Maybe it's a job for the special branch

About five years ago, I suggested IT companies would need to get big, get specialist or get out.

The basic premise centred on the fact that our market would mature, consolidate and change beyond recognition. Companies had to decide on a path to follow and embark on an aggressive policy of corporate development and evolution.

Skillsgroup - as the parent company of QA, Acuma and until recently P&P - choose to specialise. At first we built our capabilities through organic growth and by acquiring companies with complementary skills. We then organised our capabilities into logical areas by forming distinct businesses which matched similar cultures and capabilities with the needs of customers.

Finally, we created separate marketing brands to represent the different cultures, capabilities and customer needs of our businesses. By the end of 1996, we had established three core businesses - QA, Acuma and P&P - each of which had a clear area of focus, delivery and differentiation.

The importance of different cultures, capabilities and branding of our three businesses cannot be overstated. By getting close to our customers and partners we established that the qualities looked for in a supplier of high-level education services tended to be quite different from those wanted in a supplier of desktop products. We also found that unless a supplier specialises to meet these disparate needs, they will always be a jack of all trades and master of none.

The success of our specialisation is demonstrated by our QA and Acuma businesses which today make up the majority of Skillsgroup and yet accounted for less than 40 per cent of profits as recently as 1994.

In QA, we have a business which is based entirely on the provision of people skills such as IT consultancy, technical training, staff recruitment and contractor services. From a small base, QA has become the largest part of the group in terms of revenue, profit contribution and number of employees.

Acuma has developed rapidly in a relatively short period of time by developing specialised consultancy and software skills, enabling it to become a leading provider of enterprise systems for Unix and Windows NT environments.

Of course, we also specialised in P&P, our core business for over a decade and now part of GE Capital IT Solutions.

Throughout the nineties P&P maintained its position as one of the leading corporate resellers in the UK with an impressive portfolio of blue chip clients. However, with clients increasingly demanding support for their desktop computer environments on an international basis, specialisation alone was not enough. We recognised the need for P&P to partner a company with global resources and capabilities in order to prosper and succeed. GE is clearly such a company and is likely to lead the way as the desktop market continues to evolve and consolidate.

As for the future, the demand for specialist IT skills is set to continue, fuelled by a host of factors which include the year 2000 problem, commerce and the serious shortage of IT skills. As a consequence of this continued growth and the heightened importance of IT within business, scale and specialisation will be the watchwords for success. Market consolidation will also take place in the markets of QA and Acuma.

Skillsgroup has the resources to grow these businesses and you will see them partner each other - along with suppliers such as GE - to deliver client services which deliver the best of all worlds.

David Southworth is group managing director of Skillsgroup.