With average revenue of $2.4 billion, consulting and business services is among the smallest industries surveyed in the InformationWeek 500. Yet it's relatively technology-intensive, with average IT budgets running 3.7% of revenue, the same rate as biotech and pharmaceuticals and well above the 2.9% average for all InformationWeek 500 industries.
IT spending in 2010 is expected to increase for just over half of the companies surveyed; only 17% foresee a decline in spending. This is a welcome reversal from the downturn of the past two years. "If you go back 12 to 24 months, there was a significant halt to any new capital expenditures," says Steve Martin, a partner at Pace Harmon, an advisory and management consulting firm that specializes in helping companies manage outsourcing relationships. "This year, companies are starting to recognize that they have to catch up and reinvest in infrastructure and applications."
Online job site Monster.com has rebuilt its infrastructure in the last three years, opening two new data centers, says global CIO Darko Dejanovic. Monster also has launched new products recently including 6Sense, a semantic search technology that ranks and scores job candidates. It's technology no one else has, Dejanovic says. "We look for products that set us apart from the competition. I think this clearly does that," he adds.
Telecommunications will be a strategic priority for many companies. This decade will see resurgent spending in IP telephony, Martin says, partially because these companies need to replace legacy telecom equipment. There aren't many old PDXs out there with useful lives past four to five years, he says. Another driver for IP telephony is the need to support employee mobility. There's increased investment in teleworking among consulting and business service providers. "It's not just taking your PC home," Martin says. "It's setting up an environment in your home, or wherever you want to work, that effectively emulates an office environment."
|Industry Snapshot: Consulting and Business Services|