Does the Wall Street Crisis Spell Trouble for IT?
The turmoil on Wall Street has played out like a drama of Shakespearean magnitude. First Bear Stearns and Lehman Brothers disappeared, then Merrill Lynch fell into Bank of America. Now, Morgan Stanley and Goldman Sachs are regulated commercial banks. The plot thickened with the promise of a $700 billion government bailout, and executives and average taxpayers alike wonder where the fiasco will lead next.
So far, the effect of the financial crisis on the IT industry is unclear. While some claim technology service providers could benefit, HP recently announced it was cutting up to 24,600 jobs — about half of which would be in the U.S. So does the Wall Street crisis spell tragedy on the IT job front, or is all that dialogue “much ado about nothing?”
According to Jerry Luftman, vice president of academic community affairs for the Society for Information Management (SIM), there’s no need to send IT professionals into full-on panic from the Wall Street and HP reports. But he said it’s always good to be prepared, and recent headlines demonstrate the good sense in revolutionizing one’s skill set.
“The numbers that I’m seeing basically are suggesting there are going to be changes, but the sky is not falling,” said Luftman, who also serves as a distinguished professor and program director of the master’s degree program in Information Systems at Stevens Institute of Technology. “[IT professionals] need to, in their respective companies, really do their homework: Know what’s going on, differentiate rumors from fact. It never hurts to be prepared.”
Victor Janulaitis, CEO of Janco Associates, a Nevada-based IT management consulting firm, painted a grimmer picture of the financial fallout’s effect on IT. He said if individuals lack certain skills, there could be danger.
“They’ll start looking at what they call ‘marginal performers,’ and [those employees are] going to be out of work,” Janulaitis said. “They might be in service management; they might be in customer support. They might be a programmer who has very, very generic skills [or] an analyst with very, very generic skills.”
Regarding reports that suggest tech firms could benefit as a result of more qualified IT talent coming from Wall Street, Janulaitis pointed out that these firms’ salaries wouldn’t compare with the numbers the Wall Street IT professionals are used to.
“Their compensation isn’t very comparable to anybody else,” he said. “They have to go be a CIO at some enterprise in order to get that same salary.”
Luftman offered a different perspective.
“I don’t see the panic yet,” he said. “In fact, I see the IT executives working closer with business executives in anticipation of these economic questions. The numbers that I’m seeing basically are showing that the number of people who will be hired next year will continue to be on the rise — not perhaps as large as its been — but it still looks very positive. And salaries look very positive, and budgets look reasonably positive for IT.”
SIM recently reported that IT executives identify the lack of IT and business alignment as the top concern for companies. Luftman said one key way to remedy that misalignment — namely, achieving a more encompassing set of skills — also happens to serve IT professionals well in the event of abrupt job transitioning.
“It’s very different today than it was even a few years ago,” he said. “And the problem by and large is that folks still believe that technical skills are the most important skills for the IT professional. While technical skills are important unto themselves, they’re not as important as a well-balanced set of other skills.”
Examples include management and project management skills, business and industry knowledge, effective communication — which includes presenting, writing, negotiating and marketing — and being able to work effectively in teams, Luftman said.
“These are the important things that, too frequently, IT people do not have,” he said. “You can be the best technical person in the world, but if you can’t work effectively with your business partners and work with them in identifying opportunities to leverage IT across the company, who cares?”
Janulaitis added that keeping skills current is critical, especially in the face of the financial crisis.
“[IT professionals] have to know what the latest technologies are,” he said. “They have to have an outward orientation. They can’t be focused inwardly to IT; they have to be focused to business so they can apply themselves to the business world. Foremost, they have to be prudent in the kinds of roles they assume within organizations. If you go to work for one company that’s in an industry in trouble, you’ve got to be very careful because that company may not be there [long].”
Whatever the ultimate effect the financial crisis has on IT, it’s evident that professionals must polish their repertoires and be ready for a scene-change.
“The mission-critical project managers, [they’re likely the ones with] the most transferable skill set,” Janulaitis said. “Somebody who knows how to manage a project, deliver a project on time and within budget, they’re going to succeed much more readily than someone who doesn’t have those skills. Additionally, I think people who are very object-oriented, who understand what the concept is from a technology standpoint, are going to be better-suited.”
– Elizabeth Lisican, firstname.lastname@example.org