"We've moved from flat files to relational databases, then to client-server, then through Y2K compliance, and now we're at Internet enabling," he says. Through all these shifts, Reingold says, there has always been a need to intimately understand Big Iron systems.

Like Emerald, Keane is also successfully making the switch from Y2K to E-business. Analysts say 10% of Keane's revenue comes from Internet-related projects. Keane became a $1-billion-a-year firm during the Y2K conversion era. "Keane decided to do all the Y2K work they could, and it became a large portion of their revenue," says Lou Marcoccio, Gartner Group's Y2K research director. "But every new person they hired had expertise in other areas, such as implementing SAP and E-commerce. This has allowed them to transition very well."

But to compete in the E-business arena, Keane needed even more know-how. "For Y2K work, we needed great project managers, mainframe and midrange specialists, and an intimacy with our customers' legacy code," says Bob Hagaman, VP of Keane's information services division. "You need all that for E-solutions, but there are other skill sets needed, too." Among the staffers Hagaman says are necessary for E-business are creative and artistic people, such as HTML and graphic designers; business strategists and management consultants to give a holistic view of the business and to help drive profits; and those knowledgeable in Internet engineering and architecture.

To bring these skills into the company, Keane has made a concerted effort to attract employees--from creative directors to business analysts--that before this Internet push wouldn't have set foot in an IT services firm. In the process, the company has found itself facing an array of new competitors, including Web design houses and interactive advertising agencies, jostling for talent and customers.

Buying Frenzy
But even if Keane succeeds in outfoxing its new-found rivals for talent, isolated hires aren't going to be enough to handle the E-business work the firm is seeking to generate. Realizing this, management has been on a shopping spree to buy companies that will be useful for the Internet work ahead. To date, Keane has bought more than 10 companies since January 1998.

Three of these deals closed in the last few months. In June, Keane bought privately held Web design and marketing boutique Jamison/ Gold LLC. Known for its splashy sites for Sony and Nissan, Jamison/Gold was targeted to bolster the creative side of Keane's E-business practice.

In May, Keane purchased Parallax Solutions Ltd., a U.K. software services firm. Parallax's experience in building IBM and Sun Microsystems Web applications for the European retail, finance, automotive, and capital markets gives Keane needed Internet architecture know-how. Organizational-change specialist Amherst Consulting Group Inc. was bought to help Keane's clients cope with the often-tectonic shifts associated with E-business. Keane will merge the firm with its own consulting arm, Bricker & Associates.

Keane isn't the only IT services player active in the acquisitions arena. IMRglobal, which grew from three employees to 3,000 in three years largely on the strength of its fixed-time, fixed-price Y2K remediation work, recently completed its eighth acquisition in the last two years. IMRglobal's latest purchase is Orion Consulting Inc., a strategic and technical consulting firm to the health-care and health-insurance sectors. IMRglobal's acquisitions also include the purchase earlier this year of ECWerks Inc., an E-commerce consulting firm that specializes in supply-chain and business-processes development.

continued...page 3
return to page 1

Photo of Hagaman by Scott Martin