Stronger economy pushes up IT day rates

The daily rates charged for IT services are rising, according to a benchmark from consulting firm Pierre Audoin Consultants

The daily rates charged for IT services are rising, according to a new benchmark from consulting firm Pierre Audoin Consultants (PAC).

Based on interviews with 150 users and IT companies on the daily average rates paid, PAC found that rates paid by UK firms are slowly rising overall, as the economy emerges from recession.

The rates cover six dimensions, including applications and infrastructure, platforms (Microsoft, IBM, etc), job profiles (seniority), job function, industry vertical and business solution (human resource, customer relationship management, etc).

PAC looked at growth in rates from 2012 to 2013. It predicted rates will increases in 2014. Financial services showed the strongest growth potential, but the public sector will show a real terms decline over the next 12 months, PAC noted. Within application platforms, rates for Microsoft skills are expected to increase the most, although it added that this will be below expected inflation.

Duncan Brown, director at PAC said cloud was driving the rate increase. “The research showed a slight increase in rates for Microsoft consulting, over IBM, Oracle and SAP. The Azure platform is helping to keep rates up. On the application front, rates for SAP and Oracle has remained pretty flat but Microsoft with Dynamics appears to be catching up,” he said.

The research showed that daily rate for software testers was increasing. “Testing has increased above inflation due to rapid deployment cycles,” Brown added. He said there was also a business imperative to reduce coding errors: “If testing can help you get a product to market much faster, then it adds to the bottom line.”

PAC found a large spread in daily rates for project managers. But at the most senior level, project management had the highest absolute daily rate compared to other skills. “There are relatively few project managers,” Brown added.

“We expect a short-term boost in rates due to the high demand in cloud-related skills,” said Dominic Trott, senior analyst at PAC. “But in the medium term, we’ll see commoditisation of testing and application management roles as these functions migrate to the cloud.”

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