NETWORK : Information technology's hired guns

Cooper James sees a bright future for the freelance programmer as more and more companies choose to contract out to meet their IT needs

In a world marked by unpredictability, it often makes little sense to keep a full-time staff to design, update and co-ordinate software and hardware.

That is why there is now a small army of freelance programmers who can be brought in at short notice to deal with particular tasks or problems. Most are hired through agencies. While you can expect to pay a contractor more than twice the salary of a permanent employee (£800 to £1,200 per week is typical, plus a 25 per cent agency fee), you will be paying her or him for an average of only three months.

For the programmer, contractual work is attractive for the same reasons as other temping-style jobs. There is variety of work and workplace, distance from office politics and a very healthy income when you are in work. Those who do not at least start out by working through an agency are in a tiny minority, and the agencies have the advantages of ensuring a steady cash flow, providing a buffer against being sued personally for negligence or malpractice, and - for the client - of being able to match skills to jobs.

However, the contracting industry has developed a fair few bugbears that complicate the picture. First, the size of the agency margin is often resented, as are their strict job delineation demands: it is currently standard procedure for agencies to insert a clause into all contracts forbidding the contractor from working for the client in any capacity for up to a year after the contract is completed. While thought to be legally unenforceable, and possibly a restrictive practice, this has never been contested in court, presumably because of fears of blacklisting and of the expensive lawyers agencies can afford to hire.

Second, as contractors are paid hourly rates, it is difficult for a project manager to estimate and to control the cost of a prospective IT project, especially as it is not in the contractor's interest to be efficient. Similarly, because contractors work on short-term contracts, there may be problems after they have left that cannot be solved by other people.

One way of trying to avoid these problems is to employ contractors from a contracting company rather than an agency. Price Waterhouse and EDS (Electronic Data Services), Ross Perot's outfit, are just such companies. The latter has recently landed a £1bn contract to take on the control and management of all the Inland Revenue's IT requirements. This is a practice known as "outsourcing", or facilities management (FM). For a large client, the advantages of an umbrella company that employs a team of people over piecemeal contracting are obvious: you can sign a fixed- price contract, and will also be assured of proper post-development support.

Though the likes of EDS work mainly for giants, FM is now available for smaller companies. Ben Rapp is managing director of Emerthames, a successful young firm that is out to give the same kind of options for the smaller company or project that EDS provides for the multinationals. In six years, Emerthames has grown from a simple vehicle for Mr Rapp himself, then a freelance agency programmer, to a company employing three full-time programmers, an accountant and an administrator, with a turnover last year of £200,000.

"Emerthames is a completely new departure for the IT contracting industry," Mr Rapp says. "We go in and run the whole project from start to finish, replacing the need for even a permanent project manager."

Emerthames's aim is to take on to its own shoulders the responsibility for efficient resource management that traditionally resides with the client, in a way that Mr Rapp feels is likely to become the standard for the industry. "It is good for the programmers, too, who get all the variety of contractual work along with the advantages of a permanent job such as holidays, sick pay and job security. And because we are together on different projects over long periods, we have created a strong team; because we're used to working together, we create consistent code to standards honed by experience."

Emerthames has done network support for Kiss-FM, the London radio station, since 1990. It installed all hardware and software, trained the staff and continues to manage the site today. When Emerthames came to Kiss, the IT department, like that of many small companies, was being run in the financial director's spare time.