On April 19, 2001, the Chicago Software Association (CSA) held its second of an ongoing series of IT Services Roundtables. This session was part of a larger initiative reinstated this year by the CSA to create forums where representatives from member companies can network while discussing issues affecting their workplaces. Earlier in the year the dozen or so participants elected to focus the most recent session on the effects of the year's economic downtown on Chicago's IT consulting industry. The goal of the discussion was to determine how local consulting companies are adjusting their operational and marketing strategies to cope with the current conditions.

Besides the much publicized downsizing undertaken by local consulting companies, the roundtable participants discussed other actions their firms have taken to adapt to current market conditions. Below is a summary of several of the measures discussed that have helped consulting firms weather the current economic storm.

Sell Aspirins, not Vitamins

As companies scale back their IT budgets, they are less likely to invest in promises of lucrative revenue streams created by leveraging the potential of the internet. In response, many IT consulting firms have shifted their sales efforts to target only the areas that can be justified in terms of tangible operational cost reductions for their clients. In today's environment they found that it is more effective to structure enagements to relieve a company's immediate pain than propose solutions to nuture its growth.

Hedge your service offerings

Several companies indicated that they had adjusted the types of consulting services they offer in response to changes in their clients' demand. For instance, Dakota Systems was able to compensate for the slow down in its enterprise system integration business by offering network support and data conversion services. 'The longer companies hold off on IT infrastructure investments, the more pressure will be placed on their existing systems,' comments Dan Rosanova, a technology consultant from Dakota Systems. The consesus of the group was that consulting firms able to offer lower margin services such as network maintenance and help desk support in addition to those that are in demand in times of rapid economic growth won't be hit as hard during times of economic uncertainty.

Focus on short term definable problems

Today's economic environment creates a dilemma for many large companies in the area. Although downgraded revenue projections have halted many new technology projects, these companies have been hesistant to initiate any long-term outsourcing or consulting contracts to reduce costs.As clients take a 'wait-and-see' approach to launching new IT projects, consulting companies are placed in an awkard position. However, participants agreed that the door is not completely shut, though new consulting engagements will have to be shorter and more targeted to win acceptance.

Treat existing clients like prospects

One positive effect of the technology sector turmoil is consultants now realize how valuable their existing clients are. Once the prospect of doubling revenue from new business was removed, consulting firms quickly saw how vital their current customers are to their future success.

The Chicago Software Association

The Chicago Software Association is a regional industry trade association that serves all of Illinois and a 150 mile radius around Chicago (including southern Wisconsin and Northern Indiana). Industry members include software, IT training, IT consulting, and Internet provider companies. The CSA currently has over 550 members.

The CSA offers value to its members through networking and professional development opportunities, offering solutions to work force challenges, creating connections for capital formation for member companies, and providing methods for member companies to enhance their competitive edge.

For more information concerning CSA membership or its roundtable sessions contact Natalie Rucker at nrucker@csa.org.