2. Management mis-objectives: Any firm trying to develop a staffing software project for itself must first fully and clearly define objectives for project. Few do this to extent needed.

Software development and implementation is an incredibly complex process, even for a moderately sized firm. Senior management must be involved from get-go. End-user considerations are paramount if technology is to be fully accepted. Questions regarding business practices, methods, and future business or technology possibilities must be answered.

Critical to success of project is both established accountability and an understanding that software development is inherently risky due to rapidly advancing programming technology. Anybody remember that billions of dollars allocated to correcting Year 2000 computer problems were result of management and programming decisions made, in some cases, in 1960's?

At a time when CEO's often focus on performance of next quarter, trying to plan and manage something that may take years and millions of dollars is difficult at best. Even with long-range planning and management, mis-steps are fairly typical. And it takes unusually strong and pragmatic business leadership to admit that they've taken wrong development road and make any needed course changes.

3. CYA CIO's: The CEO who does not want to get involved in software or IT projects is often tempted to place all of his eggs in basket of a trusted CIO or similar IT manager. Doing so may set firm up for a humpty-dumpty fall.

Years ago, MIS department was often referred to as "glass house", where massive mainframes resided, presided over a technical priesthood whose mystic incantations were interface between "big iron" and information needed to run business. Today, business-savvy CIO's and networked computer systems are rule.

However, firm's CIO and MIS department may still have a vested interest in technology and methodology with which they are already familiar. They may want to protect their turf at all costs. As a result, their tendency is to do things "the way we've always done them", only bigger and more expensively.

At other extreme are sometimes visionary CIO's who see a new IT project as an opportunity to bring in latest and greatest technology, without fully understanding it or its applicability to business.

Either way, firm loses, (although CIO and MIS department staff may gain some new programming skills they can use on their next job).

Can you ensure success of any "Do-It-Yourself" home-grown software project?

With so many variables, it is virtually impossible to predict success of any custom software development project. You can, however, improve your chances somewhat by following a few simple guidelines:

1. Establish goals. The most important thing is to define, exactly, what you want to accomplish. What is your firm's business plan? How does IT relate and contribute to it? What should its objectives be? Be realistic in setting goals, then document them. Get buy-in on these goals from senior management all way to end-user.

2. Establish budget and time specifications. No matter how you cut it, software development is all about time and money. Working from your goals, consider cost to develop software, AND those areas where budget and time requirements can increase exponentially. This includes testing, documentation, implementation, and end user training. And don't forget ongoing support, development, and "bug" fixing.

3. Establish project milestones. Hand-in-hand with establishing your budget and time-frame -- determine what goals you have to achieve in development process to complete project on-time and on-budget. Some of these milestones should be, as NASA says, "GO—NO GO", milestones; that is, if not achieved, project doesn't fly. Remember, 40% of all projects fail outright, so be prepared to cut your losses.

4. Obtain warranties and guarantees. When dealing with outside consulting firms, this is crucial. It is all too easy to point fingers after fact, less so if clear communication between client and consulting firm spells out expected results. And consequences of failure. Have a "Plan B" that you can, if necessary, fall back on.

5. Avoid "mission creep". There is often a temptation to add features and functions beyond scope or goals of project as it progresses. This is especially true as new technology raises "wow" factor of possible. Stick to established goals and avoid quick-sand of "never-ending" software development.

Can you succeed with pragmatic alternative?

If all preceding talk of failure rates of custom software development makes you think it may not be worth gamble, you've one viable option left. Go back and talk to those industry-specific staffing software vendors some more.

Find out exactly what they have to offer, and what they have on boards for future. Can their "90 percent" software be customized for other five percent or ten percent you believe you just HAVE to have? Or, do you really need that five percent more?

Look at your own business with a critical eye to determine if your business practices can or should be adjusted to fit available IT solutions. Remember that with any experienced staffing software vendor you're buying all improvements they've made over years for many, many clients. You may find that, while software solution offered may not be exactly what you want, it will in all likelyhood measurably enhance productivity of your current operations.

Above all, remember that you're in staffing business, not speculative, expensive, and time-consuming software development business. Stick to your own core business competencies, with understanding that software and technology should support and enhance your business operations, efficiencies, services, and profits.

And what about Mike Dunville and Alpha Staffing? Well, he thought it through, had a lot of talks with everyone on staff from top down, rated all of staffing software vendors to find one that met 80 percent of their expected needs and had most experience and best R&D and support capabilities, and bought it.

That was last year. So far this year sales are up 15 percent, billable hours per desk are up 20 percent, and net margin is up 12 percent. They'll add two more offices soon without a hitch, and staff retention is better as well. Mike really enjoyed passing out big bonus checks to everyone. And getting one himself.

END

* Mike Dunville is a fictitious character, as is Alpha Staffing. His story, however, is fairly typical of small-to-mid-size businesses with unique software needs.

The U.S. IT industry matured considerably as it moved through 1990s. More and more workers acquired new skills in computer and communication technologies and heavy investment in IT led to a period of economic growth and acceleration of labor productivity. Labor productivity in manufacturing had highest growth with 4% per year between 1990 and 2003 followed by non-financial corporations with 2.8%. Productivity in business rose by 2.4% each year during same period.

Information Technology Industry Growth Beyond 2000

The second half of 20th century was characterized by dynamic growth of computers. The 21st century will see technologies merge and computing take on a different scenario at all levels and particular also in home. Today, U.S. economy and national security are fully dependent on information technology and at core of information infrastructure is Internet

By end of 20th century there were more than 100 fixed telephone lines per 100 inhabitants in United States. Mobile phone penetration was nearing 60% and Internet penetration 70%. As we moved into 21st century third generation networks brought new applications for mobile phone users and number of mobile phones fostered by increase in sales of smart phones will surpass that of fixed lines phones before long.

Close two-thirds of Nation is now online. Use of broadband is rapidly expanding and according to U.S. Department of Commerce projections business-to-business e-commerce may exceed 500 billion in 2005. In 2003, of high-speed lines offered by providers 64% were from Cable TV operations, 32% from telephone companies, and remaining 4% were from various other providers such as DSL and telephone company high-speed services.

The digital home concept - devices in home sharing digital media across a home network - has been around for some time. Interoperability of devices connected to home network has still to be improved to allow seamless operation and access before application of this concept will take off. Recent projections, however, show home networking growing steadily at an average annual rate of more than 25% between 2005 and 2010 and smart devices and smart networks will connect everything and everyone in near future. The U.S. Information Technology Industry Page 3

Miniaturization and need to increase computing power have been driving IT industry since its infancy, making technology affordable for almost everyone. This drive to innovate is ongoing and will give us a new generations of microprocessors, which are ten-times faster as today's, and memory chips with 40 times storage capacity, grid computing and high productivity computing (network embedded and cognitive computing systems), photonics, nanotechnologies, optoelectronics, and new chip designs and fabrication methods.

Molecular electronics (nanotechnology) is expected to solve some of problems and information overload we are facing today in computing and telecommunications and in fields such as medicine and energy. Application of this technology has recently been seen in flat-panel displays and is projected to be utilized by sensors, optical components, laser, memory and other logic devices in next 5 to 10 years.

Research & development promoting innovation is sponsored by United States Government and IT industry. The networking and information technology research and development budget request for 2005 for all U.S. Government agencies was $2,147 million. Total information technology industry R&D is an estimated $29,100 million.

To order comprehensive U.S. IT Industry Statistics Report: Call 001-202-626-574 or contact amccormick@itic.org. For a detailed report contents description log on to http://www.itic.org/statistics.