Staffing Challenges Call for New Breed of IT Mgr.

FRAMINGHAM (03/27/2000) - Think you can attract top IT talent by dangling a big salary? Think again. With e-commerce becoming the hottest technology trend since the PC, many candidates are looking for more than just a job - they want a piece of the action. And that means IT managers will need to develop a whole new set of skills for themselves.

With the Internet increasingly dominating our high-tech economy, top IT professionals are being snapped up by dot-com startups that offer not just jobs but also highly attractive stock options. While it's true that such jobs entail risk, today's job market is so out of control that there are always a dozen opportunities waiting in the wings, even if the dot-com flops.

So, traditional IT departments are at a disadvantage when trying to recruit personnel to work on e-commerce applications, because the best candidates are likely to want deals that are sweeter than what corporate guidelines allow. As a result, some companies are taking their cues from the dot-competition and spinning off their e-commerce groups into separate businesses to attract the brightest and the best.

For example, Wal-Mart Stores Inc. - a company with a worldwide reputation for advanced data processing - has decided to spin off The idea, according to James Breyer, managing partner at Accel Partners, the Palo Alto, Calif., venture capital firm that's recruiting's management team, is to "greatly accelerate the Web development effort and attract true world-class management and leadership to the new company."

Even big accounting firms - which never had any trouble attracting top talent to their IT consulting practices - are struggling with this issue. For example, employee demands for liberal compensation drove the Big Five to start compensating employees by awarding them stock in the companies that those accounting firms were trying to help. But the Securities and Exchange Commission didn't like that. The agency felt the pay plan might create a conflict of interest if the accounting firm that was auditing the books had employees who owned significant stock in the client company.

Because of this, three of the Big Five are restructuring their IT consulting practices. KPMG and PricewaterhouseCoopers are spinning their consulting businesses into separate companies, while Ernst & Young is selling its consulting business outright to Cap Gemini. Andersen Consulting was for years separate from its erstwhile parent Arthur Andersen, leaving only Deloitte Touche Tohmatsu still trying to be a one-stop shop. These changes illustrate that top IT professionals simply aren't willing to settle for business as usual, according to Ernst & Young spokesman Larry Parnell. "Employees would rather work directly for the startup [than] hang around for years waiting to become a partner," he says.

The fact that IT employees now want a piece of the action means that IT managers will need to learn a truckload of new skills. Gone are the days when an IT manager could act like a character in "Dilbert." It won't be enough to run a department; the IT manager of the future will also need to know how to build a business. Thriving in this brave new world will mean cutting deals with venture capitalists, building business plans that make sense and creating corporate cultures that can innovate quickly.

In other words, attracting and retaining top IT candidates will mean giving more than lip service to those promises that computers will change the way your company does business. Are you ready?

Geoffrey James is the author of Success Secrets from Silicon Valley (Times Books, 1998). Contact him at

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More about Accel GroupAndersenAndersenAndersen ConsultingArthur AndersenDeloitte Touche TohmatsuDeloitte Touche TohmatsuErnst & YoungErnst & YoungKPMGPricewaterhouseCoopersPricewaterhouseCoopersSecurities and Exchange CommissionWal-Mart

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