Subject:	Re: Frank Ney makes Time Magazine?
Date:	1999/07/07
Author:	cory hamasaki <kiyoinc@ibm.XOUT.net>
	Posting History

Surprise, this isn't a dup of the previous article.   I was thinking about Frank, Declan's article, and the 'slight' cost overrun of a b-b-b-billion dollars.   If they had listened to Frank in 1993, was it?  Made the decision to fix the systems then.  There might not have been the b-b-b-billion dollar cost overrun.   Pollies, please mull this over, Frank was running his yap about Y2K 6 years ago, the big contract was awarded last year.  There's a huge cost overrun.  They could have saved a fortune by listening to Frank.   It's pretty good times for programmer consultants around DeeCee but in 1993, 4, 5, 6, 7 even, I knew experienced programmers who were under employed or unemployed.  In 1993 there were lots of people who would jump at the chance at a contract job paying $50K/year plus light benefits. (That's a billing rate of about $40/hour.)   I know how the staffing game works around here.  The contractor crams the contract with their cronies, girlfriends, boyfriends, unemployable brother-in-law, assigns them slots at the high end of the scale.    Experience shoveling manure at a horse farm becomes 3-5 years of business management.  If they showed the peeceeweenee's where to put the computer, it's participated in the computerization and business process re-engineering using advanced spreadbase, Excel, Microsoft Word 7.0.   That gets them the $85K-$100K jobs.  Contracts are "packed" with fluff like this.  This sets the "burn rate" of the contract.   Separate from this, some work has to be done.  This is handled by us hands-on, dirt under the fingernails, code-heads.  They resent paying us a fraction of their rate.  That's why it's so hard to get a contract with a decent rate.    Decent in the DeeCee area, given the high cost of living and social problems, is somewhere around $100/hour depending upon specialty, REQs, urgency, etc.   More typical, the contract houses will quote about $50-60/hour.  That's what they'll pay the code-head, 1099.  If you bill 2,000 hours in a year, that's $100K and the equiv of a W-2 Salary of $70K after you adjust for benefits.   If you can go direct, that is, contract with the end-client and capture the profit and overhead from the contract-house, you'll do a little better.  It usually takes having a pal or inside-man at the client firm.   I expect that there will be an uh-oh effect in the MIS departments as the last few months count down.  The work hasn't been done, they know it, I know it, and the systems will break.   For consultants, don't ink any unlimited access contracts. They might want your time but cap the hours at some amount.   Have 1/2 your time or enough dollars to cover expenses booked for the next year.  You're going huntin' for big game.   New contracts pay *full* freight. For current clients, say that the 60 or 80 hours/month are all you have available and drop the discussion, don't explain why you can't give them more time or take on additional tasks from them.  Just say, other commitments.   The reason is, you don't want them to think you're an opportunist.   For new clients, be straight with them, you do Y2K crisis recovery work at (whatever) 2X your normal rate,  3X, 4X, whatever you think is right.   The suit consulting firms will cram projects with clueless weenees and bill the client $200-300/hour and no one complains.   No reason why you shouldn't get that money.   CNBC reported that due to the heat wave, power that normally sells for $20 wholesale is going for $920 on the spot market. I think the unit is like a mega-watt-hour or something like that.   If the HVAC man wants $150/hour and your baby and wife are screaming because of the heat, your question is, "Do you take Mastercard?"  and when your system is flowing cool air, you say, "Thank you for coming out today."   There's a billion extra dollars for IT consultants. This is "Great News."   cory hamasaki  http://www.kiyoinc.com/current.html 

-- a (a@a.a), July 07, 1999

Answers

Well, this is the first time I've thought of Cory as an optimist. If we have an economy that can pay codeheads that kind of money, then Y2K had no financial effect.

Wow, I'm way more doomer than Cory. I'm not sure what to think of that....

-- Dog Gone (layinglow@rollover.now), July 07, 1999.

screw em'!

They should've listened, no use crying now.

Now if only the farmers had their day. THAT will hurt. Beans at $10/pound, and you'll only be making $15 a week.

Boys this is what happens when a commodity becomes really scarce (not just scarce but REALLY scarce....) It may look obscene but it really isn't.

What's more disgusting? That a very few discerning gear-heads cherry can now pick contracts at $500/hr plus $250/hr under the table or that some schmuck clueless morons are screwing their clients with lousy-have-no-talent newbies and billing $400/hr?

How much would you pay your surgeon? Do you really want K-mart blue light special surgeon when it's you under the knife?

Engineering like farming is underappreciated, (but food is more important)

-- hunchback (quasimodo@belltwor.com), July 08, 1999.

Cory,

You forgot one thing that we, as consultants, need to have as part of our contracts:

Waiver of Liability. In other words - the Contractor shall *NOT* be held responsible for failures of the system in whole or in part regardless of the nature of the failure.

I have been doing this work for many years now and I will have no part of a contract that does not have some liability exclusion buried within. And guess what, my longest period of bench time has been 4 hours while we deliberated over which of the 6 offers we were going to accept!

Yours in COBOL... Dino!

-- (COBOL_Dinosaur@yahoo.com), July 08, 1999.

There are certainly a lot of jobs out there for techs right now. I got an email yesterday asking if I would move to Dallas on a 6 month contract to convert old DOS Foxpro apps to Access 8.0 and upgrade them to Y2K compliance. If I was single, I might do it.

I don't know about Cory or Dino, but people were talking to me about Y2K compliance as far back as 1986. Some worried about it, some didn't. A fair number of Data Processing Centers set pretty early dates for starting non-acceptance of programs with short date fields. I know of some that started in 1986, as a matter of fact. That accounts for a lot of the discrepancy of expenditures between one place and another. Some corrected things as a part of normal maintainence as time went by.

-- Paul Davis (davisp1953@yahoo.com), July 08, 1999.

Yippeee!

Yep, it will about time. Farmers & codeheads .... It can't get much worse for farmers. I've thought of every thing that we could support our ranch on and hay seems to be the best but it's hot, nasty, and the equipment is always breaking down and if you don't have a drought or it rains at the wrong time you might make about $10-15 avg. hr. Maybe less considering tractor breakdowns. If you buy new equipment, ROI is probably 50 yrs.

Concerning contractors, rates have just stalled out the last few years, but I agree with Cory's assessment. Things will have to be fixed and it could be a turnaround for codeheads. At least, companies will not be able to import, or at least not as easily, foreign codeheads afterwards. It appears we are just another commodity.

-- texan (cchenoa@hotmail.com), July 08, 1999.