Many IT organisations have slashed staff levels by more than a quarter over the past two years; and 2003 won’t be any “less challenging” than this year, warns ITANZ president Nick Lambert.
Lambert told the recent AGM of the Information Technology Association that while the ICT sector is assumed to be strong and healthy, it is not as robust as believed by the government.
Speaking after the meeting, the IBM New Zealand head said it has been “quite a year” for the industry with Accenture quitting the country, Compaq and HP merging and IBM acquiring PWC Consulting.
While growing IT is “one of the pillars” of government strategy, “a lot of our members are finding it tough”, Lambert says, forcing a few to axe discretionary spending like ITANZ membership.
Lambert says “most” services and technology businesses have staff levels 25% to 30% lower than two years ago. ITANZ members at the Wellington meeting are also concerned with a “northward drift” from the capital and the South Island towards Auckland.
He cites insurance company NRMA, Westpac Bank and Fonterra as either shifting, or looking at shifting, operations.
Lambert also says that the New Zealand IT industry is fragmented with a shrinking top tier. Many small firms do not have the critical mass to compete and small companies face difficulties retaining and attracting talent.
The government ICT Taskforce report was declared a “good document” during discussion at the meeting. But there will be “an issue” of coming up with appropriate polices to achieve its aim of having 100 ICT firms with a turnover of $100 million, and IT representing 10% of the economy, by 2012.
Lambert says the country faces pressure for a “competitive tax environment”, legislation on e-commerce is “vital” and the government must “increase its focus on education” so that skill shortages can be overcome.