The trend: commoditisation of I.T. and falling rates

[NervousRexx]

Straight technical areas can be outsourced to people overseas, but talking to people in a way they understand can't.

I agree and from a development perspective it’s unlikely outsourced coders will understand the business process so if technical/functional specs aren't absolutely watertight problems with cheapness begin...and a big mess when the western business rejects the solution. This isn’t directly linked to rates but the idea everything will eventually be outsourced is IMO is never going to happen (not before I retire at least).

[northernladuk]

As stated, there's just an abundant supply of mediocre 'contractors' who just don't have sufficient skills or experience to compete for a diminishing pool of opportunities. Contracting is not an entitlement.

and the rest......

This is what gets me riled when posters come on here without a clue and make no effort to become a contractor. Annoys me to know I may be up against these people for roles. Luckily enough it all comes out in the wash but this is a trend that isn't going to plateau anytime soon.

[NervousRexx]

posters come on here without a clue and make no effort to become a contractor

Agreed, the wheat needs sorting from the chaff in this thread.

[Kelstar]

Would you advise a young whippersnapper (late 20's / early 30's) thinking of contracting to jump now? In all honsetly, don't think I would if (s)he wasn't pushed from their comfortable permie role.

N.B. speaking from a WAS/J2EE skillset point of view.

I am that young whippersnapper. 6 years working for a Big4 in Management Consultancy. Got cheesed off with the flogging at consultant rates with no reward. Decided to stop moaning, and work for myself. Same clients, no middleman (I work direct so cut out agents) and do a job I am good at and enjoy.

Someone made a good point earlier - I trebled my permie salary (taking into account tax and NI savings) and feel lighter and less stressed as Big4 protected consultant. I do exactly the same job...

Banking over £100k a year at 29 - happy with that (apologies I do understand this makes me sound like a total but you get my point)

I do agree that there is an unnerving trend in the industry so I have already invoked my Plan B - methodology development. Often I am asked to produce literature, putting down on paper management techniques, evaluation tools etc... for the client. I have set about working with my current client and producing this business plan. Putting down on paper how I conduct my activities so perm staff can use this when I'm no longer around - cheap knowledge transfer for them. High return for little effort for me. I am hoping this plan will see me through when I want to have children and can't be in the office. Sell 2 x £50,000 TOM Design methodologies a year that take me approx 6 weeks to write - LOVELY!

However its all pie in the sky and may not materialise, so I may have to come up with a Plan C.

My point (I'm getting to it) is given this trend I gave myself the challenge of coming up with a variety of client delivery models should my bum on seat services not be required. I need to have a back up plan which is realistic and viable (hence working with current client to build the proposition). Its a lot of work but hopefully it will pay off.

Lastly I 100% agree with the comment made regarding chaff contractors. There were just as many in consultancy and one of the reasons I left was these k***end who never delivered, leaned on my technical knowledge to see them through a day, but talked a good game getting on further than me. I couldn't care less now as an independent. So long as the client pays my invoice when I'm in work, on you go taking on tulip contractors. They get found out eventually....

[nomadd]

What gets me riled is when other posters come on here.

There, fixed that for you.

[northernladuk]

There, fixed that for you.

[stek]

Wow - Just makes me more depressed - what rate are you on?!!

Did a quick calc, about 650 a day. For five years, no breaks!

[Wanderer]

Won't take three years to re-skill as a professional ukulele aficionado will it? This guys started quite recently but now has Ukelele Aquisition Syndrom

Maybe he would like to join these guys?

[contractor75]

Mod Post.

Hi Contractor75,

Please see the post 'Behaviour in Professional Forums' post.

If you want to discuss a position, please do so in General.

[DS23]

Taking a lead from the theads "WebSphere, what's happened?" and the "At what point do I consider... Perm?", as well as the numerous ‘rate-cut’ threads, I wanted to throw down some thoughts I was having on the subject of contracts and rates in general..

great post chimp master.

perhaps to elicit some reasoned discussion between us all.

as bobspongepants would say "good luck with that".

rate drain is due to:
the offshore model become standard
recession causing project freeze
recession causing job cuts and flooded markets
recession driving greater use of offshore model
technical and architectural changes creating obsolete skills
other stuff i'm too hungover to think of

determining what percentage of rate-drain and contract loss is purely due to the offshore model is difficult to tell. the recession must have accelerated the process and it will continue to do so. tasks that can be accomplished offshore for a fraction of the price that we used to command will become the norm.

there are plenty of failures inherent in the offshore model but these service providers are not going to become worse at what they do - they are going to get better. much, much better. i am not convinced that becoming technically specialised or adept at riding the latest wave will provide security or stall the erosion of rates.

having said that i don't think it is all doom and gloom. the downturn is creating a huge backlog of work. there are an awful lot of customers with kit and process that is getting older and older. the tipping point of waiting and saving versus spending and gaining is getting closer. there will be plenty of work out there soon enough - the trick is to be in a space that means you are getting the contracts.

one thing has been apparent this year has been the increase in offshore integrators trying to find resources willing to head their projects in europe. the indian firms have the technical resources at super slim cost but they need to have local skills to manage and set expectations with the end clients. customer facing skills are key. communicate and manage.