roundtable


Wilcockson said the IT skills shortage was in project managers, business analysts, technical architects, all the high- end positions. “PC support people are everywhere, it is the next stage up we need,” added Hornsby.


Sharma pointed out that the lack of UK high-end IT specialists was also important for R&D. “The laws of supply and demand mean that UK specialists will begin to command a higher price, and then UK R&D will be less able to compete with cheaper R&D in other countries.”


Can the Government do anything to help said Murray?


Mayes: “It will be interesting to see the impact of higher university fees, but I would expect it to influence what courses students follow from sixth form onwards and to boost demand for courses with strong employment prospects.”


Francis suggested more company sponsorship of IT studies should occur. The Government might also help with something like an education-linked EMI scheme to attract investment into IT education.


Could the IT industry begin to create IT technology schools, suggested Murray. A ‘Universities v. Industry turf-war’ was the Roundtable fear.


Sue Staunton


Clark mentioned that Pitmans corporate had been busier in the past six months. “But, it is still challenging for private companies to fund bank-leveraged transactions and it remains hard to winkle money out of the banking establishment.”


Mayes: “In the businesses that I work with, where you have a turnover of over £30m and good historic cashflows there is real competition for the banking. The key is that banks are looking at cashflow that can be used to service borrowing, whereas funding for a project where a future cashflow hasn’t yet emerged is an equity risk.


“It tends to be easier to fund larger companies as their cashflows are more robust.”


Doesn’t that close the door to bank funding for innovation and start-ups, asked Francis. Did their future rely on personal funding, family and friends, or business ‘angels’?


Tim Clark


Rushin queried if university courses were up to date with the needs of UK businesses. “I think by the time that many IT students have finished their courses, the IT industry has moved on. Certainly when it comes to consultancy and solution architect work with the use of transformation models, the students just don’t have the experience.


“My view is that we probably need to work closer with educational establishments to make sure the students are coming out with the correct skills to help businesses move forward.”


The IT gaming world was a vibrant UK economy and maybe it had skill sets and business practices that could benefit the main IT sector, it was suggested by Wilcockson and Kingsland.


Historic cashflows can unlock the funding door


Finding funding for start-ups and early years companies was very difficult, Staunton confirmed. “Funders are all looking higher up the food chain and VCs have largely lost the word ‘venture’ out of their title. They do have the money but they are sitting on it at the moment.”


THE BUSINESS MAGAZINE – THAMES VALLEY – MAY 2011


Staunton pointed out that delays in obtaining funding would negatively affect both development of new IT innovation and the procurement and installation of IT solutions.


Sharma: “Our bank has been very supportive to facilitate our continued growth. Looking around the supply chain, there has been a lot of discretion and hands-on evaluation and management of finance, which is healthy to see. When the crisis was at its peak two years ago, credit insurers were making very black and white decisions on financing and often walking away from creditworthy businesses. The maturity of the IT industry has definitely sustained it.”


Tim Mayes


“But, private companies are good at changing their ways quickly, looking at things differently. That’s what we are good at – British invention. That’s our challenge. We have to keep finding angles and better ways of doing our business.”


Francis thought new consumer trends needed to be considered carefully. Consumer Internet access with its rising demand for online self-service had already brought a big impact. For example, most consumers used to buy their car insurance through a broker, nowadays they buy directly online. “How much of that trend will flow through the rest of the financial services sector, we will have to wait and see, but the FSA plainly needs to regulate that quite carefully.”


Regulatory change will be a driver in certain sectors. For example, the traditional commission-based earnings model of IFAs – from selling products to remuneration for advice – is a big change coming to financial services.


Hornsby: “It would help if the Government could reverse the health and safety culture of the last government. It has just eked out everywhere.” Excessive red tape and regulation was another legacy to be overcome, suggested Murray.


Peter Francis


Newberry: “We are all constrained by a number of issues. You just have to find a way around them. Look for innovative ways of doing things.”


www.businessmag.co.uk . . . and M&A activity?


‘Picking up, but not desperately busy,’ was the Roundtable reply.


Clark: “It’s been better since October, and we may see a blip because of the change in CGT. A lot of owner-managers may think it’s not worth waiting for a few more years because nothing is going to change now, so I may as well sell, pay less tax and move on.”


What other challenges will impact sector growth?


Newberry suggested: “The falling pricing of our goods and the increased price of everything we have to pay for to distribute them. Five years ago a laptop cost £1,000. This year it will be £200 and it will cost a little more to deliver it. There is little or no margin in our business nowadays.”


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