Too fast for our own good

Margaret Manning, commercial director of the web consultancy Reading Room, fears that rapid growth and a lack of skilled staff threaten the future of the New Economy.

The accepted wisdom was that this was going to be the year of e-business in the UK, with internet companies scrambling to cash in on the e-pound. The sound of lastminute.com's share price crashing to the ground brought at least a temporary end to that kind of feverish hand-rubbing by investors and a rethink by several big players within the industry.

One of the first to speak out against the rose-tinted view of unbridled profits and never-ending economic well-being has been Margaret Manning, commercial director of the web consultancy Reading Room. She highlights some severe structural problems that do not bode well for the future of the e-economy.

And her comments carry weight. Reading Room has been at the forefront of developing net business packages for multinationals and household names including Glaxo Wellcome, as well as carrying out work for HM Treasury. She's one of the few people in the industry with a firm background in the more traditional business environment, having worked at Price WaterhouseCoopers, KPMG and 3i.

The problem, as Manning sees it, lies with those developing e-business strategies for corporate clients who may have no understanding of the technology or what can be achieved with it.

"The whole thing is in danger of going belly-up for a variety of reasons," she explains. "There's a massive demand in the industry, certainly, but because it's so new, the management structures are underdeveloped. What we have are very young companies growing far too quickly without experienced managers.

"That has led to some very significant problems. The massive demand means consultancies are coming under tremendous pressure to build websites. They're not about to turn the work down so they desperately try to get the job done on thin resources. They end up being forced to recruit inexperienced people at vastly inflated wages.

"They don't have the project managers to manage the new team so they fail to meet the clients' deadlines. The inevitable consequence is angry, frustrated clients who find telephone calls unanswered or staff unresponsive because they're dealing with excessive workloads."

While this obviously breeds a lot of mistrust and bitterness, Manning is concerned about the wider implications. "Venture capital is currently available for dot.com businesses, which is important for the whole industry," she says. "Say a venture capital business gives £1m to build a website, but the site doesn't get built to the deadline or the expected standard. The venture capital company naturally gets upset and will take their money elsewhere. That is actually the experience of a dot.com business which has come to us after their last developers let them down.

"If a website doesn't go live to deadline, money is lost. And if the venture capital people get fed up, the whole e-business industry is going to suffer."

Manning's stance comes after producing an in-house report which she freely admits shocked her. Interviews with current and prospective Reading Room clients showed 70 per cent were dissatisfied with their previous web design company. Of these, 63 per cent felt their experience of previous web development had been soured by inadequate project management, with a further 26 per cent suffering from inadequate technology and 11 per cent from inadequate design. Many of the clients brought with them a widespread disillusion with the future of e-business, inversely proportionate to the wild promises made for what it could offer.

"The problem is, because it's a young industry, it's very difficult to recruit people with both the technical and business skills required to lead large projects," Manning explains. "And it's a problem which can't be solved quickly. There aren't enough experienced people at the higher levels.

"The understanding of the internet, what it does and what it can create, should trickle down from the top - from the highest levels of government and the corporate world. Unfortunately, a lot of decision makers are washing their hands of this responsibility because it's too complicated," she says. "All too often there's a knee-jerk reaction to creating an online presence. Responsibility is given to anyone who expresses an interest. A website is now a core business activity and this should be reflected in the level of commitment senior management give to it."

Alongside the lack of good management runs another, just as important, problem - a shortage of quality technical people. While virtually every IT course in the country is oversubscribed and a career in the new media seems the dream job of every teenager, most web consultancies are having trouble recruiting staff up to the rigours of the work.

"This is leading to a wage spiral that will cause major upheavals in dot.com businesses this year," Manning predicts. "We have taken a decision to grow slowly, and we now close our order books when we have reached the optimum level of work, but, really, this is a problem that affects the whole industry and there are no easy answers."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksNow available in paperback
Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum