IT contractors must evolve and adapt to the new challenges raised by the commoditisation of IT. The evolution and rise of cloud based services, such as software-as-a-service (SaaS), has introduced a commodity-based pricing model that can no longer support teams of IT contractors on high day rates.
This is according to Mark Sweeny of Certus Solutions. A provider of large scale end-to-end IT Enterprise Resource Planning (ERP) cloud-based business change programmes, he notes: “The new world of implementation has not been kind to the traditional contractor and rates have suffered as a result.
“However, the old world of contracting is not yet dead and there are many years left in legacy products retained by IT contracting’s major clients.”
Spotting the ‘bleeding edge’ of technology, and staying ahead of the curve
It has been three years since Sweeny first spoke exclusively to ContractorCalculator, and during that time he has grown his business from a one-person contractor limited company into a multi-million-pound turnover IT service provider with ten employees and a team of a fifty contractor associates.
The new world of implementation has not been kind to the traditional contractor and rates have suffered as a result
Mark Sweeny, Certus Solutions
Success has come largely from thinking about what client projects will need in future. “We identified the potential of cloud services, and in particular Oracle Fusion Applications and Taleo, in early 2011. Our early investment in becoming expert in the software has delivered a considerable return in terms of new contracts and business growth,” explains Sweeny.
“My business partner and Certus Solution’s co-owner, Tim Warner was trained in the new technology by the Oracle Corporation at the Oracle University in Redwood Shores, California. He also participated in a number of user experience labs to assist the development teams with creating Fusion from a look and feel perspective.”
Sweeny believes that Warner’s status as an Oracle ACE, which is the highest possible accolade awarded by Oracle, together with the skills and Oracle University training of other team members, makes Certus Solutions one of the leading centres of excellence in Oracle Fusion Applications in the European, Middle Eastern and African (EMEA) markets.
Employees lower costs and managers must still earn revenues
As a result of what Sweeny sees as the commoditisation of IT as cloud services proliferate, fulfilment and project delivery is now only possible through taking on project managers, developers and solution architects as employees.
“The cloud services model simply cannot support contractors earning £550 plus per day, with budgets lower in the ten and hundreds of thousands of pounds range and projects being delivered in weeks rather than years.” says Sweeny. “We still use contractor associates when additional capacity is needed, but rates are significantly lower now than in the past.”
And although the business has both employees and contractor associates, the management team also ‘gets their hands dirty’. Sweeny says: “Tim, I and our management colleagues all continue to generate revenues; everyone in the business sells and earns.”
There is still hope for contractors who can read the market
According to Sweeny, although the market is very different to what he found when he started his IT career aged eighteen, in some ways little has changed: “When I started work, I met the then Head of IT Colin Fisher for what was then Lloyds Bank. He explained that the market always drives towards ‘better, cheaper, faster’. Twenty-five years on, although technology has changed beyond recognition, those fundamental principles remain.”
For many client organisations, cloud services represent ‘better, cheaper, faster’, and Sweeny confirms that the total cost of ownership is much lower than for traditional ‘premises-based’ implementations. Hence the move to cloud services, and the growth of firms such as Certus Solutions.
“There will still be a role for the traditional contractor who can read the market,” says Sweeny. “Contractors will still be needed by organisations that do not adopt cloud services, or adopt them slowly. And for some time to come contractors will be needed on legacy systems and in specific niches – data migration and interface integration are natural opportunities.”
Combining experience with the ‘Facebook generation’
Sweeny is also confident that IT contractors will always be needed in some capacity, simply as a result of their experience and business skills. “The ‘Facebook generation’ has the hot IT skills to deliver projects for mobile devices with fundamentally different interfaces.
“However, cloud services are just that – services. Software that can be configured, but not customised. So, you still need people who understand how those services work in a business context, such as finance, payroll, human resources and procurement operations. Younger IT professionals have the right IT skills, but tend not to have the in-depth knowledge of and experience in the services from a business perspective.”
It is always a balance between knowledge of new technology, business skills and experience – a balance Sweeny strives to achieve with his team. “We’ve gone from IBM mainframes to where we are now with mobile tablet computing, and IT will always continue to evolve.”
Maintaining the EMEA centre of excellence and expanding footprint
The next challenge Sweeny plans to tackle is to expand his businesses’ footprint, which will almost certainly mean hiring more staff and taking on senior contractor associates: “New clients and contracts will mean new staff, and using a combination of employees and contractors enables us to be flexible.”
The firm is also developing new methodologies for deploying Oracle Fusion Applications and Taleo solutions, and Sweeny is keen to maintain Certus Solutions as a training and implementation centre of excellence in Europe, the Middle East and Africa (EMEA).
Sweeny concludes: “In addition to maintaining service delivery now, we always have one eye firmly on the future, so we can be prepared for the next evolution of the IT market. The world is always changing and contractors keen to maintain their contracting lifestyle would be wise to do the same.”