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Prepare to run a tighter ship

City ITers are battening down the hatches as they wait for the wind to turn, bringing hope of recovery.

IT professionals working in the City are becoming used to an intemperate climate and are hunkering against the chill of an industry in downturn.

So it was a cruel irony when Aurora, the cruise ship upon which last weekend's City IT conference was held, only sailed as far as the Isle of Wight because of the stormy waters ahead.

And while there was plenty on show to invigorate the delegates there was a definite nip in the air. The tangible sense of a sector treading water cast a cloud over what was an unusually low-key event.

But no-one was willing to utter the "R" word. At events such as these thoughts of a recession are glossed over. Of course, it is in everyone's interest to talk up the market so any mention of a downturn at a business gathering is as welcome as a clammy handshake at a wedding.

But in the past year there have been substantial job losses in the City among bankers and IT workers alike. And many industry commentators agree that there are still more redundancies to come before this ill wind lets up.

While no-one can be sure when the true signs of a sustainable recovery will appear, most agree that the downturn is set to continue for longer than was first anticipated. And the longer it persists the more the boom period of the late 1990s looks like a once-in-a-generation time of plenty that has left the industry fat with excess capacity.

City firms are going to have to tighten the rigging a notch or two more yet if they are going to stay afloat in these choppy waters.

IT workers in the City should be preparing for several possible business scenarios.

If the market continues to shrink, the sector will be unable to support so many companies all offering the same types of service. Further consolidation of financial services companies and software suppliers will then be inevitable. IT will have a part to play in integrating the systems and processes of those merged organisations that survive.

It is also likely that banks needing to cut costs will look at outsourcing more of their IT operations - why should they pay their workers City wages when someone can do the same job for a fraction of the cost somewhere else?

This trend could see a migration of IT jobs out of the Square Mile to more affordable areas - perhaps Scotland or eastern Europe.

Of the jobs that do remain - some IT professionals with a more rounded skill-set may be charged with managing relationships with service providers.

One thing is for sure. By the time fairer weather and recovery are visible, City firms will be running a tighter ship.

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