In the very last few years in Italy I have seen many system integrators undertaking what I have always seen as a dangerous path: progressively moving toward low-valued body-shopping. Healthy companies, with a good track of high-level consultancy and custom product development, decided it was more lucrative to only hire inexperienced kids just out of Universities and send them to customers. Two years of experience was enough to classify those kids as "senior developers" and make good margins out of them.
The mixture looked good: horde of young people, rich of enthusiasm and open to accept ridiculously low salaries have been sent to final customers, where the only selection criteria has been: very low daily rates, please. Really, most customers do not even look at resumes, they just want to keep a pressure on daily rates. On the other hands, it happens to read ridiculous job posts here in Italy, for example "A junior developer with at least 5 years of Java experience and 3 years of SAP". And the proposed salary, of course, even more ridiculous.
A lot of consulting companies have seen only one direction: grow the number of employees, grow sales figures, making margins by selling a lot of very junior developers for low daily rates. This has been perceived as an easy path for growth, less risky than investing in new technologies and growing an high-level consulting profile. On the other side, customers only devoted on reducing visible costs, without any kind of performance monitoring, created a bid competition on the lowest rates, regardless of effectiveness. Now they get what they deserve.
One bad day, the financial crisis comes.... One bad, black day, that big customer tells you he doesn't need your 50 kids anymore, because there is no more budget for that project. And the day after, another customer tells you that the expected budget for that new project has been cancelled, so you don't know where to collocate those 30 kids you have just hired. The game is over, as you have to pay salaries for people hanging around your offices without anything to do. You have to start firing people and fighting with unions (Italy and usually Europe is not US, you can't just kick people out of their cubicles and make your employees paying the bill for your lack of strategy). You don't really know the people you hired, because you have parked them to a customer for the last few years and forgot about them. Maybe now it could be time to invest into quality, but it is difficult and a bit late: you realized that you best people left the company a while ago, now you are full of developers with bad habits - they growth without guidance, they never took any good training. Suddenly your revenues disappear, your margins are red and your credit is over.
However, I rarely encounter other kinds of companies, those who are less greedy, have planned to grow at a sustainable rate, invested in less but more skilled people, train their junior developers and discuss reasonable rates with their customers. Those who think about IT in terms of solutions (quality) instead of man-days (quantity) and reward their own people with challenging jobs and decent salaries. Very often, this smaller companies are the ones surviving better to crisis, because they are in control of their business.
Usually, in a free market quality of supply is driven by quality of demand, so I guess customers need to change their purchase habits soon if they want to shape the IT market differently. Quality pays for itself, sooner or later.
"My personal feeling is that this is how any further improvement of the world will be done: by individuals making Quality decisions and that's all. God, I don't want to have any more enthusiasm for big programs full of social planning for big masses of people that leave individual Quality out. These can be left alone for a while. There's a place for them but they've got to be built on a foundation of Quality within the individuals involved. We've had that individual Quality in the past, exploited it as a natural resource without knowing it, and now it's just about depleted. Everyone's just about out of gumption. And I think it's about time to return to the rebuilding of this American resource -- individual worth."
Quote from Robert M. Pirsig, Author "Zen and the Art of Motorcycle Maintenance"
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