Information Technology (IT) and the IS profession.

The South African ITWeb Salary Surveys

IT Salaries at a Glance By Ranka Javanovic,  April 30, 2004

ITWeb's 2004 IT salary survey captured 3 112 responses from a cross-industry sample of South African IT professionals. There survey showed that there's certainly no glass ceiling for women IT executives. The highest salary reported in the survey was R2 million per annum, earned by a female telecoms sector consultant with a masters degree, aged between 40 and 45. In terms of remuneration their survey showed that 2004 was an above average year for IT staff .  Go to the ITWeb salary pages for the latest data.

In interviews on the current IT demand, FNB's Narsai says: Although there is a large supply of general and entry level IT skills, the skills set possessed by the majority of this supply does not meet the skills required. In key areas of business/IT need, there is very little supply, especially experienced and capable resources. He says a lack of skills is evident across the spectrum. Skills shortages exist across all enterprise technology areas, especially developers experienced in object oriented development such as J2EE, as well as those willing to work in Cobol. Making the situation more difficult is the fact that requirements are constantly changing. The current IT market reflects that clients are looking for candidates with the right technical and business mix. Companies are struggling to find suitable Microsoft .NET, C# and Cisco specialists.

IT Salaries take 2005 Leap

By Charlie Russo, News Writer, 07.19.2005 | SearchCIO.com

The Foote survey, which collected data on almost 170 skills from 50,000 IT workers in North America and Europe, found that overall pay for non-certified technical skills rose an average of nearly 5% in the last year.

Companies that overestimated offshore outsourcing savings have started to bring business critical systems and projects back in-house. As a result, IT pay increases that stalled when projects went overseas have started to climb again as those projects returned. At the same time, a host of non-technical skills, such as team building and communication, were among the most "highly prized".

Salaries for non-certified technical skills outpaced certified skills. The hottest growth in non-certified technical skills in the first six months of this year -- when compared to the same period last year -- was for SQL Server; WebSphere; Microsoft .NET; SQL Windows and Active Server Pages. Those skills enjoyed additional pay premiums over the past year. Other non-certified skills that enjoyed pay increases over the past six months included networking, which saw a 5.1% rise; database skills, which grew 4.3%; and application development tools, which grew 2.1%.

The Latest Tech Poll Report:

October 3, 2005 -- Results in this months CIO Magazine Tech Poll consolidates the optimism shown by CIOs over past few months. During September respondents believe IT budgets will grow by 9.3%, up from 7.1% recorded in August.

"For the past six months, CIOs have been decrying an overwhelming application backlog after three years of muted spending," adds Gary Beach, Publisher of CIO magazine. "These results are a good indicator that the backlog will be addressed. The one caveat: an inadequate supply of skilled IT labor."

The CIO Magazine Tech Poll provides technology and business executives, economists, and policymakers with a tool to gauge technology growth trends to assess the impact on the overall economy.

Consulting Firm Urges CIOs: Prepare For Worker Shortage

Courtesy of InformationWeek, February 08, 2005
Analyst firm Gartner recommends that CIOs prepare now for a shortage of workers that the company says will be occurring. By 2012 there are predicted to be 21 million new jobs, but only 17 million people entering the IT industry. Gartner attributes the decline to a drop-off in the number of people studying information technology in school and the aging U.S. population.

Top Ten Degrees in Demand 

CNNMoney November 14, 2004

A new survey indicates a brighter job outlook for new college grads compared with last year.

• A majority of employers expect the job market for the class of 2005 to be more robust than last year, with more positions to fill and higher starting salaries.
• Graduates with a bachelor's in business, engineering and computer-related fields will be in highest demand.
• According to NACE, information sciences and systems grads earn $42,375 a year on average. That's up 10.7 percent from a year earlier.

 CIOs expected to spend more in 2005

By Ed Parry, News Editor, 22 Dec 2004 | SearchCIO.com

Fresh numbers from a Forrester Research Inc. survey show that enterprises plan to increase their IT spending by 3.9% in 2005, but an analyst with the Cambridge, Mass.-based firm said the actual figure may be about twice that.

Forrester polled more than 1,300 IT decision makers in North America and Europe, from large enterprises as well as small and medium-sized businesses. Analysts then factored in other variables, such as economic conditions and revenue growth and adjusted the numbers. The sum of all that tweaking? A forecasted 7% increase in IT spending for 2005.

The prediction dovetails with recently released figures from International Data Corp. analysts who predicted a 6% spike in global IT spending, with the strongest growth in Central and Eastern Europe, China and India. A Gartner Inc. study found that CIOs are shifting out of cost-cutting mode and are becoming more focused on handling growth in a smart (i.e., unlike the '90s) way. 

The number of I.T. graduates is shrinking

IN DEPTH: TECH BIZ Summarised from Atlanta Business Chronicle - August 23, 2004, Steven Sloan

Merle King, chairman of the department of computer science and information systems at Kennesaw State University, said enrollment in technology majors has dropped 25 percent in the past three years. This is causing alarm for Richard Baskerville, professor of computer information systems at Georgia State University. He said the decrease in students studying technology will cause a "skills shortage" that could have dramatic implications for the industry.

Dion DeLoof, president of Anteo Group LLC, an IT staffing company, said he is becoming increasingly alarmed by the drop in technology enrollment and he expects a skills shortage to hit the industry hard. "I think [a skills shortage] will happen and I'm concerned. I'm even more concerned when I look five or six years out," he said. But Sharon Habibi, founder of Syscom Technologies, said the pinch already can be felt. "We have a skills shortage even now. Good people are becoming increasingly hard to come by," she said.

Despite the challenges facing the industry, DeLoof said technology programs are doing a good job of preparing students for the work force. "Graduates coming out of the four-year schools are showing that they've had an excellent education," he said.

CIO Executive Guide: Hiring and Retaining Skilled IT Professionals

By SearchCIO, 17 May 2004

Abstract:  The pressure is on CIOs to spend their cash wisely and make smart decisions on technology AND staff investments. The role of IT in the organization has changed over the years. IT executives are no longer interested in only hiring the most "techie" candidate. Today's IT professional should also have the "soft" business skills needed to succeed.

 2005 IT predictions  SearchCIO Featured Topic January 2005

Take heart, tech workers  CNET News.com November 23, 2004

Mid-Year IT Staffing Update  CIO Research Report September 01, 2004

Now Is The Time to Hire Assistant CIOs  CIO Update August 3, 2004

IT Industry Optimistic about Business Conditions

Revenue growth of 10 percent or more expected this year By Jon Surmacz,  August 19, 2004

Looking for a cheerful message? A new study commissioned by the Computer Technology Industry Association (CompTIA) suggests confidence about the overall business climate for the next 12 to 18 months.

The study, commissioned by CompTIA and conducted by the Yankee Group, surveyed more than 500 IT resellers, value-added resellers, service providers and systems integrators in North America about their business challenges and their hopes for the coming year. In addition, focus groups were conducted in two cities in the second quarter of 2004.

According to a CompTIA release, nearly 90 percent of the studys participants expect revenue growth of 10 percent or more for their company in the next year; slightly more than half project a 20 percent revenue growth. Only 9 percent say they expect a revenue decline.

Tech Spending Outlook Remains Upbeat

IT Labor Market Heats Up BY LORRAINE COSGROVE WARE  August 2004

Growing IT budgets and increasing demand for IT workers paint a positive outlook for an IT spending recovery for the remainder of 2004. According to the AugustCIO Magazine Tech Poll, CIOs expect their IT budgets to grow by 8.9 percent in the next 12 monthsup from 8.1 percent reported in July. IT executives will allocate resources to IT projects that have taken a back seat to budget constraints and overdue hardware upgrades over the past two years.

The Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, climbed back up from 3.4 in July to 4.0 this monthits highest level all year. When asked about IT spending in eight specific technology areas, the percent of respondents planning to increase investments overall rose two points to 47 percent in August. While the majority of companies polled will continue upgrading their aging hardware (53% will increase spending on computer hardware and storage systems), an increasing percent of CIOs also plan to invest in infrastructure software (53% in August compared to 48% in July) and e-business applications software (42% this month compared to 38% last month).

Backlogs of IT Projects Put Key IT Skills in Demand

Close to two-thirds (62%) of IT executives surveyed reported experiencing a significant application backlog at their company currently, and roughly one-third of these organizations will increase spending on staffing to address the need.

IBM to add 15,000 new jobs

By Reuters January 18, 2004, 9:40 AM PST

• IBM will hire 15,000 new employees--50 percent more than originally planned--in areas such as software and services because of a rebound in the economy, a top executive said Saturday. The number is the highest since 1991.
• The company plans to move up to 3,000 jobs from the United States to developing nations in 2004, an IBM spokesman said.
• This follows news from the world's largest computer company that customers started buying more technology during the fourth quarter. IBM Chief Financial Officer John Joyce described 2004 on Thursday as "the year when the IT industry will begin its next growth cycle."

Software to shine in 2004

Chips and hardware companies ruled the tech roost in 2003. Next year, software should reign supreme.
December 17, 2003: By Paul R. La Monica, CNN/Money Senior Writer

• Overall, the average estimated earnings increase for 2004 for 41 software companies with a market value of at least $1 billion is 39 percent, according to Thomson/Baseline.
• "People will move into software next year. It's a question of when, not if," said David Hilal, an analyst with Friedman Billings Ramsey.

The 10 fastest growing occupations, 2002-12

Summarised from http://www.bls.gov/news.release/ecopro.t04.htm

The following three IT occupations with their predicated growth, were listed in the 10 fastest growing occupations, 2002 2012 by the US, Bureau of Labor Statistics:

The most significant source of post-secondary education or training for all three occupations was listed as a Bachelors degree.